Fix Pimlico and Preakness, shutdown Laurel Racetrack

In a horse race between Pimlico and Laurel, the "experts" and bean counters say Laurel is a much better racetrack and location than Pimlico. It has a larger market area, better access and it's in better condition. They even tout better parking as a selling point.

But it's still bad economics to close down Pimlico and move the Preakness to Laurel. Port Covington and Pigtown were previously promoted as better racetrack locations than Pimlico too, but that didn't mean we should build a new racetrack there either.

Three basic economic points should dictate the future of Pimlico Race Course:

   1. Horse racing is not now, nor is ever again likely to be, a major economic engine for growth in the city or state.
   2. The basic economic value of the Laurel Park racetrack site for virtually any kind of redevelopment is higher than Pimlico.
   3. Both the Pimlico and Laurel need to be redeveloped to serve as full-time economic generators 365 days a year, not just during the limited and sporadic racing seasons.

Pimlico Racetrack at Northern Parkway and Park Heights Avenue.
The Mount Washington and Park Heights neighborhoods are respectively to the north and south.

Talk of putting a new racetrack at Port Covington only came grinding to a halt when Under Armour came along and devised a multi-billion dollar plan for their corporate headquarters along with a major high density surrounding urban development. The same things that made Port Covington a good racetrack site - accessibility, visibility, market area, etc. - made it a far far better location for something much more valuable.

That's a law of economics. It's not just about value. It's about comparative value.

The same thing applies to Laurel. Its location halfway between Baltimore and Washington, with its own MARC rail station, has far more potential economic value than what it could ever return for horse racing, which has already pretty much reached its peak. Relative to its economic potential, Laurel needs a new land use and development plan just as much as Pimlico does.

The main difference is that major redevelopments in Baltimore must be catalysts for uplifting their surrounding areas, whereas Laurel is surrounded by the dynamic Washington metropolitan area where new development only needs to fit in and complement what is already there.

The fact that we're talking about Laurel versus Pimlico, one or the other, says that we're obviously not talking about horse racing as a burgeoning industry. However, it is still a highly visible and iconic industry.

Laurel simply doesn't need high visibility, but Pimlico and Baltimore does.

Even the warm and fuzzy "emotional" factors aren't so fuzzy when translated into economics. The annual Preakness "Triple Crown" race draws 135,000 people, and Laurel would be incapable of physically accommodating that many because it does not have a usable "infield" area inside the track. More importantly, the long storied tradition of this "Triple Crown" event isn't just emotion, it's everything. If we lose that tradition, we lose everything. It can't be remade from scratch.

The Preakness is very important to the state and city's marketing image, which is where the real value is.

So here is the agenda:

The Maryland Stadium Authority has just completed its Phase One Study of Pimlico, which concluded that a major racetrack makeover will cost approximately $300 Million. That's very reasonable in terms of recent price tags for major modern sports facilities, but it is far too much for a part-time venue that's only fully utilized once a year. The most important outcome of the study is that it appears that all involved parties want to proceed with a follow-up Phase Two.

So here is the way to proceed from here:

1. Create a comprehensive redevelopment plan for the entire Pimlico site, in which the renovated racetrack serves as an anchor motif, but which also includes other uses which can feed off the horse theme and create full-time year-around economic activity. The marketing theme is simply that people love horses and their unique traditions, and that can be a major attraction for year-around uses.

2. Then prepare an assessment of the value of redeveloping Laurel as well, based on closing down the racetrack and starting over with a clean sheet on a very valuable site.

3. Then begin partnership negotiations between the state and local governments on the one side and Stronach Group, which owns both race tracks, on the other. Negotiations that include both sites will provide more leeway than treating the two sites in isolation. A pot sweetener at one location may facilitate concessions at the other. It is beside the point that more money can be made from horse racing at Laurel. The overall bottom line for all uses on both sites is the key.

4. Include Timonium racetrack and fairgrounds in the discussion. Timonium is another valuable underutilized site with an obsolete racetrack, served by light rail and surrounded by very active suburban development. Perhaps Pimlico can be made into an exposition center and the Maryland State Fair can be moved there from nearby Timonium.

Stronach will contend that Laurel is the best home for racing because it requires the least investment on their part, creating the lowest priced baseline for their investment. This sets up the state as the investor that would spend the lion's share. Investors like to use other people's money.

The state needs to resist this position as much as possible, because private sector investors including Stronach would stand to gain the most from a maximum investment in redeveloping Laurel.

Here's a major precedent: Sites for a new Yankee Stadium were being considered in New York. The primary options were The Bronx, adjacent to the existing stadium, and Manhattan's west side. Manhattan had all the economic advantages, but The Bronx was ultimately the better choice. So the Bronx Bombers stayed in The Bronx right across the street from legendary old Yankee Stadium. And now the west side of Manhattan is prospering even more, with billions in new investment from the High Line to Hudson Yards to Hell's Kitchen. Of course, Laurel isn't Manhattan, but the point is the same. Laurel is at the intersection of four of the most affluent counties in the country: HoCo, MoCo, PG (#1 for AfrAms) and AA.

One could also think of horses as basically being Maryland's version of China's pandas. Nobody would ever suggest that pandas could or should become a major part of China's overall economic output, but they are a potent symbol for Chinese tradition and culture.

The same goes for horse racing at Pimlico. It's not fuzzy, vague or outmoded. Horse racing at Pimlico is simply a solid theme to build upon which adds real economic value.