Four Months After Announced Arlington Sale, IRB Just Now Initiates CDI Talks

After four months of no public action by the Illinois Racing Board (IRB) since Churchill Downs, Inc. (CDI), announced its polarizing intention to sell Arlington International Racecourse for “non-horse racing” purposes, IRB chairman Daniel Beiser disclosed just before the end of Tuesday's meeting that the IRB will only now begin the process of reaching out to the gaming corporation to try and get a clearer understanding of what is likely to happen to suburban Chicago's landmark Thoroughbred track, which faces potential permanent closure at the end of this season.

But Beiser said that discussion with CDI won't happen at an open, public meeting at which stakeholders can listen to sworn testimony and commissioners can ask questions about the potentially devastating blow to Illinois racing.

Instead, Beiser explained, he is asking the IRB's executive director, Domenic DiCera, to set up a private phone call “in the near term” with CDI that will include only those two IRB officials and whichever representative(s) CDI makes available.

“Hopefully it will become a reality soon.” Beiser said, seemingly indicating it's not a certainty CDI officials will agree to participate.

“Two things I want to be able to accomplish by that [call],” Beiser said. “Number one is I want to reiterate and explain to them how much this uncertainty is impacting the men, women of the horse racing industry moving forward…. The last two years have been unbearable for these men and women and their future.

“The other thing I would like to find out–as much as they'd like to divulge–[is] what's going to happen in the near term and in the long term regarding this whole process?” Beiser said.

Beiser said it was only on Monday–the day prior to the June 22 meeting–that he finally directed the IRB's executive director to initiate contact with the gaming corporation. CDI had announced its intention to sell Arlington back on Feb. 23.

“This is the proper time now to make that contact,” Beiser explained. “Prior to this, the bidding process was open and was ongoing. That has come to a conclusion. And now, from what we've been told in the past, their decision is going to be made sometime in the third quarter. But we would like to try to, again, ask them to please bring some conclusion to this that would allow for people to plan for their future.”

Beiser said he'd like CDI to accede to some form of “hopeful accommodation” that would help to preserve the linchpin track of the Illinois Thoroughbred circuit, although he did not elaborate and spoke only in general terms about what might be discussed in that private phone call.

“Once we've made that contact, I will reach out to commissioners to let them know what went on…as soon as that phone call, hopefully, is completed,” Beiser said.

The IRB has now held three teleconference meetings since Arlington was officially put up for sale. Yet instead of addressing head-on the prospect of the region's signature track vanishing or proposing ways in which regulators might help to salvage racing at Arlington under new ownership, the IRB has treated the most pressing Illinois racing issue in decades as the proverbial “elephant in the room” by almost entirely avoiding the subject during open, public sessions.

Only one commissioner, Alan Henry, has even brought up the topic at all, using the “commissioner comments” portion of the agenda during the last three monthly meetings to read into the record prepared statements seeking a “win-win” outcome for CDI, the racing community, and the state.

But up until Beiser's disclosure on Tuesday about the planned phone call, the entire nine-member board has reacted with silence and inaction regarding the Arlington sale each time Henry has spoken up.

Although CDI has stated it has received multiple bids on the 326-acre Arlington property, only two have been publicly disclosed by the bidding parties.

One, submitted by the track's former president, Roy Arnold, in partnership with a consortium of developers and investors, calls for the track's grandstand and track to remain in place, while a mid-size arena for a minor-league hockey team is constructed as part of a 60-acre entertainment district alongside a 300-unit housing development and 60 acres of industrial space. Racing would continue under the new ownership.

The other bid is from the Chicago Bears football team, which wants to build a new stadium and put up mixed-use development on the site, razing the racetrack to do so.

On June 21, officials for the village of Arlington Heights, where the track is located, voted unanimously to tweak some zoning rules to prohibit certain uses of that property, like for adult businesses, kiddie parks, funeral parlors and warehouses.

But according to a story in suburban Chicago's Daily Herald, Mayor Tom Hayes underscored at that Monday night meeting that the village does not control or own the property, and there's only so much it can do to impact the outcome of the sale.

“The ultimate decision will not be ours. Certainly we'll have some involvement in terms of uses down the road. But the proposals were not submitted to the village of Arlington Heights, but to Churchill Downs…. As I've said many times, and I think the board agrees, our goal is to put the property to its highest and best use for our community.”

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Former Track President Submits Bid for Arlington

The future of Arlington Park remains very much up in the air, but Roy Arnold is convinced that racing can prosper there and is hopeful that he can spearhead an effort to insure that one of America's most beautiful racetracks remains a racetrack for years to come.

