05/21/2010 11:00PM

Thistledown auction bids due Monday


MI Developments, the company that took over the racing assets of the bankrupt racetrack concern Magna Entertainment, has placed a Monday deadline for bidders interested in buying the Cleveland-area racetrack Thistledown, according to officials of the track. The sealed-bid auction will be held Tuesday

The auction will be the second held for the track, which is currently in the midst of a six-month live racing season. Last year, the casino company Harrah's Entertainment reached an agreement with Magna Entertainment to buy the track for $89.5 million, but the deal hinged on whether Thistledown and other Ohio racetracks would be the sole entities allowed to operate slot machines in the state.

The auction is being handled by Miller Buckfire, a bankruptcy consulting firm hired by Magna to market its racing properties. Officials for Miller Buckfire and MI Developments did not immediately return phone calls on Saturday.

Brent Reitz, the general manager of Thistledown, said on Saturday that the pending auction should provide some relief to the track's employees.

"I'm hoping this draws the story to a close," Reitz said. "Our employees and our horsemen have gone through a lot over the last two years."

The auction will take place against a backdrop of significant change on the Ohio gambling landscape. Last November, voters approved casinos in the state's four largest cities - Cincinnati, Cleveland, Columbus, and Toledo -- and this November, voters will be asked whether to approve slot machines at the state's three Thoroughbred tracks and four harness tracks.

In addition, two months ago the gambling company Penn National reached a deal to buy Beulah Park near Columbus. Penn National already owns the harness track Toledo Raceway, and won the right to operate a casino in Columbus and Toledo through last year's referendum. The company has said in financial documents that it plans to spend $700 million on the two facilities.

The November referendum will likely be influenced by an ongoing probe by Secretary of State Jennifer Brunner into the funding behind LetOhiovote.org, an organization that successfully blocked the state from implementing a plan to authorize slot machines at Ohio racetracks last year. LetOhiovote.org also led the petition drive to put the racetrack-slot plan on the ballot.

Earlier this year, Brunner issued subpoenas to the Virginia-based company, New Models, which provided all of the funding for the organization, and, after New Models refused to comply, Brunner received a ruling from the Ohio Supreme Court that upheld her right to issue the subpoenas. Critics of the effort to block the racetrack-slots plan have said that voters should be allowed to know what companies provided the funding.

Any proceeds above $20 million from the Thistledown sale will go to Magna's unsecured creditors in a deal worked out with the creditors' committee allowing the transfer of Magna's racing assets to MI Developments. The court approved the deal in April, though it has been challenged by a group of Magna's shareholders.