Winnipeg Free Press - PRINT EDITION

Jockeying for position

Assiniboia Downs may fend off Red River Ex takeover with help from Peguis

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The Manitoba Jockey Club is in discussions to sell their 57-hectare Portage Avenue property, including the Assiniboia Downs thoroughbred racetrack, to the Peguis First Nation.

Sources say the plan calls for the Jockey Club to then lease back the racetrack portion of the property from Peguis and use proceeds of the land sale -- which has an estimated value of $50-$70 million -- to continue to operate live-racing at the province's only thoroughbred track.

The Downs is in an emergency cash crunch right now, having learned through the media at the end of January the province intends to unilaterally cut at least $5 million from the transfers it sends the MJC every year in next week's provincial budget.

The stakes involved are huge: The Manitoba Jockey Club directly employed 255 workers who earned $3.7 million in salaries in 2012 and an economic-impact study commissioned by the province in 2008 estimated at least another 200 Manitobans -- from trainers and grooms, to vets and farmers -- are indirectly employed by the Downs.

In all, the study -- by the firm PriceWaterhouseCoopers -- found horse racing in Manitoba pumps over $40 million a year into the Manitoba economy.

The proposed land sale is part of broader discussions between the MJC and Peguis officials that originally began last spring as a co-operative plan between Peguis and the MJC to build two hotels and a conference centre on the large portions of vacant property on the Downs site.

"I can definitely say that we are discussing the possibility of selling all our land out here to our partner, the Peguis First Nation," said MJC CEO Darren Dunn. "We are going to do whatever we can to ensure the future of live horse racing in this province."

The Peguis band is presently flush with cash, having received a historic $126-million land claim settlement from the federal government in 2011, and it was officials from the 8,600-member band who initially approached the MJC early last year about signing a memorandum of understanding to jointly pursue development on the Downs site.

"What we'd like to do is enter into a business arrangement with the jockey club," Peguis Chief Glenn Hudson said Friday. "Obviously, there's huge attractions out there, not only with the Downs, but also with the MTS (Iceplex) and the Red River Exhibition in the area.

"It's something we definitely see value in."

The plan to build the two hotels -- one, a high-end hotel with attached conference centre and the other a budget hotel aimed at families with children playing in hockey tournaments at the nearby MTS Iceplex -- is still in the works, with the Downs and Peguis recently issuing a request for proposals.

But the discussions between the two parties have now also broadened into sale negotiations of the Downs land after MJC officials found out in February that the provincial NDP government had decided to remove the track's 140 VLTs in what the MJC says is a bid by the province to deliberately bankrupt them and have the Red River Exhibition take over the operation of their land.

"It's certainly an option we will look at," Hudson said of the prospect of buying the Downs land and then leasing back the racetrack to the jockey club. "We want to develop economic development zones within and around the city and that is something we intend to pursue."

The highly secretive internal machinations that led up to the government's decision to hack the Downs budget -- which were conducted entirely without the knowledge of Downs management and which MJC officials say included the province possibly turning over confidential financial data to Red River Ex management -- are the subjects of both a lawsuit and criminal complaint to the RCMP filed by the MJC in recent weeks.

The lawsuit heads to court for a hearing on April 26, while the Mounties have said they are investigating the MJC's allegations that provincial Finance Minister Stan Struthers may have committed a breach of trust or even fraud in his handling of the Downs file and the government's plan to force the MJC to turn over their property to the Red River Ex.

Downs management says public assurances from Red River Ex management in recent months that they would not only continue to operate live thoroughbred racing at the Downs in the event of a takeover, but also add money-losing harness racing -- and do it all with about $5 million less in revenues than the Downs currently operates upon -- is absurd and simply a ruse to take over the valuable land upon which the Portage Avenue track sits.

A recent study found the Downs -- which has a highly desirable location at the intersection of the Perimeter Highway and the Trans-Canada Highway as it enters west Winnipeg -- currently has about 12,000 cars pass by every day and that number is expected to soar to 25,000-30,000 once all the construction on CentrePort is completed.

MJC officials say one four-hectare section of the 57-hectare Downs property was recently appraised at $5.5 million.

paul.wiecek@freepress.mb.ca

Republished from the Winnipeg Free Press print edition April 13, 2013 C1

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