http://www.sacbee.com/101/story/401408.html
Could arena coexist with horse racing?
Track's future in balance as Cal Expo board weighs making room for Kings
By Mary Lynne Vellinga - Bee Staff Writer
Published 12:00 am PDT Thursday, September 27, 2007
Story appeared in METRO section, Page B1
When Cal Expo board members gather Friday morning to hear the NBA's pitch for a basketball arena at the state fairgrounds, the condition of another sport -- horse racing -- will loom large in the discussion.
Nearly a third of Cal Expo's 360 acres is occupied by horse racing activities: a milelong track, a grandstand, a satellite betting facility, 1,036 horse stalls and even an RV park where track workers live.
"It's like a little city," said Brian May, Cal Expo deputy general manager.
But the future of horse racing at Cal Expo is uncertain, and the cost for running this equine metropolis is rising.
"Racing in general has been in decline. It's not the sport of kings anymore," May said.
Horse racing now accounts for 18 percent of Cal Expo's annual revenue of $28 million. But the state fairgrounds needs to find more lucrative sources of income if it hopes to address its $40 million backlog of deferred maintenance -- and the $150 million or more needed to upgrade the aging facility into a more modern entertainment center.
"We need money," said Cal Expo Board Member Steve Beneto, a West Sacramento trucking company owner.
Board members say they're eager to hear what the NBA has in mind. The Cal Expo staff has recommended that the board authorize negotiations with the league.
Ultimately, it is up to the board -- made up of people appointed by the governor and Legislature -- to decide whether to use Cal Expo land for an arena. Its decision must be reviewed and approved by the state Department of General Services, but not by the Legislature, May said.
Board member Marko Mlikotin said he sees no reason why Cal Expo should not engage in talks with the NBA. Whether that will actually result in a deal is anyone's guess.
"First and foremost, Cal Expo and the community and the NBA need to come up with a deal that's viewed as mutually beneficial, where everyone walks away with a win-win," Mlikotin said. "That will be the No. 1 goal, and the No. 1 challenge."
One potential arena location jumps out. The western end of the fairgrounds, the part adjacent to the Capital City Freeway, is nothing but parking lots, some of them dirt. These lots sit on the opposite end of the fairgrounds from the horse racing operation.
Losing the surface parking spaces wouldn't necessarily hurt, either. "You always have the ability to double-decker the parking, Mlikotin said. "There's only two times a year where we reach 100,000 guests in one day. That wouldn't coincide with basketball."
But any arena proposal is likely to involve significantly more than just the acres needed for the sports facility itself.
Those familiar with the NBA's nascent plan say it involves developing enough land at Cal Expo to generate much of the money needed to build the arena and renovate the fairgrounds -- tasks that could easily cost $650 million.
Because the NBA has not released any details, it's unknown how much land the league has in mind, how much it would ask the Kings' owners to pay, and what an arena would cost.
May said he thinks horse racing could coexist with an arena at Cal Expo. "It would take some creative land use planning, but it could be done."
He stressed that Cal Expo remains committed to horse racing. "We'll be in the business of horse racing as long as the industry supports it," he said.
Besides the state fairgrounds and the horse racing operation, its two biggest users, Cal Expo has some smaller tenants.
Raging Waters -- formerly Six Flags WaterWorld USA -- occupies 9 acres. Then there's an 8-acre RV park where travelers can rent spaces. The shuttered Paradise Island entertainment center sits on 5 acres. It is currently used by Sacramento County as a homeless shelter.
Racing has been a mainstay at Cal Expo since it opened in 1968. The fairgrounds is now the only place in the state where harness races are run. The nonprofit Sacramento Harness Association has a lease that expires in July 2008. It is negotiating to extend the lease by at least one year, and has an option for another two years.
Cal Expo is also making plans to bring thoroughbred racing back to the State Fair after an absence of several years. The California Horse Racing Board is expected to vote today to award Cal Expo 12 days of racing during the 2008 fair.
But the long-term future of both the harness racing and thoroughbred racing remains uncertain.
While the imminent closure of Bay Meadows would seem to make Cal Expo a good candidate to attract more thoroughbred racing, that would require the installation of an expensive new track surface.
Additional expenses loom. The Cal Expo backstretch was built without sewer facilities; runoff water from stalls and horse bathing used to go directly into the river. Cal Expo already has invested millions of dollars to improve wastewater disposal, May said, but the state might soon require it to build a wastewater treatment plant.
"That could cost as much as $3 million," May said. "We'd then have to evaluate whether that's in our business interest, and whether we'd earn a return."
Any move to get rid of racing at Cal Expo could run into stiff resistance. The fair board includes people who have strong ties to the racing industry.
Kirk Breed, who previously served as both general manager and a board member of Cal Expo, now lobbies for horsemen. He said he thinks the fairgrounds will grow in importance for horse racing as many private tracks are losing money and being redeveloped.
"Based on the history, running horses at the (public fairgrounds) is going to be even more profitable than what it has been in the past. That will pay more money into the fair," Breed said.
If the board agrees to go forward with an arena, Breed said racing enthusiasts will push to keep the racetrack. He said there was "more than enough room" to accommodate both purposes.
Dick Feinberg, general manager of the Sacramento Harness Association, offered a similar view. "A great model for that would be the Meadowlands (in New Jersey), which has a football stadium, a basketball and hockey arena and a racetrack, all on the same state-owned property," Feinberg said.
About the writer: The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga@sacbee.com. Bee staff writer Terri Hardy contributed to this report.
