One-Year Lease Extension

[MaryS]

Whole thing seems a bit strange, but... (BTW, I'll post a link to a pdf of our end-of-season release with final stats later today.)

http://nctimes.com/news/local/del-mar/a ... dee0f.html

DEL MAR: Thoroughbred club gets one-year lease extension

PAUL SISSON - psisson@nctimes.com | Posted: Monday, September 14, 2009 4:30 pm | 1 Comment

DEL MAR ---- The state committee that doles out leases at the Del Mar Racetrack has decided to wait until next year to consider proposals from other groups that may be interested in managing the racing season at the popular seaside venue.

Late last month, the State Race Track Leasing Commission pulled a request for proposals to run racing operations at the track, deciding instead to grant a one-year extension to the Del Mar Thoroughbred Club, which has managed the track for 40 years.

The thoroughbred club's 20-year lease would have otherwise expired Dec. 31.

Fairgrounds chief executive officer Tim Fennell said last week that the decision came after state Sen. Christine Kehoe, D-San Diego, sent a letter to the commission requesting the delay. He said Kehoe's letter questioned whether it was smart to look at new track operators now in the midst of a rough economy.

Kehoe could not be reached for comment last week.

Fennel said state law requires the leasing commission and the 22nd Agricultural District, which manages the fairgrounds, to seek new proposals when a long-term contracts expire.

"The idea is to cut the best deal possible and give every qualified potential participant an opportunity," Fennell said.

He said that he wasn't sure what to make of the notion that waiting was better than moving forward.

"We spend about a year putting together the (request for proposals). We will tweak it and release it again in a year," he said.

Fennell said that he obtained "several" requests for the proposals document but none was returned by the time the document was pulled from circulation. He did not specify who pulled the requests, but added that, given the Thoroughbred Club's long experience and profitability, the association was not looking for a newbie.

"We certainly want experienced and well-qualified applicants," Fennell said. "We were looking for somebody with at least 10 years of experience running a successful race meet. There aren't that many of those out there."

Craig Fravel, executive vice president of the Thoroughbred Club, said he understood the leasing commission's requirement to put the contract up for proposals. Like Fennell, he was a bit mystified about the reasons for delaying the proposal process.

"I understand the decision. I'm not sure what's going to change between now and next year though," Fravel said.

The track manager said he believes the Thoroughbred Club has earned the right to continue running summer races where the turf meets the surf.

"This has been one of the most successful racing operations in the United States. I believe its probably been the most profitable pure racing operation in the nation," he said.

This year, with the economy in the tank and entertainment dollars in short supply for many local households, the racetrack has cut one day of racing per week. Fravel said the move, in addition to aggressive marketing to younger patrons and continuing free concerts on Friday nights, have kept the race about as profitable as last year.

"We're holding our own," he said. "We'll be issuing the financial results soon."

[Thinkinproblem]

Putting the plant back on the market?

[ScrapingThePaint]

A little different spin in the Sept 16th Weekly Newsletter from the California Thoroughbred Breeders Association.

http://www.ctbaforum.com/weekly/caweekly.pdf

(The link above will probably produce a different newsletter next week, so here is the Sept 16th article from page 4)

Special Feature:
Del Mar Awarded One-Year Contract Extension

What many close to the top at the Del Mar Thoroughbred Club (DMTC) thought was a done deal by which the DMTC would win an uncontested renewal of the 20 year contract for the DMTC to conduct racing at the state owned Del Mar race track became undone late last month. Their plan had been to submit an uncontested bid by a September 14, 2009 deadline.

At the request of State Senator Christine Kehoe, the State Race Track Leasing Commission (RTLC), composed of the heads of the State Departments of Finance, General Services and Agriculture, in Sacramento plus three members of the local 22nd District Agricultural Assn (Fairgrounds) Board, met in a special Monday night August 24 meeting called at Kehoe’s request.

