Photo of Pimlico Race Course by Eric Kalet
Maryland Stadium Authority Releases Second Pimlico/Laurel Park Redevelopment Report
By Maribeth Kalinich
The Maryland Stadium Authority (MSA) submitted part two of their report on the progress of the Redevelopment of Pimlico Race Course and Laurel Park to the Maryland General Assembly on time.
I can sum up the second MSA Report with one word: Nothing.
Absolutely nothing is happening, and nothing will happen for some time.
There are too many issues to resolve. Agreements must be approved, budgets must be adjusted therefore funding must be readdressed, designs must be rethought and who will own the properties is still in question.
The original concept plans presented at the meeting at Laurel Park in October 2019 are all out the window. In fact, it’s suggested that part of Laurel’s existing clubhouse might be kept in the redevelopment. (So, why can’t they do this at Pimlico?) Click for 2019 Laurel concept plans. Click for 2019 Pimlico concept plans.
Both facilities have hazardous materials such as asbestoses and require abatement. Neither facility has an ideal lot for development of a racing facility. Laurel Park has wetlands which preclude major construction. Pimlico’s acreage shrank with the sale of the 20 plus acres to Sinai in 2016 and it will shrink more with the parceling for commercial development of the outer areas around the racing oval that will be moved to accommodate increased development.
Of the eight (8) agreements that must be resolved for bonds to be issued and the project to proceed only one has been “closed.” To read the eight agreements click here.
According to this new report progress with Pimlico hinges on resolving details regarding Laurel Park.
From the MSA Report:
“MSA cannot proceed with a schedule for development until there is resolution on the owner/operator arrangement and associated program for Laurel Park. Based upon the schedule uncertainties, all current estimates are based on today’s cost with no escalation”
Almost three years after the Maryland General Assembly passed the Racing and Community Development Act of 2020 and ten years after the 2012 agreement to subsidize horse racing with slots money, the 10-Year-Deal, that expired Dec. 31, 2022, Maryland’s racetracks are still falling apart and fading.
There is a little light in this report. It states that the Maryland Thoroughbred Horsemen’s Association (MTHA) presented MSA and MJC with two Alternative Options for the Plans for Pimlico Race Course and Laurel Park.
Both Options keep Pimlico a year-round training center with barns and horses and a backstretch. Option #2 has a caveat—the backstretch facilities would be built in the infield. These plans are further explained later in this article.
To read the full MSA Report click here. Below is a synopsis of the report.
Synopsis of the MSA January 2023 Report
Regarding Pimlico Race Course’s Redevelopment, resolution has been achieved on only one of the eight (8) prerequisite agreements and requirements for moving forward with bond issuance and construction operations. Finalizing these agreements should be prioritized, as the inability to satisfy these prerequisites will prevent the project from moving forward.
Due to the disparity between MSA and MJC and the disparity between 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 until the MJC Land Conveyance, Pimlico Development Agreement, the MJC Covenants and Restrictions Agreement with the City, and the MJC Covenants and Restrictions Agreement with LifeBridge are finalized.
To read the eight (8) prerequisite agreements and requirements click here.
Programming and Design Updates for the redeveloped Pimlico
MSA conducted an extended procurement process for design services with Ayers Saint Gross (“ASG”) for Pimlico in February of 2021. Internal planning meetings with ASG commenced on March 1, 2021. MSA spent considerable time and effort working with representatives from MJC and MTHA to confirm the program requirements. This resulted in numerous conceptual plans. A finalized baseline MJC concept program was agreed upon in late 2021 (the “2021 Pimlico Program”) that 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 Pimlico was conducted on April 16, 2021. Over the next eight months, MSA and its consultants worked with representatives from MJC and MTHA to identify their programmatic needs and desires and generated multiple concept level plans for a redeveloped of Pimlico.
MSA worked with consultant Rider Levett Bucknall (“RLB”) to generate program level estimates for each of the concept plans. Throughout the process, MJC identified a number of 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.
- Increase in track distance from 7⁄8 mile to 1 mile.
- Addition of an elevated superdeck structure within the infield to accommodate Preakness overlay desires.
Chapter 61 cleared the path for 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. 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. MJC’s updated programing requirements for the key project components are summarized in the Report.
MSA has worked with RLB to update the cost estimate to reflect both the requested changes to the program and the changes in market conditions since their last estimate.
With the exception of specific design tasks identified elsewhere within this report, MSA and its design consultants have not proceeded with any ongoing design services for Pimlico.
The Old Grandstand is still scheduled for demolition on an expedited basis after considering the ongoing racing operations at the Pimlico site during construction, and in consultation with the Pimlico racing licensee.
Though hazardous material surveying was always anticipated within the design consultants’ scope of services, the desire to expedite the demolition of the Grandstand resulted in a shift in the timeline for performing the services.
On May 24, 2022, MSA’s Board approved modifying the existing design consultant’s agreement to enable the hazardous material surveying and reporting process to proceed with respect to the Grandstand.
