Gulfstream track owner files for bankruptcy

By Michael Vasquez
© 2009 Miami Herald
Thuesday, March 5, 2009

Magna Entertainment Corp., the nation's largest horsetrack operator and parent company of South Florida's Gulfstream Park, announced Thursday it has filed for Chapter 11 bankruptcy protection.

The Ontario-based company, which has suffered losses in the hundreds of millions in recent years, said it plans to continue operations during its bankruptcy restructuring.

Manga's other U.S. racetracks include Santa Anita Park in southern California and Baltimore's Pimlico Race Course, the home of The Preakness Stakes.

''100 percent business as usual,'' said Steve Calabro, vice president of gaming at Gulfstream Park. ``Both on the casino side and the racing side.''

Nevertheless, Magna's bankruptcy filing does raise questions about Gulfstream's long-term future. To keep its racetracks open, the company arranged a six-month, $62.5 million financing package through a subsidiary of MI Developments Inc., Magna's largest shareholder.

But that deal also calls for Magna to sell Gulfstream -- along with other properties -- to either MI Developments or a third party that may emerge during the Chapter 11 process.

Though South Florida's housing market is currently in a horrific slump, Gulfstream's Hallandale Beach property is a highly valuable piece of real estate, which could prompt interest from developers.

''The industry in Florida is going to be very, very concerned about losing Gulfstream, and they're obviously going to try to find solutions,'' said Timothy Capps a University of Louisville equine-industry instructor who previously worked for Magna in Maryland.

Gulfstream's slots casino, Capps said, could help save racing at the park, as it makes the property more attractive to casino interests than if it was just a racetrack alone. Any buyer of Gulfstream could only operate the slots so long as racing continues, according to state pari-mutual guidelines.