April 13th, 2009 — By — In News & Events
Maryland House votes on eminent domain bill for Preakness today
In an emergency session Saturday, Maryland Senators passed a bill (SB 1072) from Governor Martin O’Malley with a vote of 32-14 authorizing the purchase or use of eminent domain to acquire the Maryland-based assets of Magna Entertainment, which declared bankruptcy in March. Magna owns Laurel Park, Bowie Race Course Training Center, Pimlico Race Course and all rights and events associated with the Preakness Stakes. The Preakness is considered the “second jewel” of the “Triple Crown” of thoroughbred racing which also includes the Kentucky Derby and Belmont Stakes.
The legislation authorizes the Maryland Economic Development Corporation to issue bonds in order to raise the funds necessary to acquire the properties and racing assets.
Maryland’s governor and supporters of the emergency legislation are fearful that with Magna’s assets in bankruptcy the Preakness, one of the state’s most prestigious and profitable sporting events, might be lost to the highest bidder at auction and consequently relocated outside of the state’s borders. In 1984, Maryland’s General Assembly attempted to prevent a similar loss of sporting assets when the Baltimore Colts decided to move to Indianapolis.
Opponents of the bill question whether the state should own the race tracks and the high cost of purchasing them (the property value alone is $68 million, as declared by Magna’s bankruptcy fillings). Others question the use of eminent domain to acquire a private business. Magna opposes the legislation seeking rather to auction its assets.
Because SB 1072 is emergency legislation, three fifths majority (85 votes in favor) will be needed in the House of Delegates to pass. If the House votes today to pass the bill, it will go before Gov. O’Malley for signature.
We will continue to follow the jockeying of this interesting legislative initiative as it races through the Maryland House today possible to cross the finish line at Governor O’Malley’s desk.
For a discussion on the constitutionality of taking Magna’s racing assets by eminent domain, check out Professor Gideon Kanner’s blog Gideon’s Trumpet.