After hearing testimony regarding the Request For Proposal (RFP) process used to solicit bids from potential concessionaires – called into question by community members - and a review of the state of the Thoroughbred industry, the Leasing Commission extended the deadline for receiving responses from prospective concessionaires to run the next 20 years of racing at Del Mar one year to September 2010, with the potential to extend the RFP’s deadline into 2011 if needed.

The current contract with the Del Mar Thoroughbred Club (DMTC) wasalso authorized to be extended, as is, to December 31, 2010, and could be further extended month to month if the RFP response deadline goes into 2011, thus permitting race services to continue as potential bidders are sought.

Uncertainty within the Thoroughbred racing industry: Santa Anita in bankruptcy and the bankruptcy judge throwing out all bids as “too low” several weeks ago and now a non-profit eyeing that track; Hollywood Park race track now scheduled to close, with the horses housed there facing a pending six month order to vacate which the racetrack’s owner, The Hollywood Park Land Company could issue at any time; plus the uncertainty regarding a series of proposed changes to the fairground’s master plan, all prompted Kehoe to ask for the extension.

Kehoe’s office spokesperson 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 tax payers.

The current uncertainty in the industry and questions about future fairgrounds expansion plans, which include adding 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, makes making the 20 year contract not prudent at this time said Kehoe’s spokesperson. “In a year or more from now the future should be clearer,” says Deanna Spehn, Policy Director for Senator Kehoe.

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 were also raised at the Monday meeting of the RTLC about the adequacy of the notice in posting the current RFP for running the race concession. The RFP had been developed by two of the Fair Board members without any public meetings or input. It was due out in January, however, it did not “hit the street” until July 7, 2009. Public commentators pointed out that even when it was posted 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 RTLC, who participated in the meeting via a speaker phone connection, pointed out that they had never seen the RFP until its belated release.

The Commission took three actions. They postponed the due date of the responses to the RFP for one year, until September 2010, with the option to extend for another year if needed. They authorized extending the current contract of the DMTC, now set to expire December 31, 2009 for one year, with the option to extend it month to month into 2011 if needed, until a new concession contract is awarded, giving “adequate notice” to the DMTC if they are not selected. They added State Department of General Services Secretary Will Bush to the formerly two person committee to make any needed revisions to the RFP, and to oversee its publication and bid evaluations. All the meeting of this committee are now required to be held in public.

In May of this year both San Diego County Commissioner Pam Slater-Price and regional council of governments (SANDAG) CEO Gary Gallegos had written the track leasing commission urging that a “negotiating point” be placed in the then still pending RFP seeking the future concessionaire’s financial participation in implementing the train stop portion of the San Dieguito River Bride Replacement and Double Track – Fairgrounds rail platform project. From such a stop race fans could easily walk into the grandstands. What appeared “on the street” in July did not contain such a “negotiating point.”

Interviews with prospective potential bidders have shown that given the previous September 14, 2009 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.
—By Richard Eckfield, Savvy Senior at the Track

[MaryS]

Found this part especially interesting:

In May of this year both San Diego County Commissioner Pam Slater-Price and regional council of governments (SANDAG) CEO Gary Gallegos had written the track leasing commission urging that a “negotiating point” be placed in the then still pending RFP seeking the future concessionaire’s financial participation in implementing the train stop portion of the San Dieguito River Bride Replacement and Double Track – Fairgrounds rail platform project. From such a stop race fans could easily walk into the grandstands. What appeared “on the street” in July did not contain such a “negotiating point.”

According to DMTC's current lease agreement with the 22nd DAA, all "profits" from the racing operation (it's a non-dividend-paying corporation) go back to the 22nd for capital improvement projects. The 22nd makes the determination of how the money is to be spent. (Not to mention the "bride replacement participation"!)

[MaryS]

After reading Mr. Eckfield, I did a Google search. It pretty much appears that his life is built around the crusade to build the train stop, although he and his wife do have other traffic-related issues they are adamant about -- including driving 55 MPH on the freeways.

http://www.sandiegoreader.com/news/2009 ... irgrounds/

Del Mar Un-Fairgrounds

By Dorian Hargrove | Published Monday, March 16, 2009

Richard Eckfield knows the perfect way to draw bigger crowds to the Del Mar Fairgrounds. He’s pitched the idea for over three years. The problem is, nobody at the fairgrounds is listening.

