Hearings on MD racing legislation show strong support

The initial Maryland General Assembly committee hearings on legislation that would rebuild Pimlico Race Course and Laurel Park and strengthen the foundation for horse racing over the next 30 years reflected strong support from state, county and city government officials as well as business leaders.

Two bills—they are almost identical—were heard Feb. 25 in the House Ways and Means Committee and Senate Budget and Taxation Committee. The legislation creates a funding structure for about $375 million in bonds for the two projects, puts the property on which the two tracks sit under city or county control, and has provisions for equine health and safety initiatives.

The House bill was introduced by Speaker Adrienne Jones, who said the plan "preserves the history of the Preakness Stakes and Pimlico and enhances year-round sustainable racing at Laurel Park." She put it in the context of how the racing and breeding industry more than 10 years ago was in decline in Maryland, and how a share of casino video lottery terminal revenue helped it begin a rebuilding process.

"Maryland Thoroughbred racing has drastically recovered and returned to being a competitive location, but infrastructure challenges remain," Jones said. "This bill is about regional cooperation, civic pride in economic redevelopment and showing Maryland racing to the entire world."

Sen. Guy Guzzone, who chairs the Senate Budget and Taxation Committee, introduced the bill in his chamber. He said the legislation is about history, tradition and preservation but also offers a path forward for the racing industry and economic development.

"The long history of racing in the state has given us many benefits over the years," Guzzone said. "I'm very pleased to come forward with this legislation. It is very important to preserve the Preakness in its rightful place in Baltimore and preserve the horseracing industry in the state. I do think it paves a way for the future in a way that can help some communities. All around, I think it's a great package."

The legislation would create the Racing and Community Development Fund, which would fall under the Maryland Stadium Authority. The financing plan calls for at least $180 million for the Pimlico project and $155 million for the Laurel project. The MSA would need approval from the state Board of Public Works for the bond issue and financing proposal.

Pimlico would have only a small barn area to accommodate ship-ins on race days during a short meet or meets. Laurel, which would be the primary racing facility, would get an entirely new stable area and modernized housing for backstretch workers.

The fund would get about $17 million a year from the State Lottery Fund. The figure includes $5 million a year from the Purse Dedication Account beginning in fiscal 2021. (The PDA share would come from the 6% of casino video lottery terminal revenue that supports the Maryland racing industry.) In addition, an unencumbered $24 million balance in the Racetrack Facility Renewal Account—also funded by a share of VLT revenue but set to expire in several years—as of June 1, 2020, would be placed in the Racing and Community Development Fund.

Joe Bryce, a government relations specialist who sits on the MSA Board of Directors, noted that much of the funding for the plan comes from existing sources and said the bonds would be handled by the Maryland Lottery "because of its stable, proven marketability to investors." The lottery offers an animated racing game called Racetrax that last year generated about $200 million in sales and $45 million in revenue, he said.

Bryce said there will be a rolling balance of $17 million through 2030. After that, the Maryland Lottery would continue to fund the bond measure or the General Assembly would take other action to make payments.

Multiple county executives heralded their support for the legislation during the two Feb. 25 hearings including Steuart Pittman of Anne Arundel County, where Laurel is located. He said the Laurel project can help redevelopment along the Route 198 corridor and that "the rebirth of Pimlico will be a remake of Park Heights."

"This is a monumental day for racing not only in Maryland but around the country," said Craig Fravel, Chief Executive Officer of Racing Operations for The Stronach Group, which owns the Maryland Jockey Club. "The Stronach Group is a big believer in live racing and wants to provide the safest horse-friendly environment and modern facilities that meet the expectations of new and current fans."

Both bills reflect the heightened focus on equine health and safety, and that goes beyond installation of a synthetic Tapeta surface at Laurel. The Maryland Racing Commission will be charged with establishing an Equine Health, Safety and Welfare Advisory Committee that must provide regular reports and a year-end summary of its activities.

The committee would consist of three members of the MRC appointed by the Executive Director; one representative of the racing licensees in the state; a horsemen's representative appointed by the Maryland Thoroughbred Horsemen's Association; a representative of the breeding community appointed by the Maryland Horse Breeders Association; the MRC Equine Medical Director; a veterinarian licensed in the state; and "any other individual with expertise in the equine or racing industries" as appointed by the Executive Director.

Both bills also state that on or before Feb. 15, 2021, the MSA after consultation with the racing industry must report on the feasibility of creating an equine health, safety and research center at Laurel.

"The Maryland Racing Commission and industry stakeholders have been laser-focused on the health and safety of our horses," said Alan Foreman, general counsel for the Maryland THA and CEO of the national THA. "There is an aggressive consortium (of Mid-Atlantic stakeholders) implementing safety and welfare reforms to identify horses at risk and to minimize equine fatalities. The racing commission already established a safety committee, and that is codified in this legislation."

"Our organization fully supports approval (of this legislation)," Maryland THA President Tim Keefe said. "It will bring back to Maryland the status of one of the premier racing and breeding venues in America."

Under the plan, the Laurel project would go first, which means live racing would move to Pimlico for an extended period of time, perhaps two years. Mike Johansen, an attorney who represents the MJC, said the entire project--both racetracks--should be completed by 2025. It was noted at the hearings that during that time, the Preakness will continue to be run at Pimlico using temporary facilities once the clubhouse/grandstand is leveled.

"We didn't want to create expectations we can't meet," Johansen said of the extension of the project to 2025 from 2024. "The Maryland Stadium Authority must validate the entire (construction) timeline."

Many aspects of the transition process during construction will be addressed in the near future. Temporary housing for backstretch workers at Pimlico during the Laurel project will be code-compliant and modern, officials said.

The transition includes a discussion about the Bowie Training Center, which in the Senate bill would be given to the city of Bowie and in the House bill would be the subject of a task force that would study its future uses and make recommendations.

Officials at the House hearing indicated the Bowie facility could be used again during the transition period, which would cost $10 million to $13 million in total. Johansen indicated the MJC prefers the language in the House bill and wants to work with all parties to facilitate a resolution.

TSG owns two parcels in Bowie on either side of Race Track Road: the parcel on which most of the barns are located is 30 acres, and the parcel with the racing surface and a few brick barns is 130 acres.

"We certainly support that conversation and engagement," Johansen said. "We've mentioned the idea of dedicating some pieces of the property for public use but we oppose the Senate language that would be mandatory conveyance of the entire property without an agreement from (the MJC)."

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