Churchill Downs Inc. president and chief executive officer Tom Meeker said that in the weeks since Hurricane Katrina devastated CDI-owned Fair Grounds in New Orleans, the company has been working with federal, state, and local governments on a reinvestment plan that could include revamping the historic racetrack into a tourist destination.
Meeker noted the Fair Grounds racing operation and new slot-machine operation was geared toward patrons in the local market, but much of that local market has now been displaced.
"It's important to CDI that the Fair Grounds be given new opportunities to reach the tourism market and or other markets that were not severely damaged by Katrina," Meeker said in a Nov. 8 conference call to discuss CDI third-quarter earnings. "Toward that end, we've been discussing concepts such as developing the Fair Grounds into a destination point, building a permanent location for the Jazz Festival at the Fair Grounds, and expanding the gaming profile of our operations at the track and OTB locations."
Meeker expressed a strong desire for Fair Grounds to remain connected with the renowned Jazz and Heritage Festival, which the track has hosted for 10 years. "It alone produces a significant economic impact for that community and is part of an overall tourism portfolio for New Orleans," he said.
Meeker said all redevelopment concepts being discussed would require legislative action.
"Each of these concepts requires legislative action at either the state or local level, which as we know is always a difficult proposition," Meeker said. "However, given the unique position Fair Grounds occupies within the community, and the expressed willingness of local officials to discuss these concepts, we're looking ahead with a degree of optimism that clearly did not exist the day the waters started to rise."
Meeker also said reinvestment would rest on having a qualified workforce and the availability of adequate insurance. With initial concerns aside, he said CDI is confident in having both.
"Today local businesses are having a difficult time locating employees," Meeker said. "To that effort, we've made extraordinary efforts to locate our employees provide them with pay and financial assistance necessary to cope with the disaster. That effort has paid off as we opened five (of 11) old OTBs in the area not directly affected by the storm, putting some 100 members of our Louisiana team back to work."
Meeker said it has been indicated to him there would be adequate and economical insurance available from both traditional carriers or through a federally sponsored insurance program.
CDI chief financial officer Mike Miller said a highlight of CDI operating performance for the third quarter was the strength of its video poker business in Louisiana. Since the acquisition last year, 40% of old video poker machines have been replaced by new machines, with an investment of $3.6 million.
Miller said the five reopened OTB parlors are seeing "very brisk business," and the new machines have been successful.
"For those new machines, we've seen a net win in some instances double that of historic averages," Miller said.
Overall, Meeker remained very optimistic about the future of Fair Grounds.
"Without resort to hyperbole, I firmly believe there is a great opportunity in New Orleans as the community is rebuilt," Meeker said. "There is no doubt that it is a daunting task and one that will require time, but in the end there will be a new and broader operation that benefits the company as well as the community."