After five years of planning, initial rejection by the Minnesota Racing Commission, legal hurdles and financial concerns, the owners of the state-of-the art Running Aces Harness Park in northern Anoka County can finally see the starting line.
But will their $62 million gamble pay off?
"There is nobody who hopes any more than I do that this thing works," Dr. Camille McArdle, a veterinarian and longtime Minnesota racing commissioner, said of the 165-acre Running Aces track that opens its inaugural 50-day meet April 11. "If it doesn't, it's going to negatively impact horse racing in Minnesota."
With a reported 500 applications for its 300 stalls, the promise of 600 jobs, and a proposed simulcast agreement that would make Canterbury Park a beneficiary instead of a rival, the Running Aces owners, known collectively as North Metro Harness Initiative, seemingly have covered their tracks.
"I'm optimistic about their chances," Kathleen Preece, another commissioner, said of the owners of this testimonial to the Sport of Kings, in Columbus, near Forest Lake. "I trust these people."
Yet McArdle and Preece were among five commissioners who in October of 2004 voted against and ultimately rejected the initial race-track application put together primarily by Bloomington-based Southwest Casino and Hotel Corp., which enlisted MTR Gaming Group of West Virginia as a partner.
What the commissioners saw in that application in late 2003 were documents of full disclosure. They included a U.S. Bankruptcy Court filing, a $25 million loan request and minor casino-related lawsuits. And they saw the filing of MTR board member L.C. Greenwood, who, as a defensive lineman for the Pittsburgh Steelers, deflected three Fran Tarkenton passes in the Minnesota Vikings' 16-6 loss in Super Bowl IX in January of 1975.
MTR Gaming Group -- aka Mountaineer Racing -- brought a proven résumé in the racing and gambling industries. It was Southwest Casino and Hotel Corp., the local partner and driving force behind this track, that raised eyebrows.
"I didn't even know there was a Southwest Casino located in Minnesota," Dick Krueger, executive director of the Minnesota Racing Commission, said recently.
But Krueger knew of real estate lawyer Jim Druck, a horse owner who had served on a state advisory board for thoroughbreds from 1990 to 1992. In 1992, Druck became co-founder, president and CEO of Southwest Casino and Hotel. At the time of its application to the Minnesota Racing Commission, Southwest owned, operated or managed casinos in Colorado, South Dakota, Oklahoma and Texas.
"Impressed?" said Krueger. "How could you not be impressed? They had been successful in everything they'd done."
Skepticism and concerns
But at least one racing commissioner was skeptical, wondering if the owners of a track in Anoka County might be more interested in opening a card room than in harness racing. "Canterbury had a hard time getting people to watch [simulcast] harness races," said former Racing Commissioner Bob McNamara. "I thought [for the new track owners] the main thing was gambling."
By Minnesota law, the card room cannot open until the completion of the initial 50-day meet. Neither Druck nor Southwest Casino and Hotel co-founder Jeffrey Halpern returned calls, deferring to Southwest Casino and Hotel CFO and President Thomas Fox, who sat down for an interview for this story.
Racing Commissioner Bill Robinson, now retired, and Darcy Hitesman, the commission chairwoman, said they voted against the initial application because they worried that the harness track might compete with Canterbury Park, just 52 miles away in Shakopee.
The application also included the bankruptcy court filing of Sept. 11, 2002, by Gold Rush I, LLC, a subsidiary of Southwest Casino and Hotel. The Chapter 11 maneuver was simply a matter of legal posturing in a complicated dispute, Southwest sources explained recently. But not all, if any, of the commissioners knew that, some told the Star Tribune.
The commissioners also read letters dated Oct. 14, 2003, written to and from Minneapolis financial giant Oppenheimer & Co. describing terms of $25 million in debt financing requested by North Metro Harness Initiative, the name of the Southwest Casino-MTR partnership.
"Of course, it bothered me," said McNamara, who voted against the application.
Meanwhile, McArdle worried that there would not be enough quality horses for a 50-day meet or enough stalls. Preece's no vote was a nod to a small but vocal group of about 300 Columbus residents who opposed gambling.
"I also wondered at first, 'Is this the operation we want in this state?'" Racing Commissioner Kris Sundberg said recently. "But Jim Druck's reputation is impeccable and MTR knows racing inside and out.
"Folks like Oppenheimer don't make investments to lose money," she said.
As for the minor casino-related lawsuits, initiated by Southwest, Sundberg said, "What successful big business hasn't been involved in lawsuits?"
A turnaround
In Anoka County, the track found an ally in then-racing commissioner Scott LeDoux, now an Anoka County commissioner. Longtime County Commissioner Dan Erhart vowed the county's support. "We saw a business that was a good fit, that would bring people into the county," he said.
The racing commission voted again in 2005 and, this time, Hitesman and Robinson voted in favor of the new track. Hitesman's reversal was not surprising. Even when she voted against the North Metro application the year before, Hitesman had said, "If there is ever a time to license another racetrack in Minnesota, it is now and it is with this applicant."
Robinson, now 75, said recently that he changed his mind because he was convinced that the new track would bring revenue to Canterbury, through the simulcasting of thoroughbred races. A bill allowing Running Aces to simulcast all races is expected to pass the Legislature before the current session ends.
The legal protests of the anti-gambling Columbus group were dismissed in court. After months of scrutinizing the land, the Army Corps of Engineers gave the track its blessing. And now they're off.
"We've had a lot of support from Anoka County," Fox of Southwest Casino said. "I believe the track will spur other development up there.
"Right now, people don't know Columbus. Harness racing will put them on the map."
Paul Levy • 612-673-4419
