Sources: Deal could bring Colonial Downs back to life

by | Oct 11, 2017 | Breaking, Business, Top Stories, Virginia, Virginia Business | 3 comments

Colonial starting gate. Photo by Laurie Asseo.

by Nick Hahn

A deal in the works could return live Thoroughbred racing to Virginia’s Colonial Downs racetrack. Sources have told The Racing Biz that at least two suitors for the track, both with substantial experience in the racing industry, have held discussions with Jacobs Entertainment, which owns Colonial, about purchasing the mothballed facility.

A senior representative of Colonial Downs declined to comment.

It appears that no contract has been finalized, but the asking price for the New Kent track reportedly has dropped from perhaps as much as $50 million to $20 million, according to one source. Cushman and Wakefield/Thalheimer have represented the owner on the sale of the off-track betting facilities that Colonial Downs formerly owned throughout the state.

Any deal would need support from numerous parties, including the state Racing Commission, New Kent County government, and the state’s horsemen; and there’s clearly still work to do on that front.

“The owner of Colonial hasn’t shared anything with us,” replied Rodney Hathaway, the County Administrator for New Kent County. “We would be excited about the prospects of Colonial reopening.”

Frank Petramalo, executive director of the Virginia Horsemen’s Benevolent and Protective Association (HBPA), said that he was very much aware of the conversations taking place.

“I have talked to a prospective buyer that approached us about our interest in working on an agreement and bringing racing back to Virginia and told him that we’d be very interested,” he said.

The New Kent track has been mothballed since 2014 at the conclusion of the harness meet, with the gates chained and little visibility of the facility. It fell victim to a dispute between Jacobs, Colonial’s owner, and the state’s horsemen, which flared up following the 2013 Thoroughbred meeting there, the most recent Thoroughbred meeting held at Colonial. That dispute centered on the number of racing days to be held at Colonial.

In the aftermath of the shutdown, new legislation led to the formation of the Virginia Equine Alliance, a partnership of the HBPA; the Virginia Thoroughbred Association, which represents Thoroughbred breeders; the Virginia Harness Horse Association; and the Virginia Gold Cup Association representing jump interests.

The VEA has been seeking locations around the state to offer “country racing,” that is, racing without a significant grandstand. Many of the sites the organization has considered are located closer to Northern Virginia, among them Powhatan Plantation in King Edward County near Fredericksburg and the Middleburg training center.

Its most promising effort, to host racing at Morven Park near Leesburg, did not come to fruition in 2015 because of water constraints and a number of conflicting activities on the grounds.

Currently there are two off-track betting centers operating in Richmond, VA, and a third, in Chesapeake, has received local approval and is expected to open shortly. Off-track betting centers could also open elsewhere in the Tidewater region, in Henry County near Martinsville, and in the town of Vinton near Roanoke, localities where Colonial Downs previously operated OTBs.

Under a recently revised Virginia law, the VEA was licensed to open OTBs where local referenda had been passed, yet the licensing of a new operator may supplant that role in future. That is, once licensed a new track operator would be entitled to open OTBs instead of the VEA, which would still retain ownership of those OTBs it had already opened.

In addition to its efforts to return live flat racing to Virginia – which to date have also included a small number of races run at Great Meadow in The Plains, as well as Virginia-bred races at Laurel Park in Maryland and elsewhere – the VEA has conducted a harness meet at Shenandoah Downs at Woodstock, Virginia just off Interstate I-81. The pari-mutuel meet, which concludes October 15, has enjoyed a nice reception and appears likely to remain a fixture going forward, particularly since it represents a cost savings versus converting and reconverting the Colonial dirt track surface.  Although just recently licensed and now offering pari-mutuel racing, harness racing has been offered for numerous decades as part of the Shenandoah County Fair.

Beyond finalizing a deal with Jacobs and gaining support from relevant in-state entities, any new prospective owner of Colonial Downs would likely also have to craft a deal with the Maryland Jockey Club, which may prove trickier now than it once was. Under the previous arrangement, racing went dark in Maryland when Colonial went live.

The agreement left several Maryland Jockey Club employees and Maryland-oriented contractors without racing in 2014, the first year that Colonial didn’t offer racing since the track’s opening in 1997. The situation in Maryland has changed substantially since 2013; the Maryland Jockey Club now offers live racing on virtually a year-round basis and has been expanding its racing footprint.