Arnold should know. He was the track's president during better times, from 2006-2010, and is currently the president and CEO of Endeavor Hotel Group. Arnold was instrumental in bringing together a consortium interested in purchasing Arlington Park from Churchill Downs. Churchill announced in February that it was putting the track up for sale and set Tuesday as a deadline to receive bids. Other than Arnold's group, it is not known who made bids and for how much.

“We have this iconic jewel which is known throughout the world and people are accepting as inevitable the fact that it's going to be bulldozed,” he said. “For the industry to stand by while that happens would be tragic.”

Endeavor sent out a press release Tuesday in which it said that it had joined forces with three other companies as well as “high net worth individuals.” The plan is to create a whole new Arlington, just one facet of what Arnold called a “diversified, four-seasons sports and entertainment district.” The foot print of the racetrack itself will be reduced and the land that is left over will be used to build an arena suitable for a minor league hockey team, a low-density housing development and a 60-acre industrial space. The ancillary businesses will create a revenue stream that will make it easier to justify keeping racing on the site. He also said that if the group takes over Arlington it will be able to offer sports wagering.

Arnold would not disclose how much his group bid, but was confident that it will be enough to secure a deal.

“We have the passion, we have the capital, we have the vision,” he said. “Now all we need is the opportunity. That started with our putting the bid in. Now we have to let the process unfold. We believe we will have one of the highest, if not the highest, bid.”

Arnold's group has the backing of the Illinois Thoroughbred Horsemen's Association, which has worked behind the scenes to find a potential buyer interested in maintaining racing. While Arnold realizes there are plenty of challenges operating a racetrack, especially one that does not receive revenue from a casino, in the modern era, but he said there's no reason why racing in Chicago can't succeed.

“People have concluded that absent subsidies this is a dead sport, that if you take away the supplements that go toward the major racing states that still have good programs that it would be difficult to see them continuing,” he said. “We can create a different model that will work. The fact is the track is profitable and can be profitable as a racetrack.”

Arnold foresees operating a “boutique” style meet that would be shorter than Arlington's current season. That will help with the purse level, currently a problem with Arlington offering some of the smallest purses in the sport. The plan also calls for lowering the takeout to make the product more attractive to bettors.

While Arnold and his partners believe an on-going racing operation at Arlington will work, it's clear that the bid also involves a desire to keep racing going at a track that has been around since 1927.

“There is for some reason an inability of some in the industry to understand that the demise of Arlington in America's third largest media market would be a catastrophe for the sport,” he said. “We are doing this because we have a passion for thoroughbred racing.”

But there's only so much that Arnold can do. Churchill Downs is under no obligation to accept their offer, even if it is the largest one submitted. WGN Television reported that there are fewer than 10 prospective buyers and that “a couple” of the bids came from groups interested in maintaining Arlington as a racetrack. WGN speculated that the Chicago Bears may be involved and may be interested in building a new stadium on the racetrack property.

In May, the Illinois Thoroughbred Horsemen's Association urged the Illinois Attorney General to launch an antitrust probe of Churchill Downs, alleging it had taken steps to preclude casino gaming and diminish pari-mutuel wagering at Arlington. While Churchill never applied for a casino license for Arlington, it is heavily involved in gaming in the state and is said to be interested in opening new casinos.

Additionally, the Village of Arlington Heights approved an ordinance to prevent racetrack owner Churchill Downs from prohibiting any future buyer from continuing to operate the facility as a racetrack.

Is it in Churchill's best interests, politically, to sell the property to a group interested in keeping racing alive?

“Churchill has two ways of going,” said Mike Campbell, the president of the horsemen's group. “They can reject this offer, but if they do it brings up all sorts of issues about anti-trust allegations that are currently floating around that the Attorney General may be looking at. I know there is an effort among legislators to make that happen. Many legislators are very concerned about how this all came down. If I were Churchill, I would take a look at all that. They have other interests and bigger fish to fry in Illinois than eliminating horse racing at Arlington Park. I believe they might finally capitulate and allow this to happen for the single reason that have their eye on a casino in Waukegan and in the city of Chicago. It's up to them. The hard way or the easy way. It's their choice.”

The 2021 meet is set to conclude Sept. 25. Churchill has already said this will be the last ever meet at Arlington under their ownership. There's nothing to do between now and then but wait, and hope that Arlington is sold to a group that believes in the future of racing in Chicago.

