Maryland Thinking Eminent Domain On Pimlico...?

((HT: NY Times/SBN-Howard Bloom))

With just a month to go before the Preakness Stakes at Pimlico Race Course here, the bankruptcy of the company that owns the track and the race has unleashed a wave of distress among politicians and the public over whether Maryland could lose its cherished second leg of the Triple Crown.

On Monday the General Assembly passed emergency legislation authorizing the state to buy or seize the race course by eminent domain if necessary, declaring the Preakness “a sporting event of historical and cultural importance to the State of Maryland.”

The bill, passed on the last day of the General Assembly’s session, also approved the purchase or seizure of the race’s trophy, the Woodlawn Vase; another track, in Laurel, Maryland; a training center; and all trademarks, copyrights and other intellectual property associated with the Preakness, including the name itself. All are owned by the Magna Entertainment Corporation, a Canadian company that declared bankruptcy in March, and said it expected to sell the property and other assets.

Governor Martin O’Malley, with the backing of legislative leaders and the state attorney general, proposed the legislation last week in an effort to ensure that Pimlico, the Preakness and the economic activity they generate remain in Maryland.

“The centuries-old heritage of horse racing and horse breeding is woven deeply into the cultural fabric of Maryland,” Mr. O’Malley, a Democrat, said in a statement Monday, “and we will take advantage of every available tool to ensure it remains.”

But the tool lawmakers handed him may in fact not be needed, and a similar effort in the 1980s in California failed.

The move to exert state control over Pimlico came after a Maryland developer, Carl Verstandig, who owns several commercial properties in the area, expressed interest in buying and building on the land, but said he did not want to take over the Preakness itself.

The comments led to fears that the race might leave Baltimore, and the governor and other elected officials sought the legislation.

Mr. Verstandig, though, insisted that he had been misunderstood, and that he had never planned to raze Pimlico. He said he wanted only to develop excess land there, and had been talking with companies interested in running the track. Pimlico, like other race courses around the country, is suffering from declining attendance and revenue.

Politicians, Mr. Verstandig said, have been “going off half-cocked into a rampage of political chaos and showboating.”

“I think they’re leaving themselves open for some major, major litigation,” he said. It was not the first time Maryland has moved to prevent a sports enterprise from leaving the state. The General Assembly was too late in passing a similar bill 25 years ago to try to prevent the Colts from moving to Indianapolis. The loss of that football team still galls many in Baltimore.

Oakland, California, failed in its effort to use eminent domain to prevent the football Raiders from moving to Los Angeles in the 1980s, said Matt Mitten, director of the National Sports Law Institute at Marquette University.

When the football Oilers considered leaving Houston, Mr. Mitten said, he cited the Oakland case in advising the city against trying to use eminent domain to keep the team. “It’s a strategy that’s rarely tried, and the times that it was, it was unsuccessful,” he said, although he acknowledged that the Pimlico case differed in some respects.

A spokesman for the Maryland subsidiary of Magna would not comment beyond an earlier statement saying that the actions by Maryland officials “will only lead to more confusion and litigation while these matters are in bankruptcy.”