Home Archived Articles Rosecroft Aquired By Stronach Group, Eyes Preakness Stadium

Rosecroft Aquired By Stronach Group, Eyes Preakness Stadium

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The Canadian-based Stronach group, owner of the Pimlico Race Course and Laurel Park horse racing tracks, is stepping up efforts to improve the experience and its overall commitment to Maryland’s industry.

Recent investments include the completion of two major projects at Pimlico and Laurel Park, the official revival of the prestigious D.C. International race, the opening of a fourth off-track betting (OTB) facility in Boonsboro, an independent study aimed at creating a modern Preakness stadium and the acquisition of Rosecroft Raceway, in Fort Washington.

“We continue to try and enhance the live experience at our facilities and also make it easier for fans to watch our races through our off-track betting sites,” said Sal Sinatra, president and general manager of the Maryland Jockey Club (MJC).

A $20 million renovation and improvement program has resulted in the completion of two new, 142-stall barns at Laurel and a spacious wash facility with locker rooms and laundry amenities for jockeys, with two additional barns to be constructed.

Additional improvements at Pimlico, meanwhile, have included a 450-seat expansion of the Turfside Terrace, improvements to the Grandstand Upper Box, new concessions and bars, a booster pump to maintain water pressure and a new LED, high-definition board in the infield.

Future plans will focus on adequate housing and dorms for grooms who live at Laurel Park.

Preakness Stadium?

Constructed in 1870, Pimlico is the second-oldest racetrack in the nation. One of the biggest challenges facing Preakness organizers is meeting the infrastructure demands of a rapidly growing world-class event using aging facilities that continually constitute the weakest link in the event’s success.

“The state of the facility is what hamstrings it,” said Maryland Racing Commission (MRC) member Bruce Quade, speaking at the MRC’s monthly meeting in May. “The track is in woeful disrepair.”

Targeting that problem, the MRC is overseeing a yearlong study spearheaded by the MJC together with the Baltimore Development Corp. and the Maryland Stadium Authority (MSA). With the first phase complete, the second phase will now continue under the auspices of the MSA through its consulting partner, Crossroad Consulting Services, with completion expected no later than March 2017.

According to MJC COO Tim Ritvo, the study will consider the pros and cons of a new facility, the best location for that facility, economic impacts and whether the current grandstand building is capable of lasting another 20 years.

“We have all decided … to stop kicking the can down the road and look at long-term prospects of what a special event like this could be in a new stadium or any other avenues that this stadium authority comes up with,” he said.

A rebuild, Sinatra said, would require moving the Preakness to Laurel for one or possibly two years.

Market Expansion

A new stadium would necessitate a huge expense, Ritvo said, and the Preakness event only lasts two days, but it carries racing for the entire season while supporting both a breeding program and full-time jobs.

“From the Stronach Group’s perspective, it’s a serious initiative for long-term viability in the state of Maryland,” he said. “The Preakness is here to stay, and we want what’s best; we just feel we’re handcuffed to give the customer experience we want to give in a facility like this.”

Ritvo stressed that the Stronach group is interested in conducting a fair and independent study.

“[I]t’s probably easier to operate one facility,” he said. “But if I had two and one was spectacular and one was for everyday racing, I could figure it out. The thing we have to make sure of is that the Preakness, as valuable as it is, has to be done at a better level than we can offer right now.”

One important feature missing at Pimlico is the availability of corporate suites.

“Churchill Downs runs [a similar] event, and they make an EBITDA of $55 to $75 million,” Ritvo said. “We’re nowhere near that, and it’s because of ticket prices and ticket sales. We don’t want to gouge people, but we would like to have that offer of corporate suites [to] draw the Washington, D.C., market into this, where lobbyists can spend a lot of money coming to the event.”

Rosecroft ‘Upbeat’

Proximity to the Washington, D.C., market was a weighty factor in the Stronach Group’s decision to purchase Rosecroft Raceway, a standardbred harness track, in May from competitor Penn National Gaming. The sale price has not been disclosed.

“The Washington, D.C., market has been one we believe has been untapped for a long period of time,” Ritvo said. “We hope the Stronach Group emblem will help Rosecroft and help the thoroughbred and harness industries work as one.”

MJC officials expect to institute a few new policies to help grow the harness business and make Rosecroft more successful, and also view it as another potential OTB site.

Ritvo affirmed that the Stronach Group intends to continue harness racing at Rosecroft, “but everything has to make sense, and it has to be financially viable, so we’re going to meet with the harness horsemen and see what we can do better.”

Tom Cooke, president of the Cloverleaf Standardbred Owners’ Association (CSOA, which operates Rosecroft), said his organization supports the sale.

“We’re very upbeat about it,” Cooke said. “We’ve been through this before when the track was shut down and left in limbo. We’re being purchased by a solid player; this is not somebody new to the industry.”

CSOA Executive Vice President Sharon Roberts said she looks forward to partnering with the Stronach Group.

“The facility needs a lot of work and a lot of physical redevelopment,” she said. “Penn National did what they could, but I think Stronach has deeper pockets. If they could flow what they’ve done with the betting line and marketing over to Rosecroft, that would be so beneficial and might make Maryland one of the bright stars on the East Coast and bring it back up to the level where it was years ago.”

Reassuring Signals

Following this year’s 141st running of the Preakness Stakes, the MJC announced all-time records for total handle and attendance.

A crowd of 135,256 — up 2.5% from last year — watched Kentucky Derby runner-up Exaggerator defeat Derby winner Nyquist.

Total handle on Pimlico’s 14-race program, which featured seven other stakes, was a record $94.1 million, eclipsing the previous mark of $91 million set in 2005. Total handle was up 10.8% over 2015.

Sinatra characterized the numbers as further indication of Maryland racing’s revitalization, while Ritvo credited the state’s video lottery terminal (VLT) program as instrumental in making it possible for the Stronach Group to enhance its commitment to customers and horsemen.

“We’re trying to improve and return an investment to the state by hiring more people, payroll taxes … and all the things that come with the subsidy,” he said. “Pretty soon, we’ll be able to make a case to show that not only what the state gave us was good for an industry that was struggling, but it’s actually got a growth pattern to it … and will help the economy.”

“For all of us, I think the big takeaway is the commitment of the Stronach Group and the Maryland Jockey Club to keep the Preakness here in Maryland,” said Maryland Racing Commission Chair John McDaniel. “A few short years ago, there was serious doubt about that.”