Monday, September 25, 2006

Dixon Racetrack Issue has Council Saddling Up

Dixon Racetrack Issue has Council Saddling Up
By Debbie Arrington - Bee Staff Writer
Published 12:00 am PDT Saturday, September 23, 2006

In a sport known for long shots and improbable outcomes, Dixon Downs could be in the right place at the right moment.

Magna Entertainment Corp., the No. 1 racetrack company in North America, wants to plunge $250 million into this farm town of 17,500 in the Sacramento Valley to build a state-of-the-art facility -- the first new major racetrack in California in six decades.

Wednesday, its Dixon Downs proposal finally will reach the City Council as the elected officials hear testimony on the track's copious final environmental impact report and development agreement. A council vote is expected next month.

Magna is gambling on a horse-racing renaissance. At stake is the sport's future, say company officials and industry experts.

"It's not just one racetrack in this state, but the whole country," said Lorne Kumer, Magna's vice president for development who has worked on the project almost six years. "We want to reinvigorate the sport. Everything we've done, we've done for horse racing. We've been saying that since Day One."

But opposition has targeted casino gambling as the major issue. Last year, a citizens group gathered about 2,000 form protest letters, citing the potential for slot machines.

Called Dixon Citizens for Quality Growth, the group sees the track as "Las Vegas-style gambling and entertainment." Its Web site (www.dumpthe- is filled with anti-casino messages and portrays Dixon Downs as a Trojan horse for slot machines.

"The only way to be sure there won't be slot machines in Dixon is to not have the racetrack," opposition leader Gail Preston said.

Responded Kumer, "We are not building a casino. This is not about slots. If we wanted slot machines in Dixon we would have to go through this whole approval process again, and we don't want to do that."

Even if the Legislature were to legalize slot machines at non-Indian casinos in California, Kumer said, a provision in the development agreement prohibits slots at Dixon Downs without voter approval.

With aging facilities and a graying fan base, horse racing has battled an image as a dying sport. But the centuries-old pastime could be poised to become the new poker -- an old game with a new audience and hip status.

Nationally, wagering on horse racing is up 3.5 percent from a year ago to $15 billion annually, according to the National Thoroughbred Racing Association. Purse money tops $1 billion. TV ratings for major races have increased steadily.

The breeding market also reports growth. This month's 10-day Keeneland auction of yearlings brought in a record $385 million in sales.

The Dixon Downs plan features a one-mile main oval, one-mile inner-turf course and a grandstand pavilion that doubles as an entertainment center. The barn area could hold 1,440 horses. Forming a gateway to the track would be a nearly 1 million-square-foot upscale commercial complex anchored by a hotel/conference center.

Magna founder Frank Stronach shocked city officials when he pinpointed Dixon as the site for a dream track six years ago. But its primary asset hasn't changed: Great location at an affordable price.

Pancake-flat and wide open, the 260-acre site adjacent to Interstate 80 at Pedrick Road is 20 minutes from Sacramento's growing population center and a half-hour from the Bay Area. Albany's Golden Gate Fields, which Magna owns, is 45 minutes away. A track here could tap into two markets while serving as a training hub for Northern California racehorses and spurring the local breeding industry.

Another plus: the University of California, Davis, with the best equine health program this side of Kentucky, is just a few miles away.

"Obviously, it would be an asset to our research to have a racetrack and training facility so close," said Dr. Gregory Ferraro, director of UCD's Center for Equine Health.

If approved by the council, Dixon Downs would face more hurdles, including a possible voter referendum. The facility must be licensed by the California Horse Racing Board and have dates approved. Optimistically, the track could hold its inaugural meet in 2010.

The Austrian-born Stronach refused to walk away from the bargaining table despite repeated and expensive delays. Three years after its first forays in Dixon, Magna filed its city application for development 3 1/2 years ago and picked up a seven-figure tab for consultants hired by the city. In the proposed agreement, Stronach's company made several unusual and costly concessions such as freeway improvements and building $25 million in infrastructure while asking for no public money.

In return, the city of Dixon would receive a guaranteed annual revenue stream of at least $3 million -- and potentially much more -- once the complex is completed.

Timing is ripe for a new track. The $6 billion California thoroughbred industry faces the loss of two major race tracks -- Bay Meadows and Hollywood Park -- to redevelopment in the next three years.

"It would be a tremendous blow to California for the racing industry to disappear," racing board chairman Richard Shapiro said. "Many, many people are dependent on it for jobs. We need to do something."

Someone will fill that gap. But who and where?

Stronach's interest is personal. Owner of more than 1,000 thoroughbreds, Stronach ranks as North America's largest racehorse owner and breeder. Magna bought its first racetrack (Santa Anita) in 1998 and now owns 11 tracks nationwide plus a cable network, Horse Racing TV. Its XpressBet wagering service allows fans to bet from home.

But new fans are made on a track, Stronach said.

Just as other big-league sports have used new arenas and stadiums to reinvigorate interest and attendance, California racing needs a new track for its future health, industry experts say.

Compared with NBA arenas or baseball parks with similar price tags, the difference with Dixon Downs is its developer is willing to build the facility without public funding.

Reimbursing the city of Dixon for consultants and other study costs, Magna has spent more on the entitlement process ($7 million-plus) than it did on the property ($6.3 million).

"To their credit, they've been incredibly patient," said former Dixon Mayor Don Erickson, now a local Magna consultant. "They've really tried to do everything right."

Following the Las Vegas model, Stronach pictures Dixon Downs as a family-friendly package of diversions with a shopping-entertainment complex complementing a racetrack/training center that can double as a concert venue with upscale restaurants. The gateway commercial complex acts as a carrot to draw new fans to the ponies.

Using that same concept, Magna spent $130 million to renovate its Gulfstream Park near Ft. Lauderdale, Fla.

It's a revamped packaging approach that worked for one Vegas staple -- poker.

"Poker really took off and it's been around almost as long as racing," said state racing board commissioner John Harris, a leading California horse owner and breeder. "Our sport could get this sudden resurgence, too. It provides some hope for racing."

Slot machines have spurred racing's growth in other states. "Racinos" -- racetracks with slots, video lottery terminals or similar gaming -- have pumped millions into purse money. They have lured horses away from California.

Magna introduced slot machines at Oklahoma's Remington Park and plans to add them to its racetracks in Maryland and Florida, where such gambling has been legalized.

Racino competition brought an ultimatum from Bay Meadows Land Company, which owns Bay Meadows in San Mateo and recently purchased Hollywood Park from Churchill Downs Inc. for $260 million. BMLC officials vowed they would close Hollywood Park after the 2008 season if not granted slot machines.

Despite local protests, the San Mateo City Council recently approved the remaining 80 acres at 62-year-old Bay Meadows for redevelopment. The property, worth an estimated $2 million an acre, has been deemed too valuable to remain a semi-agricultural use such as horse racing.

In some ways, the new Downs would restore a sporting tradition to Dixon, which had its own racetrack until shortly after World War II. Horse racing dates back to the 1870s in the town and many horse farms still dot the area.

"In a lot of ways, we're coming full circle," Kumer said. "We're bringing horse racing back to Dixon."

About the writer:
The Bee's Debbie Arrington can be reached at (916) 326-5514 or

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