National Post (National Edition)
Baltimore saddles Stronachs with Pimlico lawsuit
ALLEGES FAMILY PURPOSEFULLY NEGLECTING TRACK WHICH PLAYS HOST TO THE SECOND LEG OF THE TRIPLE CROWN
The City of Baltimore has filed a lawsuit seeking to seize control of one of the Stronach Group’s signature horse-racing tracks, alleging that the Canadian firm has underinvested in the facility and may be trying to move its most prestigious event to another venue.
The complaint filed in Baltimore Circuit Court on Tuesday by a group including Baltimore Mayor Catherine Pugh and the city council is attempting to block Aurora, Ont.-based Stronach Group and other related entities from moving the Preakness Stakes — a nearly 150-year-old “Triple Crown” horse race — from its current home at the Stronach-owned Pimlico Race Course in Baltimore.
Under Maryland law, the race (also owned by Stronach Group) must stay at Pimlico unless a disaster or emergency arises that would force it to move to another track in the state, the lawsuit charges.
“Racing Defendants are openly planning to violate Maryland law by moving the Preakness to a different racetrack despite the absence of any disaster or emergency, except for the disaster that they are in the process of creating,” alleges the suit, whose claims have not been proven in court.
Baltimore is accusing the Stronach Group and others of having “systematically underinvested” in the Pimlico track since around 2011. They have instead invested in a track located near Laurel, Md., the lawsuit claims, which is being eyed as the site of a future “super track.”
Citing a 2018 study from the Maryland Stadium Authority, the lawsuit says the Preakness generated US$34.4 million in direct spending and supports 620 jobs, but that the last major renovation at Pimlico was done in 1983. A study by the authority recommended a “major capital investment” to fix up Pimlico, the lawsuit said.
Baltimore is now asking the court to grant it, “by condemnation,” ownership of both Pimlico and the Preakness.
“No disaster or emergency requires transfer of the Preakness from Pimlico to Laurel, but systemic underinvestment in Pimlico, if allowed to continue and accelerate as the Racing Defendants have done, and as all Defendants plan to do, would endanger Pimlico’s ability to continue its historic role as the venue for the Preakness, and as a major economic and jobs generator for the City,” alleges the lawsuit.
“Through the systemic divestment of Pimlico, Defendants could indeed manufacture an ‘ emergency or disaster’ to justify transfer of the Preakness to Laurel, as undermaintained infrastructure begins to fail and crowds attending Pimlico races and the horses racing there are endangered.”
A spokesperson for the Stronach Group said it “believes these actions are premature and unfounded” and added that it would not be commenting further at this time.
The Preakness is known as the “middle” or “second” jewel of horseracing’s Triple Crown, a series that includes the Kentucky Derby and the Belmont Stakes. The 144th running of the race will be held on May 18.
The Baltimore Sun has reported that Stronach Group officials previously vowed that the Preakness will remain at Pimlico through 2020.
“There is no ‘Triple Crown’ without the Preakness Stakes and the Preakness Stakes belongs in Baltimore City at Pimlico,” said a statement from Baltimore City Solicitor Andre M. Davis. “And that is true by virtue of its long history and tradition as well as by state law.”
The Stronach Group owns several racetracks in the U.S., including Pimlico, which it acquired full control of in 2011. The group’s website says its operations enables it “to be the most dominant player in the Thoroughbred horse racing industry in the United States, with business relations around the globe.”
Baltimore’s legal action against the business also comes in the wake of a lawsuit launched last year by Stronach Group founder Frank Stronach against his daughter, Stronach Group chairman and president Belinda Stronach, and others. A statement of claim alleged there had been a “complete break-down” in the relationship between the two.
Frank Stronach founded Magna International Inc., and according to a statement of claim, it was under his leadership that the auto-parts giant got into the horse-racing business as well. Those interests were spun off and formerly Magna-owned racing and gaming assets now make up one of the Stronach Group’s core businesses, the suit claimed.
The full list of defendants in Baltimore’s lawsuit also includes the Maryland Economic Development Corporation. The city is seeking a declaration that says MEDCO cannot issue bonds “for the purpose of disinvesting from the Pimlico Race Course,” as well as from an area of urban renewal in Baltimore, to spur economic growth in Laurel and another area by moving the Preakness there.