Hawthorne, Chicago's last racetrack, sold to 'non-racing entity'
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The Chicago area has likely lost its last live Thoroughbred racetrack after a developer described as a “non-racing entity” acquired Hawthorne Race Course through a bankruptcy auction on Tuesday that attracted no other bids.
Though the sale needs approval from the court presiding over Hawthorne’s bankruptcy filing, horsemen’s officials expressed pessimism about live racing surviving beyond this year. The Illinois Thoroughbred Horsemen’s Association (ITHA) has filed a motion to tap into a state fund for racing purses in a bid to keep the current live meet going through Nov. 1, but the organization has received no indications that the winning bidder will look to do anything more than demolish the track and redevelop the 107-acre property.
“In the long, long term it doesn’t look good, and in the long term it doesn’t look good, but maybe we can get through this year,” said David McCaffrey, the executive director of the ITHA, while at the Tuesday bankruptcy auction.
Hawthorne, located in Stickney, a suburb of Chicago’s south side, had been struggling for years, but the track’s owners held out hope they could strike a deal with a partner to develop a casino on the property after the legislature authorized racetrack casinos in 2019. No such deal ever emerged.
Even after filing for chapter 11 bankruptcy protection in February, the track’s longtime president and CEO, Thomas Carey, told the court that they were seeking either bids or partnerships with casino companies so that racing could continue at the track. Under the 2019 legislation, the casino license was tied to the racing license.
But at the Tuesday auction, there was still no interest from a casino operator. The Delaware-registered company that won the bid, called Allimac, faced no rivals for its $90 million offer, which was approved by the court as the stalking-horse bid last week.
Thomas Carey is one of dozens of descendants of Robert Carey, who bought the track in 1909, to hold equity in the track. According to sources, obtaining unanimity from the stakeholders complicated efforts to reach a deal on a casino, going all the way back to 2019.
Although the bankruptcy court could intervene in the sale and decline to approve the Allimac bid, that seems an unlikely outcome. A hearing has been scheduled for July 20 for the court to evaluate the bid.
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At the same hearing, the ITHA’s motion to get approval for the release of $1.125 million from the Illinois Horse Racing Purse Equity Fund will also be heard. Horsemen believe that the release of the funds would allow racing to continue at Hawthorne on a two-day-a-week schedule through Nov. 1. Earlier in June, the court approved a separate release of funding from the track’s debtor-in-possession financing that would keep the purse funds flowing through July 20.
Hawthorne’s live meet this year started in April in the midst of bankruptcy negotiations. Although the meet began with racing two days a week, the track dropped Saturdays and has only run on Sundays for the last three weeks. Handle and field sizes have plummeted at the meet compared to last year.
Hawthorne has been the sole live racetrack in the Chicago area since Churchill Downs Inc. announced it had reached a deal to sell Arlington Park – one of the live-racing jewels in North American racing – to the NFL’s Chicago Bears in 2021. The Bears bought the 326-acre property for $197.2 million.
The Bears had outlined plans to build a new stadium on the site, but those plans are now competing with an offer by Indiana to provide generous tax breaks for a stadium in Hammond, just over the Illinois border.
Arlington had its own problems, but according to CDI’s financial statements, the track produced positive cash flow. CDI executives said they made the decision to sell the track because the casino tax rates contained in the 2019 legislation were too onerous.
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