General Assembly Journal 2009 – Volume 11
A race worth saving? No, this is not some deep philosophical question about the future of mankind. The race is the Preakness, and the question relates more to the last minute effort to avoid a potential bankruptcy sale.
Let me start by saying that no thoughtful legislator in their right mind would want to be the vote that let the Preakness sprint from Maryland to another state. In addition to the double digit millions in race day dollars that flow to Maryland wallets, many people consider that the loss of the Preakness would be the final nail in the equine industry coffin.
The delay in bringing in slot machines as a way to enhance race purses and help sustain the horse racing industry has already fueled an out-migration of horse breeders, trainers, veterinarians, and related businesses.
One could argue that if the Ehrlich Administration had been able to get a slots bill passed in 2004 or 2005, not only would we have sufficient revenue to operate government through the fiscal downturn, the purse enhancement fund could be keeping the industry from the verge of collapse.
The bill being rammed through the General Assembly, with the explicit support of the O’Malley Administration and the two legislative presiding officers, would provide for hundreds of millions to be raised by selling revenue bonds issued through the Maryland Economic Development Corporation (MEDCO). Projects like Rocky Gap are examples; and, as an example, Rocky Gap exposes the weakness in this strategy.
MEDCO was created as a quasi-independent entity for the purpose of issuing these bonds and financing new infrastructure projects not suited for state agency direct funding requests. Rocky Gap would never have been built were it not for MEDCO revenue bonds. No private financing entity would have accepted the risk, and time has substantiated those underwriters’ fears. Rocky Gap has never turned a profit, reliant on an annual infusion of taxpayer cash to keep the doors open.
Using MEDCO revenue bonds to raise the money to purchase Magna Entertainment’s interests in Pimlico and Laurel Park raises double the number of questions it answers! Magna, as you know, has filed for Chapter 11 bankruptcy protection.
First, would the federal bankruptcy court even acknowledge the State of Maryland’s interest in an eminent domain proceeding? Assuming we could raise the money (we’ll consider that in a moment), an eminent domain proceeding may not have standing in the eyes of the court. The whole strategy of this emergency bill is built on the State of Maryland bidding to acquire those two racing venues, and also acquiring the “intellectual property” associated with the Preakness Stakes race.
The advocates of the emergency bill hope that once the state asserts its right to acquire both the tracks and the race identity, they could find a buyer willing to buy these interests, paying down the revenue bonds and committing to keep the Preakness Stakes in Maryland.
Under questioning by legislators, MEDCO Executive Director Bob Brennan had this response when asked about the likelihood of finding investors interested in these bonds: “(it) could be very difficult. ... Hopefully, there would be investors interested."
Sort of a problem, isn’t it? We’re going to ram through a bill to allow the state to “take” two racetracks and the name and identity of one of the jewels in the Triple Crown, and we don’t know if the courts will recognize that right; we don’t know if we’ll find investors to buy the bonds to purchase the interests; and we have no idea if we’ll be able to find a buyer once we’ve obtained these interests.
If this weren’t so serious, you might think this was the premise for a comedy or a ponzi scheme!
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On a sad note, this past week in the General Assembly brought a terrible tragedy to one of my favorite members. Del. LeRoy Myers (R., Allegheny/Washington) lost his beloved son Ryan in a traffic accident on Thursday evening. We were on the floor in a second session when LeRoy was notified that his son was involved in a fatal accident. State troopers assisted in getting Leroy home, and Del. Andrew Serafini (R, Washington) accompanied LeRoy home to deal with the myriad family logistics.
LeRoy is a special guy. He is well-liked by all members, staff, and lobbyists. I’ve grown particularly fond of LeRoy; he and I share a distaste for being told how to vote by people who don’t see the world the way we do.
LeRoy and Ryan were as close as any father and son, and most likely closer than most. Ryan was learning the building trade from his Dad, and LeRoy simply glowed with pride when discussing his son’s growth and maturity.
Ryan seems to have reciprocated those deep feelings. On his Facebook account, Ryan saw fit to define his personal hero very simply. In the box entitled My Hero, Ryan simply wrote: Dad.
I can think of no more fitting farewell, and I pray for LeRoy and his family to find peace in their grief, and comfort in the idea that Ryan lived his young life fully cognizant of his own personal hero: Dad.