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‘Future Of Arlington Park Can Be Very Bright’: Former Track President Heading Investment Group Hoping To Keep Racing Alive

Roy Arnold, who served as president and CEO of Arlington Park from 2006-10, announced his intention on behalf of a group of investors to purchase the Arlington Heights, Ill., racetrack in a letter to the village's board of trustees prior to their regularly scheduled meeting on Monday night at which Arlington's future was on the agenda.

Arnold, who currently heads the Endeavor Hotel Group, is aligned with Mike Campbell, president of the Illinois Thoroughbred Horsemen's Association in an effort to continue live racing at the suburban Chicago racetrack after owner Churchill Downs Inc. said in 2019 it would not seek a casino license and now has the property listed for sale. 

Arlington Park opened for live racing on April 30 and is scheduled to run through Sept. 25 in what many assume will be its final meeting.

During their Monday meeting, the Arlington Heights board of trustees voted unanimously in support of two resolutions: one that would restrict the types of businesses  permitted if the racetrack property is developed and the other preventing Churchill Downs Inc. from putting restrictive covenants on a sale agreement (i.e., restricting a buyer from continuing to operate Arlington Park as a racetrack or to add casino gambling).

Following is the text of the letter from Roy Arnold, president and CEO, Endeavor Hotel Group:

Good evening, Mayor Hayes and members of the Arlington Heights Board of Trustees. Thank you for the opportunity to address you concerning the future of Arlington Park, a gem among racetracks in North America and a community asset with tremendous untapped potential.

A decade ago, I had the privilege to serve as Arlington Park's president and chief executive officer. I witnessed the venue's attraction to local families and friends as scores of fans from Arlington Heights, Chicago and surrounding communities – and, in fact, from across the Midwest – traveled to Arlington Park to enjoy leisurely and lively recreation at a beautiful track. I also experienced and came to fully appreciate the challenge of effectively managing a large and complex gaming operation.

Today I speak to you on behalf of investors planning to soon purchase that property, continue its tradition of thoroughbred horse racing, expand its gaming opportunities, and develop portions of the site to better support and serve the needs of the local economy. Simply put, we seek to maximize the potential of Arlington Park's full 326 acres.

We embark on this pursuit with the knowledge that it will be up to Illinois lawmakers to decide whether to revisit the state's gaming law to extend the window for Arlington Park's future owner to apply for a license to add and operate a casino. As we all know, that license was explicitly authorized by the state's 2019 gaming expansion legislation. But Churchill Downs, which had spent two decades lobbying state government for that license, opted, to everyone's disbelief, not to apply for the license and the application window expired.

We are accounting for the possibility of operating Arlington Park without the addition of a casino, but we nonetheless want to ensure there is no artificial restraint on owners, the village or the state in such time that common sense prevails and the legislature acts to allow us to implement the intent of the 2019 gaming law. We respectfully encourage you, as the elected representatives of the Village of Arlington Heights, to retain unfettered control as a home rule community and not permit Churchill Downs to encumber the property in any way. We urge you to adopt the proposed ordinance to prohibit restrictive covenants concerning gaming uses at Arlington Park.

Churchill abandoned its commitment to Arlington Park and the community of Arlington Heights. It should not be allowed to limit in any way the future activities or economic opportunity at that site. Indeed, as was clearly expressed by the terms of the 2019 gaming expansion law, Illinois lawmakers intended for the owner of Arlington Park to expand gaming opportunities at the track; stimulate gaming competition in Illinois; improve the quality of purses that form the wages for thoroughbred trainers, jockeys, blacksmiths, veterinarians and numerous backstretch workers; boost tourism; and grow and diversify the tax revenue base for the local and state governments.

Our team is prepared to do just that. In our judgment, there is no higher or better use of Arlington Park than as a thoroughbred racetrack. Arlington Park is an internationally acclaimed icon of thoroughbred racing; its value to the people of Illinois and, most especially to the people of Chicagoland, can't be overstated. Arlington Park cannot be replaced. The site's potential has long been recognized by the racing industry, by Churchill Downs and by the political leadership of Illinois. And there is no secret as to how to tap that potential: to prosper, Arlington Park must become a diversified entertainment destination.

New ownership can bring new vision and the accountability that the Village of Arlington Heights and the State of Illinois deserve. Our team believes that the owners of a gaming facility such as Arlington Park should be held accountable for their commitments. Horse racing and other forms of gaming are regulated forms of entertainment; a license to operate racing or casino gaming is a privilege, not an entitlement. Such a license is granted by the state and that grant entails respect for the goals established by the legislature. The owner and operator of a treasure such as Arlington Park must act to serve not only investors but also the taxpayers of Illinois.

