- The Washington Times - Thursday, April 9, 2009

ANNAPOLIS | The Maryland General Assembly is expected to pass easily a bill that would allow Gov. Martin O'Malley to seize the rights to horse racing's Preakness Stakes and the racetrack on which it is run by using eminent domain.

Mr. O'Malley introduced the emergency legislation Wednesday in response to rumors that the race, the second leg of the fabled Triple Crown, may be moved to another state by its owner, Toronto-based Magna Entertainment Corp., which filed for bankruptcy last month.

“This is a very bold step,” said state Senate President Thomas V. Mike Miller Jr., Prince George's Democrat, who said there was widespread support for the action in the Senate. “It's a move that the state needs to make to make sure the Preakness stays in Maryland.”

The bill, which will be debated in the General Assembly on Thursday, would subject all rights and racing events that are associated with the Preakness Stakes - including its trophy, the Woodlawn Vase - to a state takeover.

It also would allow the state to purchase or exercise eminent domain over Magna's Maryland properties: Laurel Park Racetrack, the Bowie Race Course Training Center and Pimlico Race Course in Baltimore.

House Speaker Michael E. Busch, Anne Arundel Democrat, said the House also would likely approve the measure, but that it was not in the state's interest to run the Preakness or the tracks in the long term.

“We just want to see the Preakness stay in Maryland. That's something the assembly agrees with,” he said.

Under eminent domain, the government is empowered to seize private property in the public interest and offer fair compensation to property owners. But the practice has provoked controversy in recent years, with many property rights advocates seeing it as an abuse of government power.

The U.S. Supreme Court first took up the issue in 1954, when justices allowed local governments to condemn private property for urban renewal and then transfer the title to private buyers.

Since then, state and local lawmakers have been testing the limits of their discretion. In 1999, the mayor of New Rochelle, N.Y., decided to condemn a neighborhood of 200 residents and more than a dozen businesses in order to build a development for Swedish furniture giant IKEA.

In 2005, Texas lawmakers used eminent domain to condemn homes in order to construct a $650 million facility for the National Football League's Dallas Cowboys.

That same year, the Supreme Court issued a landmark decision in favor of the practice, which paved the way for D.C. Mayor Anthony A. Williams to seize and rebuild the Skyland Shopping Center in Southeast.

Mr. O'Malley said the bill introduced Wednesday would ensure the state has “maximum flexibility in order to protect the Preakness.”

“We need to preserve the options available to the state to keep the rich tradition of the Preakness here in Maryland,” he said.

The bill could encounter legal troubles owing to Magna's bankruptcy status. Under federal law, a state cannot unilaterally exercise eminent domain powers over a bankrupt company.

But state attorneys say Magna has not recognized the state's interest in keeping the Preakness. The race draws about 100,000 spectators and generates more than $20 million in revenue each year, according to the governor's office. The 134th running of the race is scheduled for May 16.

Maryland currently has a law that gives the state the right to purchase the Preakness in the event the race is put up for sale.

“There is nothing that exists in the bankruptcy code which prevents the state from using this authority,” said state Assistant Attorney General Austin Schlick.

Magna interim chief executive Greg Rayburn told the Associated Press on Wednesday that he was “disappointed” by the decision.

“We are engaging in discussions with the governor and the legislature in order to find a more amicable solution,” he said.

Officials said the state has a vested interest in keeping its struggling horse-racing industry afloat. Horse breeding and horse racing generate more than 20,000 jobs and have an annual economic impact of $1.5 billion, said Christian S. Johansson, secretary of the state Department of Business and Economic Development.

“The horse-racing industry currently generates three times more revenue than any other sport combined,” said Mr. Johansson. “The economic impact is very significant.”

The potential relocation of the Preakness conjured up memories of the contentious sale of a Baltimore-based sports team. On March 26, 1984, the General Assembly took up a pair of bills that would have prevented the NFL's Baltimore Colts from leaving the city. One bill called for the city to condemn the Colts and use eminent domain to take over the team's assets.

On the morning of March 29, the city awoke to find that 15 Mayflower trucks had moved the entire team and its property to Indianapolis. The city filed an eminent domain lawsuit a day later, but a federal judge rejected it.

Mr. O'Malley said the bill offered to legislators Wednesday was designed in part to avoid watching the Preakness suffer the same fate.

“I don't believe that any of them wants to be in a position, where we're looking back over our shoulders at the Mayflower moving vans and saying, 'Golly. I wish we had acted,' ” he said.

Maryland lawmakers will have to act quickly, given that the General Assembly adjourns on Monday.

“If there's a will, there's a way,” Mr. Miller said. “If this legislation is something the assembly believes is important, we can make it happen.”

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