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Thoroughbred racing delay costing New Kent County

As talks concerning 2014 thoroughbred season between Colonial Downs and VHBPA languish, county businesses suffer

By Amy Jo Martin, amartin@tidewaterreview.com

6:00 AM EDT, June 4, 2014

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NEW KENT — New Kent County residents and business owners are already experiencing losses from the 2014 thoroughbred season debate between Colonial Downs and the Virginia Horsemen's Benevolent and Protective Association.

According to VHBPA Executive Director Frank Petramalo, the VRC meeting set for Friday morning was canceled without notice because the racetrack had planned on surrendering its license, which caught Virginia Secretary of Commerce and Trade Maurice Jones' attention. Petramalo was unsure if the racetrack still intends to surrender the license at this point in the negotiation process.

As of Monday, VRC Executive Director Bernard Hettel had not heard of “a final resolution to the impasse between the two parties.”

To save the 2014 thoroughbred season, Colonial Downs President Ian Stewart and the track's attorney, James Weinberg, are currently in talks with track owner Jeff Jacobs, of Jacobs Entertainment Inc., and Jones.

Stewart and Weinberg met privately Friday with Jones, members of the VHBPA, Virginia Racing Commission chairman J. Sargeant Reynolds Jr. and Vice chair D.G. Van Clief Jr., said Hettel in a phone interview Monday.

“It is Mr. Jones' and the VRC's fervent desire to run live racing here in Virginia in 2014,” Hettel said.

A costly debate

Colonial Downs and the VHBPA have been unable to reach an agreement on the Virginia Racing Commission's request for a five-week, 25-day thoroughbred season this summer. As a result, four of the eight Off-Track Betting (OTB) facilities were shut down after arguments over the length of the thoroughbred season led to the contract's expiration in January. The remaining four OTB facilities also cannot take bets on any Virginia thoroughbred racing, since a contract has not been signed between Colonial Downs and the VHBPA. The thoroughbred contract deadlock does not affect harness racing.

The horsemen's association is a nonprofit organization made up of 1,300 thoroughbred owners and trainers who race at Colonial Downs and who awards purses, or set amounts of prize money, to the winners.

The debate between the two sides has been costly. Colonial Downs has lost $1.5 million, fired 40 employees and reduced 50 employees' hours throughout the company, said President Ian Stewart said.

Additionally, the racetrack has not hired its usual 300 employees for the thoroughbred season, costing residents job opportunities.

“It's a shame because we are a big part of summer jobs, especially for high school students,” Stewart said.

The VHBPA has also lost $800,000 in its purse account as a result of the contract negotiations, and mainly from the OTB closings, said Petramalo.

Last year, the VHBPA had a $5 million purse account, which was used to pay the winning thoroughbred teams. Purses can run from around $7,500 to $500,000 depending on the horse's track record. Additional money can also be earned if the horse is Virginia-bred.

“A lot of horse owners are losing money because they can't race their Virginia-bred horses in Virginia,” said thoroughbred owner Chris Kuhn. “It's a very bad situation.”

The losses are not limited to local businesses and horsemen. They are also spread countywide and will affect every resident of New Kent. County Administrator Rodney Hathaway is estimating a $402,200 loss in revenue in this year's budget for fiscal year 2015 (FY15) if Colonial Downs is not able to salvage the 2014 thoroughbred season. The thoroughbred contract deadlock does not affect harness racing.

Most of the money is attributed to the loss of OTB revenue but does factor in meals tax and admission tax, said Hathaway.

The $402,000 loss in revenue caused Hathaway to make cuts to the FY15 budget that were originally planned for this fiscal year. Although the budget does not include a tax rate increase, residents could see one in future fiscal years to make up for the lost revenue - if Colonial Downs continues to operate without thoroughbred racing at the track and OTBs.

“Another $402,000 debt could very well affect taxes,” Hathaway said. “That amount alone could mean a one or 2-cent tax increase.”

“If our annual operating costs get higher, the domestic services grow, and expenditures go up but we have less revenue, we will most likely have to raise taxes,” he said.

Impacts are far-reaching

“During May, June and July we are usually packed,” said Star Motel owner Himansu Patel. “We get the race fans and the people working at the track, but this year, we haven't had much business.”

Normally, by this time in May, a lot of the horse owners, trainers, and their “entourages” show up at the track for eight weeks and use local businesses for tack and feed, food and recreation, said VHBPA executive director Frank Petramalo.

