12/14/2009 12:00AM

De Francis among six bidders for Laurel, Pimlico


Six bids were submitted by a Friday night deadline to buy Laurel Park and Pimlico Race Course in Maryland from bankrupt Magna Entertainment Corp., a top official for the company's reorganization said on Monday.

According to Michael Wildish, an executive with the bankruptcy consulting firm Miller Buckfire, the six bids included offers from a partnership of Joe De Francis and his sister, Karin, the former owners of the two tracks, and David Cordish, a Maryland real-estate developer whose bid to build a casino just miles away from Laurel in Anne Arundel County has yet to be approved by the county's zoning approval board. The other four bidders asked to remain anonymous, Wildish said.

Magna, which filed for bankruptcy in March, set a Dec. 13 deadline to submit bids for the tracks, and officials working for the company will determine in the next several weeks whether the bids are qualified to be considered during a Jan. 8 auction, Wildish said. However, Wildish predicted that all the bids would pass Magna's qualifying tests.

"I would hazard a guess that all six will qualify," Wildish said. "They will all be recognized by the state of Maryland or the horse racing or gambling industries as major players or operators."

The Baltimore Sun identified Carl Verstandig, a local real estate developer, as a bidder. Verstandig had earlier indicated he was interested in bidding on the tracks.

Magna is currently seeking to sell its racetrack holdings to pay down hundreds of millions of dollars of debt as part of its reorganization. The company's properties do not generate much in the way of cash or profits. Officials who are advising the company said they believe most of the debt will need to be retired for Magna and its founder and chairman, Frank Stronach, to retain any control over some of the company's marquee properties, such as Santa Anita Park in Southern California and Gulfstream Park in south Florida.

The two Maryland properties could be valuable for a variety of reasons. The Preakness, the second leg of the Triple Crown, is held annually at Pimlico and generates nearly a hundred million dollars in handle, as well as national publicity. In addition, Laurel Park is still mentioned as a candidate for a slot-machine license, despite Magna's being disqualified from the licensing process earlier this year when it failed to include a $27.5 million fee with its application.

Wildish said that all the bidders had indicated that Laurel's potential for a slot-machine license was a key factor in their decisions to make an offer. Although Maryland voters approved slot machines for five locations in November last year, only three sites have received licenses, and only one project has broken ground.

Joe De Francis, who owned a stake in the tracks until 2007, when he was bought out by Magna, said that he and his sister would immediately push for approval of slots at Laurel if their bid was successful.

"Jobs one, two, three, and four would be to do everything possible to get Laurel back into the competition for a [slot-machine] license," De Francis said. "Everyone knows that Laurel can't survive with a casino at a mall 15 miles down the road."

Along with other former minority partners in the two tracks, Joe and Karin De Francis both retain stakes in a company that would share in any profits from casino-type gambling at Laurel and Pimlico for 20 years after that type of gambling began. Magna has asked the court to strike the contract governing the profit-sharing, a motion that the partners in the company opposed in a response to the court.