BALTIMORE — Above the grandstand entrance and near a banner highlighting the upcoming 147th Preakness Stakes, a man in a neon yellow T-shirt rolled a fresh coat of white paint onto the aging facade of the Pimlico Race Course one recent morning. Below him, a crew repainted faded white lines on the cracked asphalt of the parking lot.
“It needs work,” one worker said of the fractured lot, “basically all of it.”
Next weekend, for the first time since the pandemic began more than two years ago, tens of thousands of people will flock to this historic, yet long-neglected, North Baltimore racetrack for a weekend of raucous revelry and racing.
Dilapidated for decades despite hosting Maryland’s most famous annual event, Pimlico has been patched up and prettied each year for decades to host the Preakness even as its owner suggested moving the event to its other, busier Maryland thoroughbred track, Laurel Park.
To keep the Preakness in Baltimore, the General Assembly approved $375 million in bond funding two years ago to renovate both of the tracks, but the work has been postponed due in part to COVID-19 as well as other complications with logistics, the design process and a thorny $30 million-plus tax question.
Laurel Park’s renovation was slated to begin first and be completed this year, but following setbacks there, the General Assembly decided in February that Pimlico — which is expected to continue to host the Preakness during construction — would proceed first. The timeline for the Laurel Park project remains undefined, but site work is scheduled to begin at Pimlico immediately after next year’s Preakness, with hopes to be finished ahead of the Triple Crown race in 2026.
A much-needed renovation
The Pimlico racetrack is 150 years old, and in many places, it nearly looks its age.
A 1993 article in The Baltimore Sun called the track’s “deterioration a sign of racing’s troubled times,” and from peeling paint and cracked tiled floors to shoddy backside conditions, that deterioration continues.
Some who work in the racing industry hesitate to bad-mouth the track for its history and tradition, but eyesores and erosion are evident.
“That place has made a lot of money, and they never put anything back into it. They just took the money out,” said trainer Kieron Magee, who’s been working at Pimlico for 40 years. “Now, they basically need to gut the whole place.”
Pimlico and Laurel Park are operated by the Maryland Jockey Club, which is owned by The Stronach Group, and Stronach sought to move the Preakness from Pimlico to Laurel, spending 87% of its state subsidies on Laurel from 2013 to 2019, rather than Pimlico. But a deal was struck in 2019 — the same year that nearly 7,000 seats in the Old Grandstand at Pimlico were closed for safety reasons — keeping the race at Pimlico.
That agreement required improving both Pimlico and Laurel Park, which has proved uniquely cumbersome.
“It’s probably the most challenging project I’ve ever encountered,” said Gary McGuigan, who is managing the project for the Maryland Stadium Authority, “and I’ve been here for 27 years at the stadium authority.”
Hiccups and complications
Since their inception, the Pimlico and Laurel projects have been linked. Renovating one essentially requires renovating the other.
That’s partially for political reasons: some stakeholders, like the racing industry, have significant interest in improving Laurel Park, which houses more than 1,000 horses and will be the state’s primary racing venue. Others, like leaders in Baltimore and some in the General Assembly, are eager to improve Pimlico, especially as it relates to the storied Preakness and to the impoverished Park Heights community. Improving both tracks satisfies more groups.
“The fear for the racing industry is that this will become a Pimlico-only project,” said Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, “and if it becomes a Pimlico-only project, it will do material, if not fatal, damage to the racing industry in this state.”
Foreman worked with Alan Rifkin, the attorney for the Maryland Jockey Club and the Preakness Stakes, and Bill Cole, the former CEO of the Baltimore Development Corporation and the lead negotiator for the city, to create the plan to improve both Pimlico and Laurel Park in 2019, and they still agree that Laurel Park, like Pimlico, eventually will be renovated.
But the dual projects create a logistical Rubik’s cube; move one piece, and it requires another piece to move, as well.
Racing can’t stop due to the construction projects, meaning that shovels will be in the ground while horses are stabling and racing in the state. For example: If stables are knocked down at Pimlico, those horses will need to be housed elsewhere, perhaps at Laurel. Do too much at once — including simultaneously rebuilding each track — and horsemen could take their horses and business out of the state, jeopardizing the sport’s future in Maryland.
The transition creates a juggling act of horses, stables and races that Rifkin called a “jigsaw puzzle.”
For nearly two years, the plans had been for the Laurel renovations to begin first, but following delays, the legislature directed the stadium authority in February to move forward with the Pimlico project, including beginning the process of demolishing the Old Grandstand by Sept. 1. It also required the authority to spend at least $2.5 million to submit two reports, one by Sept. 30 and one by Jan. 1, on the progress of both projects.
The Pimlico project has been fairly straightforward since concepts were considered two years ago. As planned in 2020, The Stronach Group will give Pimlico to Baltimore, which will lease it back to Stronach for the duration of the Preakness meet each year; otherwise, the city will control the historic racecourse. The track’s oval will be shifted 30 degrees, creating attractive parcels of land for development in the Park Heights neighborhood.
Much of the current infrastructure will be torn down and instead of being permanently replaced, temporary structures and seating will be brought in annually for the Preakness.