The onsite inspection and surveying were completed in early July 2022 with the associated report of findings provided to MSA on August 16, 2022. The survey findings will serve as the basis for future abatement services scope of work at the time abatement and demolition services are procured. Completed work was limited to the Grandstand.
Hazardous material surveying and reporting for the remaining clubhouse sections, backstretch facilities, and miscellaneous structures will be completed at a later date. MSA believes that proceeding with this work will leave a false impression that the project is proceeding as planned. MSA will reevaluate its position if meaningful progress is made on the agreements and requirements described in Section 2.
As far as scheduling, the January MSA report states no change in status from the September 30, 2022, report.
MSA previously reported that construction activities at Pimlico would commence no sooner than later summer 2023. Based on the prolonged program confirmation process, current agreement execution status, and level of design effort still required prior to advancing to the construction phase, this timetable is no longer realistic. It seems doubtful that Pimlico will be able to transition to construction until the program, funding and operational structure for Laurel Park have been identified.
MSA will develop a revised schedule following resolution of the outstanding items addressed elsewhere in this report.
Alternative Concept for Pimlico Race Course
Based upon the discussions during the initial workshop session, MSA’s design consultants generated two potential concepts for year-round operations at the Pimlico. MSA and its design consultants shared the alternative concepts during a second workshop session where the benefits and drawbacks of each scenario were discussed.
Concept Option #1 is more traditional and utilizes the area adjacent to Winner Avenue while the Concept Option #2 presents a more unique approach by utilizing the infield to accommodate the year-round backstretch facilities required for facility operations.
Option 1 would provide 430 total year-round stalls at Pimlico. This concept would result in a reduction in size to the future development parcels along Northern Parkway while maintaining an open infield to maximize future potential uses and Preakness patron capacities.
Option 2 would provide 446 total stalls. This option maximizes the size of future development parcels along Northern Parkway and consolidates equine operations to a centralized, secure location but would consume the majority of the infield green space, which limits potential future uses and reduces the available Preakness patron capacities.
Following the workshop sessions, the design team advanced the level of detail on the preliminary design concepts and shared the updated programing plan with RLB so that they could generate estimates for the program.
Under this scenario, the cost associated with the redevelopment of Laurel Park Redevelopment decreases and the Pimlico Racing Facility increases. As indicated in Section 4, the combined overall cost of the entire project including Laurel and Pimlico decreases.
Agreements and Requirements for Bond Issuance at Laurel
No change in status from the September 30, 2022, report.
Similar agreements to those for Pimlico will be required prior to proceeding with construction related services at Laurel Park but are not highlighted within this report given the uncertainties surrounding the advancement of the Laurel Park redevelopment at this time.
Laurel Park: MJC Program Confirmation Status
MSA went through the same process with MJC and MTHA for Laurel as they had for Pimlico. The result was 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. At that time, Laurel Park was projected to be more than $150 million over budget based on revenue projections and schedule assumptions. See the report, page 8 for the list of MJC’s required changed to Laurel Park.
Additionally, MJC indicated that their desire is to sell Laurel Park and receive compensation for the venue, adding a significant acquisition amount to the already over budget facility
MTHA identified a task force committee of industry representatives to work with MSA and its design consultants for the identification of the racing industry’s programmatic requirements in the event of a change in ownership or operating control of Laurel Park.
Following a June 14, 2022, introductory kick-off meeting, the committee participated in a number of focused bi-weekly workshops 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. The initial workshops focused on key programming components. They can be found on page 9 of the Report.
Alternative Concept that Maintains Year-Round Operations at Laurel Park
MTHA’s Secondary Program (outlined in Section 3.2.2) exceeds that of the MJC program and does not assist in reducing the budget shortfall. In early November, MTHA approached MSA with a desire to discuss an additional alternative scenario that would result in year-round training and racing operations at both the Laurel Park and Pimlico, as previously mentioned.
The proposed concept would eliminate the use of the Brock Bridge Road parcel (property of The Stronach Group) in the redevelopment of Laurel Park resulting in a decrease to the previously programmed backstretch footprint (and overall stall counts) at the facility.
Eliminating the Brock Bridge Road parcel significantly reduces the required grading and utility distribution efforts onsite and eliminates costs associated with tunneling between the two parcels. Elimination of the Brock Bridge Road parcel also reduces the cost of site acquisition, which has not been included in any of the project cost summaries presented to-date by MSA and is not included in this report.
Under the proposed alternative program concept, MTHA also agreed to the elimination of the synthetic training gallop and the elimination of the synthetic surface at the main oval track location. While the existing turf and dirt tracks would still require complete replacement, the reconstructed tracks would maintain their current width and general footprint. In addition to potential cost savings associated with the actual track construction, these concessions would also eliminate the need for an infield access tunnel, which presents a cost savings.