Eckfield wants the fairgrounds to build a train stop at the north edge of the San Dieguito River. The idea isn’t new — in the 1930s, racetrack founder Bing Crosby bartered a deal with the Santa Fe Railroad to drop passengers off at the track. Eckfield says that although train passengers can take a ey to the racetrack from Solana Beach, a dedicated platform would attract more people and cut down on traffic and emissions from the double-decker buses.

Eckfield wasn’t the first person to come up with the idea in recent years: plans for constructing an additional train stop have been included in the fairground’s master plan since 1985. In recent years, officials from North County Transit District, San Diego Association of Governments (SANDAG), and councilmembers from Del Mar to Encinitas have all supported construction of a new platform. Yet, despite all the support, no headway has been made.

During the past three years, Eckfield has testified in front of the fairground’s board of directors numerous times, pleading with them to arrange a meeting and listen to his ideas for the stop and where they might get the funds for it. There’s been no response.

So, Eckfield went on the offensive, accusing the fair’s CEO, Tim Fennell, of mismanagement and for running the state-owned property like an autocrat, averse to any outside influence.

Eckfield contacted reporters. He testified in front of the fairground's board of directors about the gratuitous 29 percent pay raise they recently approved for Fennell in a closed session meeting late last year (that raise has since been denied by the state). Eckfield attacked Fennell for choosing to ignore the state-mandated furloughs for state employees (that decision has since been overturned and now all fairground employees are required to work eight hours less each week). He criticized a roof project for going nearly $10 million over budget and protested the plans for a time-share hotel to be built on fairground property.

Despite the criticism, fairground spokesperson Talin Hartounian says everyone is on the same track when it comes to the train stop; the reason for all of the delays is finding the cash to fund it.

“As far as whether or not we support it, we absolutely support having a stop at the fairgrounds. We fully support it; however, financially, at this time, it apparently costs a lot more than originally estimated...”

Reply to an article about police targeting drunk drivers leaving the track on Opening Day:
http://latimesblogs.latimes.com/lanow/2 ... track.html

Thank heavens they are finally policing fairground events. For years we have watched people to drunk to walk get into their car and drive away from fairground and race events. Does someone have to be killed before the "management" acts responsibly? How about building that train stop at the rear of the track, in planning for 24 years, to which party goers can stagger and have a safe ride home.

Posted by: Richard Eckfield | July 27, 2009 at 06:08 AM

[ScrapingThePaint]

Looks like Mr. Eckfield is to Fairgrounds management what Jammer is to the CHRB. But I have to temper that opinion with the statement that no matter how eccentric the speaker might be, there is usually a bit of truth in what they say.

It's like a bumper sticker that I saw once. It read: "Just because I'm paranoid, it doesn't mean people aren't out to get me."

Mary, you make a good point. If 100% of the "profit" from the race meet goes to the 22nd DAA, who have absolute authority in determining how the money is used, then it seems out of place to include the Del Mar Train Stop as a "negotiating point" in the RFP for the racetrack leasee.

At the last "Donut" thing at Del Mar (you know where people show up for free donuts on a Saturday morning and guest speakers talk about Del Mar and horse racing), Joe Harper was one of the guest speakers. An audience member asked him about the Del Mar Train Stop (I wonder if it was Mr. Eckfield), and whether construction of the Train Stop was in any plans for the future. (At that point, Mr. Harper had talked about the possibility of bringing the Breeders' Cup to Del Mar and spending money to expand the Turf Course, so it was a logical time to ask about spending money on the Train Stop.)

Mr. Harper said that the DMTC had run the numbers and were against it at this time. He said that for the money (and time) it would take to build the train stop, "he" could put another 100 (maybe he said 200) double-decker buses on to shuttle people from the Solana Beach station to the track. By the way, can one ride those double-deckers for free? And do they only run for the race meet?