The impact of losing the Colonial Downs racing season trickles down to many, including those who provide feed and hay. Brad Wickham, owner of Montpelier Feed & Seed in Montpelier Va., will also be hit financially. feel the loss if the season is canceled.

“I deal with a lot of people who race there,” he said. He gets referrals and networks whenever he goes to New Kent with feed deliveries, and expects to lose about $25,000 if the season is canceled.

“I'll just have to deal with it.”

Nancy Jones, owner of Providence Forge Hardware, is also concerned about how it might affect her business.

“If they don't have the thoroughbred season this year, I could lose at least $5,000, and that is a lot for a small business,” Jones said.

According to Jones, Providence Forge Hardware provides the horsemen with pine shavings, feed, horse water, snaps and eye hooks.

“We bring in buckets of snaps and eye hooks for the tack needs,” she said. “It's always important business to us because summer is the slowest time of the year because of the heat,” she said. “It definitely concerns me because it's going to put a big hurt on the revenue for this county.”

Although George E. Gregory Sr., of Castle Farms Inc. in New Kent County, no longer supplies the racetrack with feed, and a lot of other local farmers grow hay and straw especially for the thoroughbred season, he said.

“Even if they have a thoroughbred season next year, I don't know how many farmers will want to commit to growing it for the racetrack,” said Gregory.

“It's never going to be the same for Colonial Downs, which is such a shame because it's the nicest facility in which I've ever raced my horses. Now, it's not even being used.”

Future is uncertain

In the past few months, the future for the 2014 Colonial Downs thoroughbred season has grown bleak and many of the participating 1,100 thoroughbred horses have been shipped elsewhere.

Horse trainer Karen Godsey, of Eagle Point Farm in Ashland, expects to lose about 20 horses that she has trained for the Colonial Downs thoroughbred season.

Mike and Cindy Stewart of Richmond sent their 5-year-old mare, Sally Oh Sally, to Godsey at Eagle Point for training on March 20. However, they decided in May to move her to Presque Isle Downs, in Erie, Penn.

“I like Colonial Downs because this horse runs well on turf,” Mike Stewart said last month. But the stalemate and lack of progress toward the racing season at Virginia's track led him to find an alternative.

It's not what they wanted. The Pennsylvania track is 500 miles away, making transportation arrangements complicated and expensive since it's not a well-traveled route from Virginia. “We can't participate,” he said.

Another horse owner, Jill Gordon Moore wanted to send her 3-year-old to Godsey to prepare for the Colonial Downs meet. But the stalemate forced her to opt to keep the horse at a northern Virginia farm instead. “Every time you move a horse it spells stress for them,” she said.

Moore believes that Godsey has done an excellent job training horses for Colonial Downs. “She's in the worst position,” she said. “She deserves a better chance than she's getting right now.”

Moore said that shipping horses in July and August is hard on everybody because of Virginia's heat.

Race enthusiasts are concerned

Newport News resident Bob Dennis is frustrated that he has not been able to bet on thoroughbred racing as in past years.

“It's so restricted because of this whole situation,” he said. ”You pay to be able to use the OTBs and now we can't even bet on thoroughbred racing.

“I don't understand why we don't have thoroughbred racing at Colonial Downs because Virginia is horse country.”

Dennis usually bets two or three times a week at the Colonial Downs' OTB sites. However, he is planning on going to Maryland or South Carolina to bet on thoroughbred racing.

“It's just something that I love,” Dennis said.

Although fellow horse racing enthusiast Tad Berman admitted that he hasn't really been affected by the suspension of wagering on thoroughbreds because he subscribes to HRTV and TVG Network, which both broadcast thoroughbred races live from different tracks all over the country, he said he is concerned that a 2014 thoroughbred race season at Colonial Downs could mean fewer horses.

“If the horsemen agree to a ship-in meet only, where the backstretch is closed, that means that many of the stables that would bring their horses in from places like Florida, Ohio, New York, etc., won't come,” said Berman. “And that will mean a lot fewer horses available for each race.”

“Guys like me don't want to make a bet on a race with only five or six horses, so that alone will serve to decrease handle and attendance.”

Dennis and Berman aren't the only ones who love horse racing. According to Colonial Downs representative Darrell Wood, an average of 2,000 people visit the racetrack every day during the summer, with Father's Day bringing in around 6,000 people. During the Independence Day holiday, the track averages 7,000–8,000 people, and the Virginia Derby brings in 7,000–10,000. Even though it's on the schedule for July 12 this year, for the Derby to be held, a contract must be signed.

Cindy Laraway contributed to this article.

Martin can be reached by phone at 804-885-0040.