09/13/2014 1:26PM

Churchill attempting to sell Fair Grounds

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Churchill Downs Inc. is attempting to sell Fair Grounds Race Course in New Orleans, a track it acquired out of bankruptcy in 2004.

A report published Saturday in the Baton Rouge Advocate said Churchill was working with JP Morgan Chase to solicit bids on Fair Grounds, which operates a profitable slots parlor in addition to hosting a fall-winter Thoroughbred meet and a summer Quarter Horse meet. The report said CDI required that interested parties submit a purchase proposal by Wednesday.

That CDI would be interested in selling Fair Grounds is not surprising. The company came under heavy fire earlier this year from various Louisiana entities – including the state legislature, which threatened to withhold its license to operate Fair Grounds – for failing to reinvest profits from slot machines and video poker games back into horseracing.

Moreover, CDI’s long-term strategy appears to be focused more around casino gambling and its signature racing product, the Kentucky Derby, than operating a string of racetracks. In late May, CDI leased Calder, its South Florida racetrack, to its longtime rival, The Stronach Group. 

Fair Grounds recently began installing new video boards in the infield and paddock and has begun work on upgrading a turf course that has not drained properly for years. Fair Grounds officials presented those initiatives at a meeting last month of the Louisiana Racing Commission. The LRC, the legislature, and the local horsemen’s group have praised Fair Grounds’s recent racing-related investments, which include upgrades to the backstretch. The track’s 2014-15 race meet begins Nov. 21.

CDI acquired Fair Grounds for roughly $47 million in 2004. The Advocate reported the current asking price for the property to be $125 million. That number was said to be too high for one potentially interested party, Tom Benson, the local owner of the NFL’s Saints and NBA’s Hornets.