26 January 2009

Deadline Extended By ORC On Fort Erie's Fate; Horsemen Hung Out To Dry


The ORC has extended Fort Erie's licence to the end of March, making today's drop dead date null and void. Nordic has until mid March to announce whether racing is a a go or not.

The government needs more to time to assess the proposal set forth by the Fort Erie EDTC.

Concerns about the proposed slots deal where Fort Erie lends 200 machines to Woodbine has been mentioned as a cause for delay. Well d'uh. First off, the EDTC wants to dictate that the machines would be theirs, and that they would get more than the amount every track in Ontario gets on slots (they are proposing 33% for each the OLG, Woodbine, and Fort Erie). If it was that easy, why not let Nordic lend the machines to Woodbine under that proposed agreement? That would take care of Nordic's supposed $3.2 million yearly deficit. And tax payers wouldn't have to dole out $35 million for a losing business on land that was assessed at $21 million, that would be worth maybe $7 million in a fire sale.

I don't see much of a difference having Nordic still own the place or the EDTC, who have the audacity to overprice the track tremendously to meet Nordic's extortion demands. I could just see how quickly they could deteriorate the situation if they were in charge, or had anything to do with hiring the "new" people in charge.

The horsemen are rightfully upset, as they have no clue what to do or where to go with their horses. The season is scheduled to begin the first week of May, and they need the track open for training by the middle of March. But that is only part of the problem because they have to apply for stalls elsewhere and contemplate selling their homes and/or moving. It is ugly.

Again, the only real solution for 2009 would be the OLG giving Fort Erie a special deal of 35% of slot profits for both the horsemen and Nordic.

It doesn't appear Woodbine is interested in buying Fort Erie, and it isn't likely that Nordic will sell the price for a fair price (much lower than $35 million).

Creatively, if the government were to get involved, they could back a deal where they hire a turnaround management company (with no risk to the turnaround company) to lease the track for 3-5 years from Nordic for a dollar. The government would be responsible to pay the turnaround company and be responsible for any losses incurred by the operations (keep in mind, the government could rationalize that they are doing their best to make the business profitable). This might be able to get around the government loophole where they say they can't control losses, so they can't guarantee the track breaks even. In the meantime, Nordic can look for someone to buy the track that they obviously don't want to run anymore.



UPDATE FROM ONTARIO HBPA:
ATTENTION FORT ERIE HORSEMEN

Any person wishing to convey their personal situation or feeling regarding the Fort Erie Racetrack Situation should put it in writing and then call Cara Lee at 905-871-1332.

She will make arrangements to get it to the proper authority.

Thanks,

Sue Leslie


See also Perry Lefko's article on the extension.

Niagara Falls Review story.

Another article by Lefko, this time in the Star.



Just a reminder. Go to the HANA blog and check out the top bettor friendly race tracks in North America. The countdown from 20 to number one has begun.

9 comments:

Anonymous said...

Woodbine has touted its polytrack surface as the be all and end all.

If true, Woodbine should be able to race 7 days a week, and thus accomodate all FE runners.

Then Woodbine races would have full fields of 12-14 horses, and at 7 days a week, betting would just explode.

An added benefit to this scenario, is that NORDIC would be left holding a worthless property. That would be fitting punishment for their behaviour thus far in operating the track.

Cangamble said...

I don't think the Woodbine backstretch can accommodate the extra horses. And it gets to be expensive and difficult to be competitive if forced to train off a farm versus the track, at least for most outfits and horses.

I do agree, that maybe the best thing for Fort Erie's future may be a closure for 2009. Nordic will be sitting on a near worthless property (assuming the slots have to close) while paying property taxes, and the uncertainty that racing will ever happen again, will also devalue Nordic's sale price. Industry (especially retail) in Fort Erie will also go down the tubes, and real estate prices will drop drastically.


But inevitably it will cause Nordic to desperately be looking to sell, and then and only then will it be feasible for a buyer to come in and pay an actual market price.

Anonymous said...

