Jeff Barker and Pamela Wood of the Baltimore Sun are reporting today that the city of Baltimore and the Stronach Group have reached a deal to keep the Preakness in Baltimore beyond 2020.
As a gambler and occasional racing fan who loves going to Black Eyed Susan Day at Pimlico, and likes to make it to Old Hilltop at least one other time during the Spring meet that surrounds the Preakness, this is wonderful news.
As a general opponent of using public funds to subsidize professional sports teams and their facilities, I have some concerns.
Overall, though, this seems a good deal that benefits the city and helps Maryland horse racing. I applaud the politicians and business leaders who pressed for this and delivered something reasonable.
What is in the Deal
As described by the Sun, the Stronach group will donate the Pimlico land to the city. Down goes the old clubhouse and grandstand and a new clubkhouse will be built. The track will be rotated to allow for possible sale of parcels of land suitable for development.
The city then leases this new Pimlico back to Stronach and the Maryland Jockey Club to run the Preakness.
Plans for the new venue show an infield marked out for multiple soccer fields, and therefore capable of hosting sporting events.
Presumably events like Moonrise would also continue to happen at the facility.
The new facilities are expected to run around $200M, and in addition Laurel Park would also get $174M in improvements.
You will recall part of the leverage that the city has here is that the Stronach Group was using the vast majority of race improvement funds provided by legalized gambling at Laurel Park rather than at Pimlico. They still want to improve Laurel Park as the center of Maryland horse racing for the majority of the year, but the split is much different here.
The rub is that the plan calls for the money for these improvements to come from that same source, the Racetracks Facility Renewal Fund provided by the Maryland Gaming Commission. In fiscal year 2018, that fund provided over $10M for improvements (see page 62 of the Maryland Gaming Commission 2018 annual report). The problem is that by current law, that money tapers off starting in 2026, and drops to zero in 2032.
What is Good About the Deal
Here is what I like about the deal:
- The City of Baltimore gets a much needed win in terms of public image.
- The neighborhood gets some real improvement n terms of substantial visible investment.
- Good forethought in terms of a multi-use facility can provide an attractive venue for youth sports, concerts, and other activities, breathing further life into the area.
- Horse racing gets money and attention. I hope people see this and decide to come out to the track, before and after the changes.
What Not to Like and What is Missing
Again, I do not like subsidies to professional sports. In this case, though, the first traunch of funds is going to be spent by law on the tracks anyway. It is going to take some more bargaining to get the rest of that money, though, and it invariably comes out of the public purse.
Yes, we may convince the casino industry to sign up to divert some money to this. But if we do that as people, we could do other things with that money.
I suspect that there may be some trading with that industry around further expansion of gaming, including mobile platforms, sports wagering or both.
What I would hate to see is for Pimlico to miss out on that action.
A natural way to keep Pimlico a year round attraction would be to allow sports wagering there, in a newly built and attractive clubhouse that includes a race and sports book.
I think the legislators should anticipate that, and be sure to make that part of any deal they make with MGM, Caesars, and Live!
Pimlico needs to be part of the action in sports wagering, and the gambling public deserves a competitive marketplace for their betting dollars.
All that said, this looks like a solid deal, and I hope the legislature acts quickly to take advantage of the good will and outcome from these negotiations.
