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MI Developments Will Acquire Most Of
Magna's Assets, Including Pimlico, Under Plan
Delaware Bankruptcy Judge Mary Walrath yesterday “approved a plan that will allow Magna Entertainment Corp. to transfer the vast majority of its racing assets to its parent company and largest creditor, MI Developments,” according to Matt Hegarty of DAILY RACING FORM. Walrath approved the plan after “two days of testimony from supporters and opponents of the asset-transfer plan, which was submitted to the court in January.” Under the plan, Magna’s $400M debt to MI Developments “will be wiped out, and Magna will cease to exist.” MI Developments also “will take possession of Santa Anita Park and Golden Gate Fields in California, Gulfstream Park and Palm Meadows Training Center in Florida, Laurel Park and Pimlico Race Course in Maryland, the account-wagering company XpressBet, and the bet-processing company AmTote.” Opponents of the reorganization plan “had argued in court that MI Developments had undervalued the tracks and had failed to make good-faith efforts to sell the properties” so that company Chair Frank Stronach “could retain control.” Magna’s unsecured creditors “will receive at least $89[M] in cash from properties Magna has already agreed to sell.” The creditors, who were owed about $220M, will also receive $1.5M for “expenses related to the lawsuit, which alleged that MI Developments had agreed to loan Magna hundreds of millions of dollars even though it was already aware that the company planned to file for bankruptcy” (DRF.com, 4/26). The THOROUGHBRED TIMES’ Frank Angst noted MI Developments also “will pay more than $100[M] to other creditors, including those with claims against the Maryland Jockey Club.” Magna previously had “reached agreements to sell” Lone Star Park for $47.8M and Remington Park for $80.25M, both to Global Gaming Solutions RP LLC, a subsidiary of the Chickasaw Nation tribe (THOROUGHBREDTIMES.com, 4/26).
Land For New A's Ballpark, Road Improvements
Would Likely Cost More Than Estimated $70M
San Jose officials said that the cost to taxpayers for a proposed A's ballpark "would be small compared to what other cities have offered for stadiums -- probably a bargain-basement lease" for the team on "city land near the downtown train station," according to Tracy Seipel of the SAN JOSE MERCURY NEWS. But assembling the "complicated puzzle of land for the ballpark and related road improvements is sure to cost more than" the $70M estimated by officials who "tout the project as a major boost to downtown." San Jose's "challenge in many ways is much steeper than that of Santa Clara, which is working to bring" the 49ers to town. Having to "cobble together multiple parcels is forcing San Jose to pay millions to property owners." Even after "shelling out more than" $24M, the city "owns less than half the 14 acres earmarked for an A's stadium -- and it's not clear all the holdout want to sell." Redevelopment officials today will ask the city council to "approve another piece of the puzzle: a $4.6[M] cluster of nearby lots that would provide a thoroughfare to the ballpark site from Interstate 880." Still to come is a "third portion of land that agency officials need to complete the thoroughfare -- and which they concede they don't have the money yet to buy." While the redevelopment agency is "buying land for phase 1 of the extension, it has no immediate plans to buy a handful of homes or a book wholesaler that sit in the path of phase 2." Seipel noted an MLB committee in the next few months is "expected to recommend whether A's owner Lew Wolff should be allowed to move the team to the South Bay." The Giants are "trying to protect their territorial rights to Santa Clara County," which MLB granted to them in '92 (SAN JOSE MERCURY NEWS, 4/25).
