When the legislature established a slots-funded account to subsidize renovations at Laurel Park, Pimlico Race Course and other tracks, lawmakers empowered the Maryland Racing Commission to protect the state’s investments using a cudgel: The nine-person panel could require track owners to repay grants for late or unfinished projects.
But despite manyy blown deadlines on barns, stalls and other promised improvements, the commission has not recovered any of the $22 million it has given since 2015 to the Stronach Group, which owns the jockey club. Instead, the panel has approved every request for funds with the same refrain, recorded in minutes of the group’s meetings: “Hearing no objection, the Commission unanimously approved this request.”
State lawmakers are beginning to demand answers to what they see as the commission’s lack of oversight of money awarded from Maryland’s Racetrack Facility Renewal Account, known as RFRA.
“Given that these facilities have not been constructed years after RFRA funds were provided (and intended as reimbursement for completed projects), does the Racing Commission intend to require a full refund of those grant funds?” Sen. Bill Ferguson (D-Baltimore City) wrote in a letter last month to the Department of Labor, Licensing and Regulation, which houses the commission.
Ferguson’s letter follows a Baltimore Sun investigation that found the volunteer panel, appointed by the governor’s office, has ignored state law that requires it to award grants from the renovations account only after accepting and approving a capital construction spending plan from the racetrack owner with specific timelines. Late last month, the commission delayed awarding a grant after it acknowledged that millions in subsidies for 2018 should not have been awarded because the panel had not received or approved a spending plan from the jockey club.
Regulators contend that grants between 2015 and 2017 were properly awarded, even though records show the commission never approved a preliminary capital plan submitted by the jockey club in 2013, nor its update in 2014. Both plans budgeted a nearly even split of subsidies between Laurel Park and Pimlico Race Course, but the jockey club instead spent nearly 90 percent of its state subsidies at Laurel. The shift has come as the track owner has pushed to move the storied Preakness Stakes, the second leg of racing’s triple crown, from Baltimore’s Pimlico to Laurel.
Ferguson, who wants Gov. Larry Hogan (R) to order an audit of the commission’s oversight of the account, said the panel should recoup as required by state law all grants “provided unlawfully.”
“What’s most important is that we get the facts of how this program has functioned and whether taxpayers have been well served by this oversight,” Ferguson said in an interview. “Maryland taxpayers should have high expectations for the use of taxpayer dollars.”
Hogan spokesman Mike Ricci said, “We have not yet received a formal request from Senator Ferguson, but when we do, we will take a look.”
Del. Nick J. Mosby, first to raise questions about living conditions for workers at Laurel, said the commission should not have continued to give grants to the jockey club if the company was not delivering on money it had received.
“Where’s the accountability of delivering on what was already advanced to them,” said Mosby (D-Baltimore City). “They were advanced money for something they didn’t complete. So where did the money go?”
State officials said the $1.76 million grant awarded in November 2016 paid for materials to build the three-story structure.
The money was “exclusively for the material, not the build out,” said Michael L. Harrison, a spokesman for the labor department. “The materials have been delivered.”
He defended the time it has taken to get the project moving, saying, “Delays in Anne Arundel County’s permitting processes are well known.”
Tim Ritvo, chief operating officer for Stronach, told the commission in November 2016 that the grant would cover half of the $3.5 million project, construction of “a three story barn that will contain 84 stalls and a number of dorm rooms and offices for individuals who work” on Laurel Park’s backstretch, according to minutes.
“Mr. Ritvo advised that the barn should be completed by next summer,” in 2017, the minutes state.
At the commission’s meeting June 27, Ritvo said delays in the project are being addressed and the work should be finished in the spring.
Mosby is skeptical. “There’s always a different story about how they’re going to get this thing completed, but it never gets completed,” the delegate said.
Anne Arundel County Executive Steuart Pittman said the county wants the jockey club to be successful, but the delays have been frustrating.
“The Stronach Group has changed its plans often,” Pittman said. “Sometimes because of circumstance and sometimes because they want to. It’s hard to predict what comes next.”
Company officials have blamed the delays on issues related to extending water from an Anne Arundel County main and inspectors putting new requirements on the project. The company applied for a permit to build the 81,300-square-foot facility on March 9, 2017, county records show. The Amish-built barn has been delivered in pieces to Laurel Park and features a second floor with 40 new dorm rooms for workers and a third floor with 75 units.
Stronach officials defended living conditions at Laurel Park by saying photographs that Mosby displayed at a news conference in March showed older dorm rooms that provide free housing to workers — not more modern, low-rent apartments in a newer building called Laurel Commons.
Dormitory-style quarters are common at racetracks across the nation, experts say.
Pittman, a Democrat, toured the facility with Mosby in March, and county inspectors quickly issued code violations, which have been corrected.
As for the Amish-built barn, county inspectors said the company fixed several electrical code violations, but there are still outstanding issues, including providing the county with tests of sprinkler heads. In addition, the company needs to obtain a “site development plan” approved by the Anne Arundel County Office of Planning and Zoning.
“I wish that the dorm and the barn had been built long ago,” Pittman said.
The dormitory building isn’t the only project that has been delayed at Laurel.
In October 2018, the Maryland Thoroughbred Horsemen’s Association complained to the commission that work on other barns at Laurel Park that had received state subsidies was two years overdue. The group wanted answers for the delays and timelines from the jockey club .
The commission on May 2, 2016, had approved a $235,565 grant from the state’s renovation account for “Wash Stall Barn #2” and $549,195 for “New Barn #3,” records show. In addition, on Oct. 30, 2017, the commission approved $857,591 to the jockey club for the No. 3 barn.
The association wanted answers because, like the dormitory-barn structure, “little to no progress has been witnessed on those two barns since the summer of 2016,” according to minutes of the commission’s October meeting.
In response, the jockey club told the commission one barn would be completed by Jan. 18 this year and the other by March 20. The Amish-built facility was listed in the Oct. 28 document as “on hold.”
At that same meeting in October, commission Chairman Michael Algeo, a prosecutor and former judge in Montgomery County, said he was requiring the jockey club to provide updates each month on the Laurel Park renovations — not knowing the new year would usher in a fierce political debate over the jockey club’s push to move racing from Pimlico to consolidated operations at Laurel and the Bowie training facility.
The updates delivered more promises. In December and January, jockey club officials said the projects were on schedule. In February, jockey club President Sal Sinatra told the commission that “new barn materials had been delivered” but that the company was “still working out some issues with permitting,” records show.
By March, however, political attention turned to living conditions of horse workers at Laurel. Mosby’s demand for better housing came after The Sun’s investigation showing the jockey club had spent nearly 90 percent of its subsidies on Laurel, far different from the jockey club’s 2013 plan that stated it would spend the money equally on renovations at the two tracks.
At the commission’s June meeting, Ritvo told the panel he was frustrated by the pace of constructing the massive new barn.
“This project has taken much longer than anticipated,” Ritvo said. It “should be completed by the second quarter 2020.”