The original concept called for the new Pimlico oval to be just under a mile, but that would jeopardize the track’s status as a championship host, so the track was modified to a mile. Aside from that, the Pimlico plan has been unchanged.
“It’s the Laurel portion of the project that has presented numerous design and transition issues that have to be dealt with,” Foreman said.
After initial concept plans were created for the Laurel project, stakeholders realized there needed to be a training track at Laurel, which they didn’t include initially. The size and design of a new clubhouse also has not been finalized, among other problems, all complicated by rising interest rates and other financial issues.
Meanwhile, the expected construction budget for Pimlico has risen, from around $200 million to $220 million, but the Laurel budget remains unknown. Due to needed additions and soaring construction costs, it will certainly be more than anticipated, which will require more capital, another unresolved hurdle. If costs are not cut, more financing would be needed — from where exactly remains unknown.
The stickiest quandary, however, might be a tax issue stemming from the Tax Reform Act of 2017 and its changes to section 118 of the federal tax code.
More than $150 million in bonds from the state are scheduled to go to improvements to Laurel Park, which is owned by Stronach. Before 2017, money given to for-profit companies for public-serving projects was not federally taxed, but a bill passed by Congress and signed into law by President Donald Trump amended that, requiring companies to pay federal tax on money from a government entity.
Stronach would need to pay approximately $30 million or $40 million in taxes over the course of the construction project on whatever bond funds go to Laurel, which is “just not tenable,” said Rifkin, attorney for the Jockey Club, whose parent company is Stronach.
“It would be unrealistic to assume that [The Stronach Group] or [the Maryland Jockey Club] could or even would pay a … tax of that magnitude,” Rifkin said, “and it would be inconsistent with the way in which other sports franchises in the state have been exempted.”
Because Pimlico will be owned by the city, it won’t be subject to the tax. Similarly, when state funds pay for improvements to Camden Yards and M&T Bank Stadium, they are not taxed because those venues are state-owned. When the MSA authorized up to $59.5 million in bonds toward a new stadium in Hagerstown, the land that venue will sit on was conveyed to a nonprofit, avoiding that federal tax.
Rifkin said stakeholders were aware of the issue in 2020 when plans were first laid out, but an initial effort to insulate the construction from the tax was not successful. The city of Baltimore has since hired an independent tax counsel and stakeholders continue to seek a solution — which could involve Stronach conveying the Laurel land to a government entity or a tax-exempt group.
“Tax law really can gum up deals,” said Andrew Blair-Stanek, a tax law professor at the University of Maryland’s Carey School of Law. “It is quite interesting to see how a change in the tax law, getting rid of one loophole, could affect deals going on all over the country.”
Moving ‘closer to the finish line’
In 1987, the Maryland General Assembly passed a law essentially requiring that the Preakness always remain at Pimlico, and Del. Sandy Rosenberg was among those who voted in favor of it at the time.
The Baltimore Democrat, who remains in the General Assembly and represents constituents around Pimlico, called the current plan to revitalize Pimlico “the best of both worlds” because it will keep the Preakness at the track while simultaneously invigorating the Park Heights community. Though there has been no work yet on-site at Pimlico, the legislation passed a few months ago aims to spur activity.
“Let’s move the ball down the field,” Rosenberg said, “or in this instance, I guess the metaphor is move us closer to the finish line.”
Rev. Troy Randall, chairman of the Pimlico Community Compact Committee, said he’s as optimistic now as he was two years ago about the project and what it means to the revitalization of Park Heights.
Plans for the future of the parcels of land that will be created remain in limbo, but Randall said there are discussions to bring at least some of the following: a supermarket, a hotel, retail shops — not a “bunch of high-end stores that we are priced out of”— a community center, and a memorial to Black jockeys.
“It’s what families have envisioned for many years, and it gives us opportunities for our residents to be hired and employed here in the community,” he said. “They can walk to work. It gives us a sense of hope and building.”
Magee, the trainer, is among those, however, who have grown impatient with the lack of tangible progress at either Laurel Park or Pimlico. He’s lost confidence that the project actually will ever be completed.
“I don’t think it’s going to happen, myself,” he said. “I think whatever momentum they had, COVID took care of that.”
Still, officials expect the plans to move forward.
McGuigan said he doesn’t think there are “any 100 percent guarantees in life,” so he isn’t absolutely certain the renovations will happen, but, he said: “It’s a big, positive step that the legislature took to have Pimlico advance.”
Keeping the Preakness at Pimlico each year of construction remains a priority, and McGuigan said it would be a “significant failure” if the Preakness were to be moved for even a year.
“I still am fairly confident, as I’ve been since day one,” said Cole, “that we’ll be able to do the site work at Pimlico and not miss a Preakness in Baltimore.”
Many hurdles remain to be cleared before the Pimlico and Laurel Park projects could be completed later this decade, but just as it has for nearly a century and a half, the Preakness will take place in Baltimore next week, on the third Saturday in May.
There will be racing and infield concerts, and though attendance is unlikely to approach pre-COVID numbers, throngs of racegoers once again will stream to Pimlico for the iconic race at the historic, if shabby, track.
“I’ve already picked out my outfit,” Randall said.