Orlando Will Increase Charge For Nonprofits
To Rent Amway Center To $7,500 Plus Expenses
The city of Orlando yesterday "backed away from a plan to triple the rent" at the Magic's new Amway Center for "high-school graduations and events hosted by nonprofit groups," according to Mark Schlueb of the ORLANDO SENTINEL. The reversal came three days after the release of details of the city's proposal, "which would affect events at the city-owned arena when it opens" in October. The city currently charges $5,000 plus expenses "such as utilities, ushers and security," for nonprofit groups to rent out Amway Arena, and "had planned to increase the rent to $15,000 plus expenses at the new Amway Center." But Orlando Mayor Buddy Dyer's administration has "agreed to impose a smaller increase for graduations: $7,500 plus expenses per day." Orlando Venues Exec Dir Allen Johnson said that his staff would treat nonprofit groups "fairly when negotiating rental rates, but commissioners wanted that guarantee to be part of the legislation that was before them." Dyer said, "We're going to bring that back at the next meeting with some language that's been fully vetted." Meanwhile, Schlueb notes the plan to "raise the rent for promoters who bring concerts, the circus and other touring shows to the new arena will move forward." The maximum negotiated rent for those ticketed events is currently "about $50,000 at the smaller Amway Arena, but the maximum will increase" 30%, to about $65,000, at the new building (ORLANDO SENTINEL, 4/27).
Architel Holdings Claims Cowboys Stadium Staff
Used "Misleading" Tactics To Lease It A Suite
Dallas-based Architel Holdings said that the sales staff at Cowboys Stadium "used 'misleading' tactics and gave 'false' information to lease it a luxury suite, accusing them of going as far as claiming that it was the last one left," according to Sandra Baker of the FT. WORTH STAR-TELEGRAM. Architel Holdings, an IT outsourcing company, and its Founder, Alexander Muse, last season "leased a suite but never used it, and refused to make a $240,000 first-year lease payment because of what they call deceptive sales practices." Architel and Muse "made the allegations in a countersuit filed Friday in state district court in Tarrant County." Muse and his company are defendants in a lawsuit the Cowboys filed this year, "one of more than a dozen such actions filed to recover money from individuals and companies who stopped making lease payments on suites" at the stadium. The countersuit indicated that the stadium "ended up leasing the Architel-Muse suite" for the '09 season, but is "still seeking payment on the 20-year lease." Attorney Levi McCathern, who is representing the stadium, "called the counterclaim a case of buyer's remorse." McCathern: "It's disappointing people try to get out of their contracts like this. They're big boys. The contract is clear. They knew exactly what they were signing." Baker noted Muse and business associate Scott Ryan "found two other investors and signed the lease" after touring the facility in '08. But after Muse and Ryan "introduced the additional investors, the sales staff went behind their backs to get the new pair to sign a separate deal." As a result, Muse and Ryan "never took possession of the suite and demanded a refund" (FT. WORTH STAR-TELEGRAM, 4/24).
In New Jersey, John Brennan cites sources as saying that "more than a dozen Xanadu marketing and tourism executives were let go last week by project developer Colony Capital," including GM Gary Hanson. The "near-elimination of Xanadu's marketing department can be seen as further cost-cutting by the financially strapped worldwide developer -- or a sign that Miami Dolphins owner Steve Ross will soon invest hundreds of millions of dollars in Xanadu after months of negotiations with Colony Capital." Ross' Related Cos. has been "in talks all year about the possibility of providing all or part of the $500[M] deemed necessary to allow for completion of the 2 million-square-foot entertainment and retail project" (Bergen RECORD, 4/27).
Estimated Cost For New Univ. Of Minnesota
Baseball Facility Currently At $7.5M
COST REPORT: In Minneapolis, Patrick Reusse reports the estimated cost for a new Univ. of Minnesota baseball facility, including a "playing field, artificial turf, 3,000-seat grandstand, restrooms, concession area and press box," is $7.5M. That figure "would double with what athletic director Joel Maturi referred to as Phase II: locker rooms, batting cages, other practice areas for both baseball and softball." An artist's rendering of the prospective new baseball facility "carries the label, 'Siebert Field 2011,' which everyone admits is not a viable timeline for the on-campus ballpark." Reusse: "Siebert Field 2013 seems a much more realistic label" (Minneapolis STAR TRIBUNE, 4/27).
GRAND OPENING: In Indianapolis, Terry Hutchens reported Indiana Univ. Sunday dedicated Cook Hall, its new $20M, 67,000-square-foot basketball practice facility. The facility includes Legacy Court, a "shrine to IU men's and women's basketball," and there are "touch-screen interactive displays that feature teams through every decade with photographs and video content" (INDIANAPOLIS STAR, 4/24).