We believe Arlington Park has the potential to lead the North American thoroughbred horse racing industry with a modernized facility. Should we have the chance to own and operate that magnificent property, we will:

  • Keep the core of Arlington Park the same. We would preserve a world class sporting venue on approximately 126 acres including stables, fan parking, the grandstand, and, of course, the track itself. This would include what is recognized as one of the world's best turf courses.
  • Relocate the stable area in order to open space for a compatible industrial and mixed-use development. This is consistent with the wishes of the community and would broaden the local tax base. The industrial park of roughly 100 acres would be framed by adjacent industrial properties and the Metra line to the north.
  • Develop a year-round entertainment district of about 40 acres that would supplement the summer racing choices for visitors. Select portions of this section would include hotel, retail and condo options.
  • Urge the General Assembly to allow Arlington Park to add casino gaming, realize the venue's full potential, fulfill the intent of the 2019 gaming expansion law, bolster tax revenue and economic opportunity for Arlington Heights, and help generate revenue (as intended by the 2019 gaming expansion law) to support the state's Rebuild Illinois capital construction program.

We have no doubt that Arlington Park, as a track and gaming entertainment destination, can be profitably operated. A smaller footprint for the track would reduce operating costs. Diversifying the entertainment district means more fans and, importantly, new fans. Embracing technology and an affiliated sports wagering platform would bring new revenue to support the track from wider access to the Arlington Park product.

We recognize that comments from Churchill Downs executives and recent media reports suggest that demolition of Arlington Park is inevitable – that we have just now begun the last season of racing at the track. But we firmly reject such fatalism; we know that with the support and partnership of the Village of Arlington Heights, the State of Illinois and the thoroughbred racing community, the future of Arlington Park can be very bright indeed.

Arlington Park can again be a top tier racetrack attracting the world's greatest racing talent and creating new lifetime memories for millions of fans. We come before you with a clear vision for obtaining that objective – and for delivering the benefits of success to the Village of Arlington Heights, surrounding communities, and the State of Illinois. – Roy Arnold

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Arlington Heights Trustees Take Steps That Could Impact Sale of Track

The Arlington Heights Board of Trustees has passed an ordinance that would prevent Churchill Downs from placing any restrictions on what a buyer of Arlington Park can and cannot do with the 326-acre property.

It is feared that Churchill will not sell the track to any individual or group that expresses an interest in opening a casino or even to anyone committed to maintaining racing at the historic Illinois track. Churchill may want to limit competition for the nearby Rivers casino that it co-owns in the town of Des Plaines.

There have been groups aligned with the horsemen that have come forward and said they were prepared to buy Arlington in order to keep it as a racetrack and were set to outbid all others for the property. Those same groups have expressed concerns that Churchill would not be willing to sell to anyone who intended to keep the track operating. The ordinance, which was passed unanimously at Monday night's meeting of the village's Board of Trustees, would prevent Churchill from attaching any conditions to the sale which would rule out a continuation of horse racing.

Throughout the meeting, trustees and other officials with the town made it clear that they would like to see racing at Arlington Park preserved.

“The track is so important to our village for many different reasons, including our identity, that I don't want to see the track go away,” said Trustee John Scaletta. “But it's not up to me. It's up to whoever purchases the property. But I think it's important to keep the door open so that it could possibly remain a track because there are so many people that want to see racing continue, not only in the state of Illinois but across the country. Hopefully, somebody will come to Arlington Heights with a desire to continue horse racing.”

Said Arlington Heights Mayor Tom Hayes: “Everything remains on the table. We are taking these actions this evening to ensure that the possibility of horse racing remains on the table. Nothing is excluded, other than certain uses that we don't want to see.”

In a related development, the board took steps to redefine zoning restrictions for the property that would allow it to keep out certain businesses. The example of Amazon building a distribution center on the site was given as a development the town would block.

The Arlington site is also said to be on the radar of the Chicago Bears, which have been contemplating moving to a new stadium.

Churchill Downs is soliciting bids for the property through the commercial real estate firm CBRE Group, Inc. Bids are due by June 15.

According to Arlington Heights Village Manager Randall Recklaus, the nearby towns of Buffalo Grove, Schaumburg and Chicago have used similar procedures that have kept property owners from placing restrictive covenants limiting future uses for the land.

The problems for Arlington began when Churchill failed to apply for a casino license for the racetrack and then announced that racing would not continue after the end of the 2021 meet. Should Arlington, considered one of the most beautiful racetracks in the world, close, the Chicago area would be left with just one track, Hawthorne. Because Hawthorne is also required to run a harness racing meet, the amount of Thoroughbred racing that can be offered there is limited.

The Arlington meet is scheduled to conclude Sept. 25.

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