The alternative program scenario would limit improvements to the Laurel Park Clubhouse. The concept proposes demolition of approximately two hundred and thirty-seven thousand square feet of the existing clubhouse. No major structural or architectural improvements would be performed on the portion of the clubhouse that would remain; however, there are a number of code compliance issues that would need to be addressed. Future improvements would likely be needed to ensure the long-term viability of the clubhouse.
The long-term operating costs would vary under this scenario; however, costs associated with the acquisition of the Brock Bridge Road parcel would no longer apply.
At the conclusion of the previous programming effort, MSA and its design consultants generated a geotechnical plan to investigate the existing subsurface conditions at Laurel Park. Given the known track failures, MSA’s consultants requested “hold harmless” language be agreed upon prior to proceeding with any investigative work. This information was shared with MJC representatives but placed on hold pending further direction.
Chapter 61 directed MSA to proceed with testing and evaluation of the existing racing surfaces at Laurel Park, inclusive of geophysical borings if needed. Based upon this directive, MSA requested updated proposals from its consultants and recirculated the requested hold harmless language for review by all parties. In response, representatives from MTHA again expressed concerns that the existing tracks at Laurel Park continued to be problematic despite recent corrective efforts, further indicating that anything short of a complete track replacement would not be acceptable.
MTHA also highlighted the negative and costly disruptions that boring operations would have on the training and racing operations at the facility. This topic was further discussed by all stakeholders, with MJC acknowledging agreement with MTHA’s stance on a complete track replacement and the unnecessary cost and operations burden that boring operations would have.
Based on the agreement between the parties that a complete track replacement would be necessary and to eliminate the hardships that boring operations would have on facility operations, it was determined that proceeding with boring work at this time would not be in the best interest of the project. It is likely that some level of subsurface investigation will be required at a later stage of design, but the extent of such investigation would be significantly reduced which would enable it to be coordinated around standard track shutdown periods.
Transition and Housing
Previous estimates included a $16 million dollar allowance to accommodate transition needs. The allowance was derived based upon a combination of MJC historical cost data and MSA scheduling assumptions. A final phasing and transition plan cannot be determined until there is resolution on the redevelopment plan for both Pimlico and Laurel. MSA continues to include a $16 million dollar allowance for transition related needs in its estimates.
Previous estimates included a $20 million dollar allowance to address housing needs at Laurel Park. While MSA is not directly involved in the redeveloped housing plans, we have set aside the requested space allocations to accommodate housing needs based upon conversations with MJC. It should be noted that DHCD, in order to help this complicated project and in offering additional state support, advocated a proposal at a cost of $54 million and paid for on the operational side.
Budget and Funding Status Update
The enactment of Chapter 590 authorized MSA to issue up to $375 million in bonds to finance the design and construction of redeveloped facilities at Pimlico and Laurel Park.
During the past two years, interest rates have increased significantly and that will impact the amount of bond proceeds available for construction. During the same period, the rate of inflation and general market volatility has resulted in significant increases to labor and material costs associated with design and construction. MSA previously reported a $150 million budget shortfall based on the MJC owner/operator scenario developed at the end of 2021.
To-date, MSA has worked with MJC and MTHA representatives to generate a number of different Program Concepts. Program level estimates have been generated by RLB for each of the proposed concepts. It should be noted that each of the concepts results in a budget shortfall.
Due to the schedule uncertainty at this time, MSA has estimated the cost associated with the redevelopment utilizing a projected timeline for completion of the work in the event that all required agreements are finalized by the spring of 2023. Utilizing the current market cost estimates, MSA has applied a 5% escalation rate to future years to determine the estimated budget deficiencies identified below.
Based upon information known at this time, MSA estimates the total project budget deficiency to fall in the range of $160M and $350M with the Alternative Concept Plans being the least expensive.
It is reasonable to assume that the projected budget shortfall will continue to grow as time continues to pass as a result of the prolonged agreement negotiations and the protracted programming confirmation process.
Debt Services Financial Information
Editor’s comments: No one is sadder than I to see a sport I love, Thoroughbred horse racing, in a state I love, Maryland, decline and deteriorate.
I truly hope these plans in some form come to fruition. However, I would prefer Pimlico stay an active training facility with horses and humans 365 days a year. It’s important to have two training facilities and it is a convenience for horsemen and stakeholders in Baltimore County and northern regions.
My little grassroots Facebook group, Friends Of Pimlico, has other ideas for Pimlico. A proper museum like Churchill Downs and Saratoga have. An Equine Education and Outreach Center to draw more youths into not only horse racing but horses. A restaurant and café. A lecture hall/theatre (there already is one.) A new sportsbook room. Pimlico has the bones. MSA said so in their 2017 Study on Pimlico: Phase One.
Make Pimlico something to complement and help enliven the community. Don’t abandoned a community that had supported Pimlico for so long.
And create quality jobs that give people options and experience, especially young people.