Five Questions: Jerry Simms

Jerry Simms has found success in many different businesses. Starting with auto dealerships in Pasadena, Calif., in the 1970s, he’s also been in the banking business and in real estate development. He moved to Phoenix in 1996 and, along with his brother and two associates, purchased Turf Paradise for $53 million in 2000. He currently serves as the track’s chairman.

Developed by Walter Cluer, Turf Paradise opened in 1956 in an empty expanse of desert north of Phoenix that has since been leapfrogged by the sprawling development that has taken place in the Valley of the Sun over the last few decades.

Fewer areas in the country soared with the explosive growth of the ’90s and the ’00s than the Phoenix metro area, and thus, fewer areas felt the brunt of the bursting housing bubble harder than the area has over the last two years.

Despite the growth in population, overall purses at Turf Paradise over the last decade have roughly mirrored the national figures. Simms and company have had to battle to position their product to compete with local franchises from all major league sports, the Cactus League spring training season for Major League Baseball, and several Native American casinos that circle the area.

They must also deal with the fact Arizona is one of the few states where advanced deposit wagering is not legal.

We met with Simms in his office at Turf Paradise over the weekend and asked him five questions:

Advanced Deposit Wagering is one of the few growth areas in horse racing handle today. How are you making do with out it?

“We have such a liberal OTB (off-track betting) system that we haven’t been able to figure out if would be better to have advanced deposit wagering or not.

“There are soon to be 65 OTBs in the state—we’re opening quite a few right now. With ADW, yes, we would get some new people that wouldn’t go to an OTB, but you would take away some of those customers who would go to an OTB and be paying a middleman on that handle. We don’t know the answer. Clearly if we didn’t have the OTB system, it would be a different issue.”

You border New Mexico that has seen a remarkable rise in purses due to revenue from slots. Has that drawn away any of your horsemen?

“New Mexico is probably too far away and it’s a different style of life if you choose to live there. They run a certain amount of Quarter Horse races and races for New Mexico-breds, so I’m not sure our horsemen would be able to go there.”

Like other tracks, you’ve cut stakes purses this season. How are you and your horsemen dealing with that?

“We have a lot of new OTBs that are opening up and that is going to raise our revenue next year considerably. We should be able to raise purses. We’re expecting a nice raise in handle…because of the OTBs, not because of anything on-track.

“Our out-of-state handle is actually up this year 12%. We’re up because of fuller fields. We’re up about a half a horse per race from last year. That’s pretty good in this economy.”

Speaking of the economy, Phoenix rode the wave of the housing and economic boom and has suffered from the popping of the housing bubble. How will that affect your business?

“Our on-track attendance is even. Now, they’re betting a little less and we’ve been hurt by the lack of new OTBs and other ones closing. The OTBs are in sports bars, and due to the economy, certain ones have closed. We don’t own those.

“We have a new horsemen’s contract that we signed Nov. 14 that is going to start the expansion of the OTBs. We’ll get a dozen of them opened pretty quick and I think we’ll grow from there.

“If I had to point to any spot on the map of the United States on where to invest, I would choose Phoenix. I would pick Phoenix because of the location, the weather, and inexpensive housing. I think the demand for Phoenix is going to grow. Through the recession we were one of the hardest hit, but we will lead going on from here.”

The plant is more than 50 years old while all the major sports franchises in town play in relatively new facilities. What has been done, and what can be done, to spruce things up?

“When I bought the track, we re-did the Turf Club and Clubhouse…we haven’t done much to the Grandstand. If you go to the Turf Club and the Clubhouse and go into one of the carrel areas, you’ll see a lot of the work that was done.

“There are a certain amount of people who enjoy horseracing and we’re constantly marketing and educating them and bringing them out and having events. We probably have 75 corporate events a month at the track.”