Del Mar Racetrack’s Contract Not a Done Deal, After All

Thursday, Sept. 17, 2009 | What many close to the top at the Del Mar Thoroughbred Club thought was a done deal — that the DMTC would win an uncontested renewal of the 20-year contract to conduct racing at the state-owned Del Mar racetrack —became undone late last month.

The decision came at a special Aug. 24 meeting called by state Sen. Christine Kehoe of the State Race Track Leasing Commission, composed of the heads of the state departments of finance, general services and agriculture plus three members of the local fairgrounds board.

At the meeting, the Leasing Commission extended the deadline for receiving bids from prospective concessionaires for one year following testimony questioning the process for developing the bid.

The current contract with the Thoroughbred Club was also authorized to be extended, as is, to Dec. 31. 2010, and could be further extended month to month if the bid response deadline goes into 2011, thus permitting race services to continue as potential bidders are sought.

Kehoe asked for the extension amid great uncertainty within thoroughbred racing. The Santa Anita track is in bankruptcy and now a nonprofit is eyeing ownership of that track.

Hollywood Park race track is scheduled to close, and there is also uncertainty regarding a series of proposed changes to the Del Mar fairground’s master plan.

Kehoe’s office spokeswoman, Deanna Spehn, indicated that the senator feels it is important that the Leasing Commission be in a position to obtain the best possible agreement from potential race operation concessionaires on behalf of the taxpayers.

The current uncertainty in the horse race industry and questions about future fairgrounds expansion plans made making the 20-year contract not prudent at this. The fairgrounds expansion would add a condominium hotel, health club and spa, office tower for the state employees, plus needed projects including the potential to widen the turf race course and establishing a train stop north of the San Dieguito River, at the west edge of the fairground property.

“In a year or more from now the future should be clearer,” Spehn said.

In addition to the money generated to cover the Thoroughbred Club’s costs, the racetrack generates money for improvements at the state-owned fairgrounds. Last year the Thoroughbred Club is reported to have generated $33.9 million in revenue from the 43 day racing meet. This year’s meet has been reduced to 37 days.

Concerns about the adequacy of the notice in posting the current call for bids for running the race concession were raised at the Monday meeting. The call had been developed by two of the fair board members without any public meetings or input. It was due out in January 2009. However, it did not “hit the street” until July 7. Public commentators, including this author, pointed out that even when it was posted on a Sacramento website in July there was little or no publicity. “It is not like it was ‘on the street,”‘ said one public commentator, “it was more like it was hiding in an alley.”

Sacramento members of the commission, who participated in the meeting via a speaker phone connection, also pointed out that they had never seen the RFP until its belated release.

The commission postponed the due date of the responses to the call for bids for one year, with the option to extend for another year if needed.

In May of this year both Supervisor Pam Slater-Price and Sandag CEO Gary Gallegos had written the track leasing commission urging that a “negotiating point” be placed in the call for bids that would seeking the future concessionaire’s financial participation getting a train stop at the track. From such a stop race fans could easily walk into the grandstands. What appeared in July did not contain such a “negotiating point.”

Interviews with prospective potential bidders have shown that given the previous Sept. 14 deadline imposed, it was likely that the DMTC would have been the only bidder making this a one-horse race. It is expected that the additional time could attract other potential race operations contractors to the bidding process.

Richard Nielsen-Eckfield is a local activist who has been advocating for a competitive bidding process for the service contract at the racetrack.

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