Golden Gate Fields owner files Chapter 11, plans sale
Golden Gate Fields race track, one of the biggest businesses in Albany, is facing an uncertain future as its owner filed bankruptcy papers last week. Photo by Linjun Fan. Article by Barbara Grady.
The owner of the Golden Gate Fields race track filed for Chapter 11 Bankruptcy protection on Thursday and indicated in its court document that it hopes to sell the Albany race track.
Magna Entertainment Corp.’s Chapter 11 petition submitted to U.S. Bankruptcy Court for the District of Delaware said it hopes to sell a number of assets, including the Golden Gate Fields, Gulf Stream Park in Florida, Lone Star Park in Texas and other parks and that it has a potential buyer for these properties.
“An offer is on the table,” said Robert Hartman, general manager of Golden Gate Fields.
Magna has entered a tentative sales deal with its largest creditor and shareholder MI Developments Inc. to buy those assets at an offering price of $195 million. But terms of the deal allow competing bids to be considered.
Meanwhile, it will be “business as usual” at the race track while the negotiations and debt restructuring unfolds, Hartman said, with horse races continuing as scheduled and employees and winners getting paid.
The deal with MI includes a loan to Magna to fund day-to-day operations while it reorganizes.
Magna listed assets of $1.05 billion and debts of $959 million in its court filing.
“Simply put, MEC has far too much debt and interest expense,” said its chairman Frank Stronach in a statement. He added that the severe economic downturn has further hurt business. The Ontario, Canada-based company said it will ask the Canadian Superior Court of Justice to recognize its U.S. Bankruptcy Court proceedings.
In Albany, the future of Golden Gate Fields and particularly the waterfront land it controls has been a topic of heated debate for years. The City did not agree to zoning changes sought by a developer that would have allowed developing a retail and lodging complex on the property and instead began an envisioning process on how the city could preserve open park space there while still getting some revenue from limited development.
Hartman said that Golden Gate Fields “is a profitable enterprise” that operates in the black. During the Chapter 11 proceedings it will continue to pay taxes to the City of Albany, he said, as well as employees’ salaries and betters’ winnings. A $62.5 million loan from MI will help assure this continuity.
Chapter 11 of the U.S. Bankruptcy Code allows a petitioning company to reorganize and restructure its debt with court protection from creditor demands until the company completes its reorganization. Companies in Chapter 11 usually remain in business.
In the current edition of Berkeley Daily Planet, Richard Brenneman on page three reports that the $195MM so-called “stalking horse bid” is not for GGF alone, but for: three race tracks (GGF, Pimlico, and Lone Star), as well as Magna’s odd-processing firm, a betting service and other real estate.
By simple division, that would seem to put the amount of the “bid” for GGF at something like half of the $80+ MM that Magna paid Ladbroke for GGF a decade ago.
Racing is in sad shape and there aren’t many visionaries stepping up with sensible ideas to save our wonderful sport. Forget about its heyday, people flooded to the racetrack in the old days because they wanted to see great horses compete against each other and because if you wanted to make a bet, you had no choice but to go to the racetrack. Today it’s much different. The good horses rarely race after age four unless they are geldings, and trainers don’t like their horses to carry weight. Track management was blind to the tremendous opportunities the Internet could bring to racing. They blew it! And now, they’re playing catch up, but they’ve fallen too far behind. The economic crisis made it worse for sure, but racing’s leaders dropped the ball way before the Wall Street disaster.