I'm usually right on spot with you, however, this time I must disagree with letting the closure of the Fort Erie track happen. If it is allowed to close- what will happen to the town businesses,the home values etc, I think it will just be a snowball effect. Not to mention, once we let it go, it will be near impossible to get it back!
I believe Nordic has every ability to sit on vacant property indefinitely, and should any potential buyer come along they will still demand over market value at that time. You know its not worth anything until someone wants it!
As vacant property Nordic will simply apply to have the present taxes adjusted downward for vacant property-(a drastic difference from current taxes).
I believe for every business,and homeowner in Fort Erie we need the continuance of racing. The plummet of businesses,school closures, essential services will make this town a ghost town in less than 2 years. Its on its way to that now, and this will just put the last nail in the coffin.

Cangamble said...

I've said that is would have a horrible effect on property taxes and businesses and the local economy if Fort Erie were to close. I agree. But Nordic will keep extorting money every year if they are not stopped.
I remember the 2004 shortened season, and though the purses were still on the high side, the temporary affect on horsemen was terrible, and on a side note, the HBPA did little to help the situation.
The could have paid 90,000 to keep the track open for training, but chose not to. I don't have faith in them. They can't even get the government to change the laws regarding how much an owner can write off in a year.
This is an unfortunate situation. And I don't see the EDTC as being the answer either.
The government is needed to bail out the track by giving it a special deal on slots. Nordic can then use that to justify selling the place to a buyer, if there is one.

Anonymous said...

We agree the closure of Fort Erie racing will have catastrophic results for the town. We further agree that Nordic must be shut down to rid ourselves of the continuous extortion tactics we have had to deal with for too many years!
We absolutely need the government to help here, and they cannot use the same old gaming model they have had in place as their reference today for their level of assistance. They need new standards which will reflect the current times, economy, and current problems in this industry as in many industries.
I'm not positive that EDTC is the answer, however, they are the only ones that tabled a long term plan and they presently have the government working with them for a solution to remove the present ownership. I didn't hear of the HPBA or Woodbine Entertainment sitting at the table with a better or alternate plan.
I'm hoping with some tweaking of the proposed plan and some "government awareness" of our times vrs. the times of 10 years ago they will as you suggest come up with a special(Stimulus)
plan for the slots!
I really think they should get their heads out to of the sand (or wherever they have had their heads!)and help come up with a workable solution of assistance.

Anonymous said...

What happenend to the good old word EXPROPRIATION (to take anothers property esp for public use .Havent Nordic expropriated the lives of the people of Fort Erie

Anonymous said...

I heard Woodbine had some incredible number of stall applications this year (almost double what they actually have the capacity for).

If Fort Erie isn't going to open for racing, what if it was "rented" as a training centre?
When s-breds are out at Mohawk that big new paddock on the clubhouse turn is empty - so Woodbine could provide their own shipping vans to bring horses in from Fort Erie a day or 2 before they are slated to race at Woodbine - put them in the s-bred paddock and suddenly you have 12 and 14 horse fields for 10 races a day 5 days a week (perhaps 6 if Woodbine found they needed an extra day to fill out all of the entries).

Granted not all current employees of Fort Erie would still have jobs, but some would still be needed to run that backstretch/workouts in the morning etc. - and hopefully no one would have to sell their home/move out of the town as many would still be based there - just running at Woodbine.

Considering the economy and competing for a smaller # of wagering dollars, guaranteeing yourself 12-14 horse fields 10 races a day for 5 or 6 days a week is going to go along way to attract those big gamblers out there looking for exactly this.

Obviously we want Fort Erie racing, but considering the alternatives - perhaps this is one of those "outside the box" thoughts.

Anonymous said...

Someone here at work says the story on 91.7FM this morning was that its close to a done deal but with Tourism Ontario stepping in rather than EDTC. Anybody heard that one?

claudia said...

I love the idea of Fort Erie even being a training centre...but what about those horses that just can't compete on the poly surface.? We saw that time and time again with Woodbine shippers that won here last year that were having trouble in Toronto. Besides...there are plenty of owners ( and horses )that like the quieter training grounds of Fort Erie. We all know there isn't room for all of us at Woodbine...and some of the cheaper horses just aren't worth sending away to the States.