Great Lakes Downs Seen As A Bargain Opportunity
FRUITPORT TOWNSHIP — Ron Cooper is determined to find someone who will purchase Great Lakes Downs and resume horseracing there. Steve Wilson is also determined to find a buyer — hopefully, one who wants to race horses, but not necessarily.
Great Lakes Downs, which opened about 20 years ago as a harness-racing track, became Michigan's only thoroughbred track in 1999 after the Detroit Race Course in Livonia closed. A year ago the owner of Great Lakes — Magna Entertainment of Ontario, Canada — threw in the towel and announced it would not reopen the track after the end of the 2007 season.
Great Lakes Downs never came close to Detroit Race Course’s daily "live handle" — total bets placed on the live races there, as opposed to bets placed on simulcast races taking place elsewhere. The daily live handle at the Livonia course in its final year was over $400,000 — and that number had been dropping each year, according to Gary Tinkle, executive director of the Michigan Horsemen's Benevolent and Protective Association, a professional organization that represents Michigan's thoroughbred racing trainers and owners. At Great Lakes Downs, the daily live handle in 2000 averaged about $36,800, and Tinkle said that had dropped to about $20,700 in 2007.
But Cooper, the supervisor of Fruitport Township, firmly believes horseracing is still viable there. If that's the case, the track would be a very good investment for someone who wants to reopen it as a racetrack, according to Wilson.
Wilson, who runs the Grand Haven office for commercial real estate firm Grubb & Ellis|Paramount Commerce, said his firm was retained in October by Magna Entertainment to find a buyer for the property. He said he has heard estimates of up to $30 million to build a horse racetrack like Great Lakes Downs from scratch — "and we have the property offered at $9 million," he added.
The 87-acre property includes a 5/8-mile track, a grandstand building of over 62,000 square feet, and parking for about 2,500 cars. There are also about 10 buildings totaling 230,000 square feet that are horse stables and housing for the jockeys, trainers and stable hands. Wilson noted that many horseracing tracks are longer now, at 7/8-mile or more. Still, Great Lakes Downs has had extensive infrastructure upgrades, he said, and the stables and trackside housing were built in 2004.
While he noted that the horseracing business in Michigan is "pretty tough," the Great Lakes Downs property "does pose a great opportunity for somebody to come in that’s very versed in that field, and pick up something (at a cost) that is less than a third of what it could possibly be built for."
Wilson said he and the staff at GE|PC are going to try to do everything they can to find a buyer who will continue horseracing there, but the firm also notes that the location — close to the intersection of U.S. 31 and I-96 and to The Lakes Mall — makes the property attractive for other uses, as well.
"I think it has redevelopment opportunities … and our job is to distinguish every option under the sun," said Wilson.
Other possible uses listed on the GE|PC Web site are auto racing, retail development, industrial development, regional sports complex, casino, or institutional use as a school. Wilson also noted it would be ideal for a regional hospital site.
Cooper said Fruitport Township and the region really need the $10 million in purse money that is spent in this area each year at Great Lakes Downs.
"I think it can be very profitable," said Cooper. "We'd love to have West Michigan ownership of it." He said the track also adds to West Michigan’s appeal as a tourist destination.
"We still have the ability to keep that money here," said Cooper, referring to the annual purse. "They're trying to get that money to the other side of the state right now."
He was alluding to the Pinnacle Race Course, the $142 million track Jerry and Felicia Campbell are planning to open near Detroit Metropolitan Airport. Last fall Michigan Racing Commissioner Christine C. White approved the application submitted by the Campbell's company, Post It Stables Inc., for 63 days of live racing in 2008 in Wayne County, starting July 18.
Campbell is the former founder and chairman of Republic Bancorp and current chairman of Citizens Republic Bancorp. He also owns 125 thoroughbred horses, according to a news release from Post It Stables. Campbell was the person who brought thoroughbred racing to Great Lakes Downs in 1999, although he sold it after a year to Magna Entertainment.
In her press release on Oct. 31 announcing that the Pinnacle race dates for 2008 were approved, White stated, "Mr. Campbell has been an asset to Michigan's thoroughbred industry for years and today is no different."
Liana Bennett, a spokesperson for White, said there is no possibility of horseracing at Great Lakes in 2008; the deadline for applying is past. However, she said that if someone bought the course, applied for a track license and got it, and then applied to the commissioner for race dates before Aug. 31, 2008, there could possibly be racing there in 2009.
Tinkle said operators of a horserace track in Michigan are also required to have a signed contract with a CHO — certified horsemen's organization. Tinkle's organization, the Michigan Horsemen’s Benevolent and Protective Association, was the CHO at Great Lakes Downs. Now it has signed a contract to be the CHO at Pinnacle.
Tinkle, who had an office at Great Lakes for years, said that track was "a nice facility … well kept." But he said there just was not enough attendance to support it, adding that casinos "absolutely" do compete with horseracing in Michigan. Voters in Muskegon previously indicated they would approve a casino there, and at least two groups are now actively interested in opening one.
"In the state of Michigan, unfortunately, the racehorse industry has not been allowed to progress and offer new products," said Tinkle. "We're still basically wagering the same way we did back in 1933." That was the year betting on horses became the first legalized gambling in Michigan.
He described "new products" as slot machines, poker tournaments and betting on horse races via the Internet, which is not legal in Michigan. If it were legal, part of those Internet wagers would help support the horseracing industry in Michigan.
In 2004, Michigan voters turned down a proposal permitting "racinos" — horse tracks that also feature slot machines. Other states do allow racinos, however.
Simulcasting was approved by the state of Michigan in 1995. It allows gamblers at Michigan tracks to bet on televised races in other states, and some of that additional revenue helps support the Michigan tracks. But Tinkle said even simulcast wagering "is in a nose dive and has been for the last six or seven years."
Tinkle said horseracing is "a huge part of our agriculture industry," with a $400 million economic impact. About 20,000 people in Michigan are involved in horseracing.
A racetrack is a very expensive operation, Tinkle said, noting that the cost of manure removal alone at Great Lakes was more than $300,000 a season.
"Probably the cheapest part of (owning a track) is buying it," he said. But, he added, the industry has high hopes for Pinnacle Race Track because of its location.
"The important thing is to get (racing) back to the (greater Detroit) area, where we have … more customers," he said.
The population of Wayne County alone is 1,971,000, compared to a total of less than 445,000 for Muskegon and Ottawa counties combined. Fruitport is in southwest Muskegon County, near the Ottawa County line.