Besides possibly being a nice thing for the race meet, would a Train Stop increase attendance at the Del Mar Fair, Surfside, the Del Mar National Horse Show, the San Diego Sockers games, and all the trade shows that take place during the off season? Who has the Parking concession at the Fairgrounds (I don't remember)? I wonder how much they pay to the 22nd DAA in their lease (percentage of profits, or?), and how that might compare to what the ROI might be from a Del Mar Train Stop.

[MaryS]

Mr. Harper said that the DMTC had run the numbers and were against it at this time. He said that for the money (and time) it would take to build the train stop, "he" could put another 100 (maybe he said 200) double-decker buses on to shuttle people from the Solana Beach station to the track. By the way, can one ride those double-deckers for free? And do they only run for the race meet?

The double deckers are free during the race meet. During the fair, the buses are used for transportation from the various off-site parking locations.

"Fair shuttles from the Solana Beach train station

The North County Transit District's Breeze buses (special Fairgrounds Route 401) operate between the Coaster station in Solana Beach and the Fairgrounds every 20-25 minutes between 9:35 a.m. (first bus to the Fair) and 12:12 a.m. (last bus to leave the Fair). Every Breeze bus is fully ADA compatible and capable of handling wheelchairs."

...Besides possibly being a nice thing for the race meet, would a Train Stop increase attendance at the Del Mar Fair, Surfside, the Del Mar National Horse Show, the San Diego Sockers games, and all the trade shows that take place during the off season? Who has the Parking concession at the Fairgrounds (I don't remember)? I wonder how much they pay to the 22nd DAA in their lease (percentage of profits, or?), and how that might compare to what the ROI might be from a Del Mar Train Stop...

We handle our own parking during the meet. The fair does have a concessionaire who handles theirs. I'd think that best-case scenario -- and I'm a huge fan of taking the train -- is that train goers would never make up a very large percentage of total attendance. If there were fewer people driving to the fairgrounds, the fair would probably be able to cut down on the free off-site parking they offer at Horsepark, MiraCosta College and Torrey Pines .

http://www.voiceofsandiego.org/articles ... 052109.txt

The Sandag staff broke out the train platform and access ramp’s costs from the balance of the project: $5.4 million for a 1,000-foot long train top platform; $3.7 million for a 600-foot platform, with appropriate access ramps. The 1.1 miles of double tracking to Solana Beach to the north, and new double tracks into Del Mar to the south, plus the two new trestles over the river were budgeted at $72 million.

This quote from the same article is a bit of a head-scratcher:

A study conducted in August 2008 and presented to Assemblyman Martin Garrick showed that in 2007 the Thoroughbred Club made just less than $1 million per day just from the betting at Del Mar. Concession revenue was in addition to that. Garrick is the author legislation which provides that Del Mar will receive at least two additional weeks of racing once Hollywood Park closes, scheduled for December 2009.

This year our total on-track handle was $84.8 million over 37 days, or about $2.3 million per day. If this were ALL wagered on Del Mar races, the amount to the track would be about $184,000-per day. The actual amount, which certainly isn't all "profit" in any case, is less than that as we get a smaller percentage of the money wagered here on other tracks.

[Carlfen]

I think the idea is quite interesting, a train stop near the Del Mar Fairgrounds would be a nice thing but the big question will be the money. Maybe Mr. Eckfield will bet on the horse races in Del Mar, this would be a possible way to get the money for the project I hope that this project will be realized some day and the train stop will help to attract even more visitors, the great events at Del Mar would deserve it.

[Qwiksilver]

New here, but not new to Del Mar.

The train is why I go to Del Mar.

I live in Hollywood. It's a long and stressful drive to anywhere near San Diego. Where I live I can board an MTA train to Union Station and hop the Surfliner to the races. I can relax and handicap the whole way there. I've held Del Mar as the example for Santa Anita to get shuttles to and from the Gold Line stop at Sierra Madre. Traffic is why I don't go to Hollywood Park very often. Frequently I have to drive many miles out of my way or sit for over an hour to get home from Inglewood. (Also, the "questionable" neighborhood doesn't entice me to attend often.)