Churchill Downs and labor union leaders reached a deal July 13 that will allow the racetrack to receive $7.5 million in tax breaks and help finance a major renovation project.Both sides had deadlocked the day before on issues related to the percentage of union workers to be hired and the use of minority and small businesses. The city of Louisville's board of alderman had said they would not approve the tax-breaks unless Churchill Downs and the unions had an agreement.Churchill Downs did agree to pay a state-set prevailing wage to workers on proposed $100 million grandstand renovation and expansion project. The track would not agree to hire only union workers or require non-union workers to pay union dues."We have agreed to use 90% union contractors with no restrictions on the remainder," said Mike Miller, Churchill Downs' senior vice president of finance. "That will allow us more flexibility in who we hire."Churchill Downs' board of directors is expected to approve phase two of the renovation project during its regular meeting in mid-September. What it approves, however, may be slightly smaller than what was initially envisioned. So far, the track has secured only half of the public assistance it required. "I would expect to see the project scaled-back," Miller said.If the board approves the project, Miller said the project could still be completed by the end of 2004.Churchill Downs has already started a $27-million renovation that includes adding 66 corporate suites and improving the Jockey Club and grandstand. Phase two will include more luxury suites, track lighting, and a new simulcast parlor.