MEC VP Sees 'Flickers of Light' for Company
Updated: Tuesday, April 12, 2005 4:58 PM
Posted: Tuesday, April 12, 2005 8:11 AM
A top official at Magna Entertainment Corp. acknowledged the racetrack company's substantial debt but said he sees signs of a turnaround, perhaps sometime in 2006.
MEC vice president Dennis Mills, who joined the company in 2004 after 16 years in the Canadian Parliament, said the positive indicators are a soon-to-be-rebuilt Gulfstream Park in Florida; the addition of slot machines at tracks in Florida, Oklahoma, and Pennsylvania; and a spirit of cooperation between MEC and Churchill Downs Inc., the two largest racetrack companies in North America by number of holdings.
Mills discussed MEC and the industry at large on the April 11 edition of "At the Races and Beyond" on WNN-AM in Pompano Beach, Fla., and www.attheracesandbeyond.com. He also spoke about his background and how he came to work for MEC chairman Frank Stronach.
"We're a young company, but we do have about $400 million in debt," Mills said. "The light is not strong, but there are flickers of light coming. We feel when all these things come together, our contribution to the revitalization of the Thoroughbred racing industry will be pretty substantive in about 18 months."
Mills said the rebuilt Gulfstream would be the "Vatican" of racing facilities. "There won't be anything like it on the planet," said Mills, who indicated the project would be completed in about eight months, or in time for the scheduled opening of Gulfstream's 2006 meet.
As for Santa Anita Park, Mills said preservation of the California track's historic aspects must be balanced with the reality of answering to MEC shareholders. Though the redevelopment project at Santa Anita hasn't progressed, Mills said plans remain in the works for retail and residential development on portions of the property.
"In no way will (the development) take away from the historic majesty," Mills said of Santa Anita. "In the long run, this may be more exciting than anything at (the New York Racing Association)."
Mills said MEC isn't in acquisition mode, but the company would consider "participation" in the operation of NYRA racetracks "at the right time and with the right economic formula." Currently, the company needs "positive cash flow" rather than "trophies," he said.
Mills said MEC has some challenges in Oregon, where the company ended its lease of Multnomah Greyhound Park and faces difficulties in the operation of Portland Meadows given the competitive gaming environment. MEC is seeking legislative relief to help turn around the facility.
"We're being very cautious about our commitment there," Mills said. "Obviously, we have a foothold there and hope to expand, but until we get affirmation from other stakeholders, we're not going to put any more money into Portland."
Mills cited a 2004 meeting between MEC officials and CDI president Tom Meeker as the impetus for a working relationship he believes will have a positive impact on the entire pari-mutuel industry. The companies have worked together in Florida and have partnered in a project to streamline the industry's tote system.
As for Stronach, Mills depicted the MEC chairman as a sometimes-misunderstood visionary who loves to generate debate, not controversy. Mills worked for Stronach from 1984-87 before he was elected to Parliament.
Mills, who has a background in marketing and communications, said people laughed at Stronach when he predicted Magna International would become a $1-billion company. He jokingly said he took some heat when he went to work for Stronach.
"People said, 'What are you, crazy? What are you going to work for that kook for?'" Mills said.
Stronach, Mills said, encourages feedback and dialogue, and may be accused of stirring up the pot when in fact he only wants to generate a debate.
"We debate with him on a regular basis," Mills said. "We win the odd one."
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