Updated on 09/16/2011 8:57AM

Raze and rebuild Pimlico? 'Tis folly

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WASHINGTON - Maryland racing fans might want to save the front page of Sunday's Baltimore Sun, for it could become a collector's item. Years from now, when Pimlico Race Course is even more decrepit than it is now, we can look back on the bold headline and have a bitter laugh: "Plans for Pimlico: raze and rebuild it."

This is what Frank Stronach, chairman of the Magna Entertainment Corporation, declared that he will do after his company takes control from the Maryland Jockey Club. He told the Sun, "Pimlico must remain; there's too much tradition involved. But it would be totally rebuilt from scratch. We would flatten it completely." And that's not all. Stronach envisions building, on or near the Pimlico property, a technical training center for inner-city youths. The Sun dutifully reported these ideas and interviewed politicians and civic leaders for their reaction to the grand plan.

Baltimoreans revere Pimlico and the Preakness as much as they love their crab cakes, and it is cruel to spoil their fantasies. But this fantasy is not going to become a reality. Stronach's plan makes no sense financially.

Since it started acquiring tracks from coast to coast, Magna has been steadily losing credibility in the racing industry for announcing great plans and not following through. At Santa Anita, Magna declared in 1999 that it was going to replace the paddock gardens and the downhill turf course, and build a shopping mall and an equine arena. So far none of these things has happened; the main innovation at Santa Anita is a new restaurant. It bought 225 acres in Dixon, Calif., as the site of a proposed $150 million track; nothing has happened. Last year, Magna announced plans to tear down the grandstand at Gulfstream Park and build a facility that would include a simulcast theater and sports bar as well as an entertainment arena. A few days ago Magna announced that those plans have been postponed indefinitely.

They are on hold, the company acknowledged, because it has been spending too much and earning too little. After announcing second-quarter profits of one cent per share, president and chief executive officer Jim McAlpine told Wall Street analysts in a conference call: "We need to slow investment and capital spending. We need to take a breather."

It seems bizarre that, four days after this belt-tightening, the company's chairman would announce his intention to undertake a huge new capital expenditure.

No one disputes that the Pimlico plant is in dismal condition, yet no rational owner could justify spending the money to rebuild it completely - a project that could easily cost $100 million.

Pimlico is a useful, profitable facility only on the third Saturday in May, when 100,000 people pack it for the Preakness. The other 364 days of the year, the grandstand is sparsely populated. The majority of the racing fans in the Maryland Jockey Club's market area are located closer to Laurel Park or Rosecroft Raceway, and they go to these sites for simulcasts rather than drive to Pimlico. If the Baltimore track were not a sacred cow, it would make more sense to consolidate Maryland racing at Laurel.

Unless slot machines are legalized and Maryland racetracks are transformed into casinos, Magna could not recoup a large investment in Pimlico. The track has just about maximized its income on Preakness Day, and a new facility wouldn't make much of a difference. Nor is it likely that a new facility would generate enough new day-to-day business to justify the cost.

I have suggested in past columns that the owner of Pimlico should undertake certain limited, affordable, and realistic improvements. The track's long-suffering, year-round customers deserve well-designed areas in which to watch simulcasts - something similar to the comfortable simulcast theater in the Laurel clubhouse. In order to make Pimlico a more attractive home for the Preakness, Magna should replace the claustrophobic, fluorescent-lit indoor paddock and build a beautiful outdoor saddling area. That would be a significant undertaking, not an outlandish budget-buster.

Stronach does not intentionally try to mislead people when he tosses out ideas like the rebuilding of Pimlico. He loves the sport, wants to improve it, and has a bold vision of its future. But all of his expensive ideas are not practical for a company that earned less than $10 million in the past year and whose entire value (as measured by its stock capitalization) is less than $300 million. People in the racing industry, would prefer to see from Magna a few small, positive achievements rather than a succession of grandiose promises that don't materialize.

(c) 2002, The Washington Post