Could arena coexist with horse racing?
Track's future in balance as Cal Expo board weighs making room for Kings
By Mary Lynne Vellinga - Bee Staff Writer
Published 12:00 am PDT Thursday, September 27, 2007
Story appeared in METRO section, Page B1
When Cal Expo board members gather Friday morning to hear the NBA's pitch for a basketball arena at the state fairgrounds, the condition of another sport -- horse racing -- will loom large in the discussion.
Nearly a third of Cal Expo's 360 acres is occupied by horse racing activities: a milelong track, a grandstand, a satellite betting facility, 1,036 horse stalls and even an RV park where track workers live.
"It's like a little city," said Brian May, Cal Expo deputy general manager.
But the future of horse racing at Cal Expo is uncertain, and the cost for running this equine metropolis is rising.
"Racing in general has been in decline. It's not the sport of kings anymore," May said.
Horse racing now accounts for 18 percent of Cal Expo's annual revenue of $28 million. But the state fairgrounds needs to find more lucrative sources of income if it hopes to address its $40 million backlog of deferred maintenance -- and the $150 million or more needed to upgrade the aging facility into a more modern entertainment center.
"We need money," said Cal Expo Board Member Steve Beneto, a West Sacramento trucking company owner.
Board members say they're eager to hear what the NBA has in mind. The Cal Expo staff has recommended that the board authorize negotiations with the league.
Ultimately, it is up to the board -- made up of people appointed by the governor and Legislature -- to decide whether to use Cal Expo land for an arena. Its decision must be reviewed and approved by the state Department of General Services, but not by the Legislature, May said.
Board member Marko Mlikotin said he sees no reason why Cal Expo should not engage in talks with the NBA. Whether that will actually result in a deal is anyone's guess.
"First and foremost, Cal Expo and the community and the NBA need to come up with a deal that's viewed as mutually beneficial, where everyone walks away with a win-win," Mlikotin said. "That will be the No. 1 goal, and the No. 1 challenge."
One potential arena location jumps out. The western end of the fairgrounds, the part adjacent to the Capital City Freeway, is nothing but parking lots, some of them dirt. These lots sit on the opposite end of the fairgrounds from the horse racing operation.
Losing the surface parking spaces wouldn't necessarily hurt, either. "You always have the ability to double-decker the parking, Mlikotin said. "There's only two times a year where we reach 100,000 guests in one day. That wouldn't coincide with basketball."
But any arena proposal is likely to involve significantly more than just the acres needed for the sports facility itself.
Those familiar with the NBA's nascent plan say it involves developing enough land at Cal Expo to generate much of the money needed to build the arena and renovate the fairgrounds -- tasks that could easily cost $650 million.
Because the NBA has not released any details, it's unknown how much land the league has in mind, how much it would ask the Kings' owners to pay, and what an arena would cost.
May said he thinks horse racing could coexist with an arena at Cal Expo. "It would take some creative land use planning, but it could be done."
He stressed that Cal Expo remains committed to horse racing. "We'll be in the business of horse racing as long as the industry supports it," he said.
Besides the state fairgrounds and the horse racing operation, its two biggest users, Cal Expo has some smaller tenants.
Raging Waters -- formerly Six Flags WaterWorld USA -- occupies 9 acres. Then there's an 8-acre RV park where travelers can rent spaces. The shuttered Paradise Island entertainment center sits on 5 acres. It is currently used by Sacramento County as a homeless shelter.
Racing has been a mainstay at Cal Expo since it opened in 1968. The fairgrounds is now the only place in the state where harness races are run. The nonprofit Sacramento Harness Association has a lease that expires in July 2008. It is negotiating to extend the lease by at least one year, and has an option for another two years.
Cal Expo is also making plans to bring thoroughbred racing back to the State Fair after an absence of several years. The California Horse Racing Board is expected to vote today to award Cal Expo 12 days of racing during the 2008 fair.
But the long-term future of both the harness racing and thoroughbred racing remains uncertain.
While the imminent closure of Bay Meadows would seem to make Cal Expo a good candidate to attract more thoroughbred racing, that would require the installation of an expensive new track surface.
Additional expenses loom. The Cal Expo backstretch was built without sewer facilities; runoff water from stalls and horse bathing used to go directly into the river. Cal Expo already has invested millions of dollars to improve wastewater disposal, May said, but the state might soon require it to build a wastewater treatment plant.
"That could cost as much as $3 million," May said. "We'd then have to evaluate whether that's in our business interest, and whether we'd earn a return."
Any move to get rid of racing at Cal Expo could run into stiff resistance. The fair board includes people who have strong ties to the racing industry.
Kirk Breed, who previously served as both general manager and a board member of Cal Expo, now lobbies for horsemen. He said he thinks the fairgrounds will grow in importance for horse racing as many private tracks are losing money and being redeveloped.
"Based on the history, running horses at the (public fairgrounds) is going to be even more profitable than what it has been in the past. That will pay more money into the fair," Breed said.
If the board agrees to go forward with an arena, Breed said racing enthusiasts will push to keep the racetrack. He said there was "more than enough room" to accommodate both purposes.
Dick Feinberg, general manager of the Sacramento Harness Association, offered a similar view. "A great model for that would be the Meadowlands (in New Jersey), which has a football stadium, a basketball and hockey arena and a racetrack, all on the same state-owned property," Feinberg said.
About the writer: The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga@sacbee.com. Bee staff writer Terri Hardy contributed to this report.