Maryland Stadium Authority delivers part one of report to Maryland General Assembly
In April of 2022, the Maryland General Assembly threw down the gauntlet and demanded by law (HB897) that the Maryland Stadium Authority (MSA) deliver a two part report regarding the progress of Pimlico Race Course and Laurel Park.
Past The Wire has obtained a copy of part one of the report that the General Assembly received on September 30.
The legislation noted several agreements and reporting requirements that must be finalized before MSA may issue bonds and/or proceed with construction related activities for the Pimlico project.
Of eight prerequisite agreements and reporting requirements only one has been completed. To read the eight prerequisite agreements and requirements click here.
The one completed is a Memorandum of Understanding (MOU) by and among LifeBridge Health, Inc., the Baltimore Development Corporation (BDC), and the Maryland Jockey Club (MJC) required by Chapter 590. The parties entered into the MOU, which was fully executed, and effective April 18, 2022.
The MSA report states that it was the intent of the General Assembly for MSA to proceed with design, architecture, engineering and permitting at the Pimlico site.
MSA stated that due to the disparity between MSA and MJC and the disparity between the City of Baltimore (the City) and MJC on major business terms of the primary agreements and the history of actions, inactions and changes by MJC outlined in the report, MSA does not recommend entering design as directed under HB897 in September 2022 until the Pimlico Development Agreement, the MJC Covenants and Restrictions Agreement with the City, and the MJC Covenants and Restrictions Agreement with LifeBridge are finalized.
After considering the ongoing racing operations at the Pimlico racing facility site during construction, and in consultation with the Pimlico racing licensee, the General Assembly for MSA to proceed with demolition of the Pimlico Old Grandstand on an expedited basis.
The General Assembly’s original purpose requesting the report was learn of the efforts by interested parties and the MSA to reduce the overall project costs of both facilities.
Laurel Park Report
Particular to Laurel Park, was a report on the cost and schedule for the racing facility site based upon the programmatic desires of current ownership (MJC/The Stronach Group (TSG).
Lawmakers requested a report on the cost and schedule for Laurel Park based on the implementation of recommendations in the report required under Chapter 61 Section 3(f) from the mile thoroughbred licensees, the Maryland Thoroughbred Horsemen’s Association (MTHA), and the Maryland Horse Breeders Association (MHBA).
The plan is/was to proceed with testing and evaluation of the existing racing surfaces at the Laurel Park site, including geophysical borings as needed.
Following enactment of Chapter 590, MSA spent considerable time and effort working in conjunction with representatives from MJC and MTHA to identify programmatic needs and develop conceptual plans for Laurel Park. Throughout the extended programming effort, the requirements and desires of both parties continued to fluctuate. This has resulted in the development of numerous conceptual plans and estimates.
A finalized baseline MJC concept program was agreed upon by the parties in late 2021. This program and the associated concept plans served as the basis for the third-party cost estimates generated in early 2022 that were then shared with leadership in the spring of 2022. At that time, Laurel Park was projected to be more than $150 million over budget based on revenue projections and schedule assumptions.
Following a June 14, 2022, introductory kick-off meeting, the committee participated in several focused bi-weekly workshop sessions to identify a program that would satisfy the needs of the racing industry in the event of a change in the ownership or operational structure.
MSA cannot proceed with a schedule for development until there is resolution on the owner/operator arrangement and associated program for Laurel Park.
Pimlico Development and Parceling of Land
In 2016, MJC sold a 25-acre parcel of Pimlico land to LifeBridge for $10 million. Agreement 3, noted open in the report, mentions a conveyance of a portion of property by LifeBridge. It is unclear if this is the property referred to in the report.
The report notes conveyance is necessary for rotation of the track surfaces and general redevelopment of Pimlico.
The original plans set the track distance at 7⁄/8 of a mile however the plans were amended to set the distance to one mile.
The terms of the legislation assumes MJC conveyance of the Pimlico Racing Facility to the City of Baltimore. This is still the expectation, however, this process and the terms of the agreement have not yet been finalized. The property must be owned by a government entity or non-profit to qualify for the bonds to fund the project.
Only the property conveys. MJC retains ownership of the Preakness, all trademarks of the Preakness and the Woodlawn Vase.
Agreement 8 pertains to how the Pimlico property will be developed. It is not stated in the report however only 20 acres of the property will be developed as the Pimlico Racing Facility and the remaining 90 acres to be subdivided into parcels.
There has been no agreement between MJC and City of Baltimore regarding Covenants and Restrictions. MSA reported that MJC shared a voluminous 94-page document with the City outlining their desired covenants and restrictions associated with the use and redevelopment of the (subdivided) parcels surrounding the redeveloped Pimlico Racing Facility.
There is a general disagreement between MJC, the City and MSA over the Pimlico Development.
Agreement 4 is required to outline the roles, responsibilities, and requirements for each party during the actual redevelopment process. MSA developed and shared a first draft of the Development Agreement with MJC and the City on May 25, 2022 and received MJC’s preliminary comments on August 16, 2022.
MSA stated while the parties will continue to work towards an agreement, they all currently remain far apart on the terms.
The two biggest areas of disagreement are: (1) MJC’s request for full approval rights on all programming, scheduling, and budgeting decisions and (2) the construction related restrictions surrounding the Preakness during redevelopment. Follow-up negotiation meetings between the parties began in September.
Although MSA has recommended not issuing the bonds due to lack of agreements there had been progress over the past 18 months in planning and design.
Following the enactment of Chapter 590, MSA conducted an extended procurement process for design services that concluded with its engagement of Ayers Saint Gross (“ASG”) for Pimlico in February of 2021. Internal kick-off and planning meetings with ASG commenced on March 1, 2021. MSA spent considerable time and effort working in conjunction with representatives from MJC and MTHA to confirm the program requirements for the redeveloped Pimlico Racing Facility. The efforts resulted in numerous conceptual plans with a finalized baseline MJC concept program agreed upon in late 2021 (the “2021 Pimlico Program”). This program served as the basis for the third-party cost estimates generated early 2022 and shared with leadership in the spring of 2022.
The first programming workshop for the Pimlico Racing Facility was conducted on April 16, 2021. Over the course of the next eight months, MSA and its consultants worked in conjunction with representatives from MJC and MTHA to identify their programmatic needs and desires and generated multiple concept level plans for a redeveloped Pimlico Racing Facility. MSA worked with third party cost estimating consultant Rider Levett Bucknall (“RLB”) to generate program level estimates for each of the concept plans. Throughout the process, MJC identified several programming desires that differed from the original concept plan that had served as the basis for Chapter 590.
These changes included but were not limited to: Increase in the overall gross square footage associated with the new clubhouse structure. And addition of an elevated superdeck structure within the infield to accommodate Preakness overlay desires.
Chapter 61 cleared the path for advancing design efforts to proceed on Pimlico and MSA has continued to engage with MJC representatives. However, before advancing design efforts, MSA requested that MJC confirm its agreement to the 2021 Pimlico Program.
MSA reports that MJC’s responses were piecemeal and staggered, with final comments not received by MSA until September 9, 2022. Though many of the 2021 Pimlico Program Requirements were confirmed, MJC’s comments do result in some changes to the 2021 Pimlico Program.
The bottom line is the Pimlico project is at a standstill with exception of demolition of the old grandstand. Laurel is not moving forward and is estimated to cost $150 million more than originally planned
Part two of the report is due to the General Assembly on January 1, 2023.
To read part one of the report in its entirety click here.
By Maribeth Kalinich
Photo by April Inloes Smith
