The parent company of Magna Entertainment Corp. disclosed March 10 it does not intend to keep on a long-term basis the racing assets upon which it is bidding in MEC’s Chapter 11 bankruptcy reorganization. Included in the disclosure is the company’s “immediate” intention of redeveloping Golden Gate Fields into a commercial property if the bid is successful.
MI Developments, which is the controlling shareholder in MEC, said in a filing with the Securities and Exchange Commission that if it is successful in acquiring the properties it is seeking in a $195-million “stalking horse bid,” those assets by the end of 2011 will be either sold, spun-off to its shareholders, or closed for other development.
Racing assets included in the bid from MID, which can be topped by a third-party entity in a court auction, are Golden Gate Fields, Gulfstream Park, and Lone Star Park, as well as well as totalizator company AmTote International and advance deposit wagering entity XpressBet.com, among others.
In separate SEC filings that detailed Frank Stronach’s stock holdings as chairman in both MID and MEC, it was disclosed that if the stalking horse bid is successful, the racing assets would be “segregated” into one or more new wholly-owned subsidiaries generically called “Raceco.”
If the assets are profitable or self-sustaining by the end of 2011, Raceco will either sell or spin-off the assets to MID shareholders; but if they are not profitable, the company intends to “cease racing and gaming operations … and either sell or develop all of Raceco’s remaining assets.”
Further, MID said it would “immediately” pursue commercial rezoning for Golden Gate Fields, and would cease racing at the Albany, Calif., track “prior to commencement of construction on the rezoned property.” Were Golden Gate to close, it would leave Northern California without a large racing complex, following on the heels the 2008 shuttering of historic Bay Meadows.
MEC owns the assets of Lone Star Park, but not the 285-acre property upon which it sits, according to SEC filings. The company has a lease for the property through 2027 with the city of Grand Prairie, Texas, where the track is located.
It was previously disclosed that other properties in the MEC fold would be marketed separately, including, in part, Santa Anita Park, The Maryland Jockey Club (which includes Pimlico Race Course and Laurel Park), Remington Park, Thistledown, and Portland Meadows.
MEC filed for bankruptcy March 5 in a federal court in Delaware, where the company is incorporated in the United States.