- The Washington Times - Wednesday, May 4, 2005

BALTIMORE (AP) — The Canadian-based owners of Pimlico Race Course and Laurel Park have indicated they won’t be making major upgrades to those facilities without additional alternative revenue — an apparent reference to slots.

The announcement from Magna Entertainment Corp. executives Tuesday comes just weeks after the state legislature failed for the third straight year to legalize slot-machine gambling in Maryland.

“We’re weighing very carefully what’s happened in Maryland, and we could, frankly, stop investing any significant sums at this stage because we’ve done the most important piece, which was to get the racing assets of Laurel fixed up,” Jim McAlpine, vice chairman for corporate development, said during a conference call to discuss the company’s first quarter.

The company reported a $4.1 million loss.

“Obviously, if we have other sources of revenue there, we can get more aggressive in terms of improving the back side of Laurel and also in terms of moving forward with some upgrades to Pimlico,” Mr. McAlpine said, “But we aren’t going to do a great deal of that in the absence of alternative revenue.”

Magna owns tracks in the United States, Canada and Europe. When the company bought the two Maryland tracks in 2002, Magna Chairman Frank Stronach pledged to begin rebuilding Pimlico immediately after the 2003 Preakness — with or without slots. The auto-parts tycoon later said Magna would also rebuild Laurel Park, regardless of slots.

Magna has spent about $38 million on the two tracks since then, according to company officials. About $20 million of that was spent redoing the dirt and turf racing surfaces at Laurel, said Jim Gagliano, a Magna Entertainment executive in Maryland.

At Pimlico, there have been dining-room upgrades, landscaping and a brick-column perimeter fence.

The company’s apparent change of heart about investing more on the facilities was poorly received in Maryland.

“Nobody knows what their plans are for Maryland. They need to start talking straight to everyone,” said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen’s Association.

“Frank Stronach said he didn’t need slots to do the kind of improvements that need to be done here,” Mr. Foreman added. “Now they’re saying, ‘We can’t make improvements without slots.’ There’s a disconnect there.”

A spokeswoman for Gov. Robert L. Ehrlich Jr. told the Baltimore Sun that Magna’s decision was not surprising.

“The governor has for years warned of dire consequences and ramifications of not passing a slots bill, and today those warnings came to fruition,” spokeswoman Shareese DeLeaver said.

Delegate Peter Franchot, Montgomery County Democrat and slots opponent, said Magna Entertainment’s latest announcement unmasked what he characterized as the real reason for pushing slots — to benefit a national gaming company.

“Originally, it was slots for tots, meaning education,” Mr. Franchot said. “Then it was slots for docs, to pay for medical malpractice insurance.” Other advertised purposes were the environment, property tax relief and higher education, he said.

“Now we’ve bottomed out in this painful exercise, which is to help the gambling industry by Governor Ehrlich,” Mr. Franchot said.

Delegate Curt Anderson, Baltimore Democrat and slots opponent, called the Magna announcement an “empty” threat.

“That seems to be a ridiculous statement for a corporation that wants to make money. Apparently, they want to make money off the backs of Maryland citizens as opposed to improving their product like most businesses do,” Mr. Anderson said. “They’ve got a valuable product there. All they have to do is build it up.”

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