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Racing giant forms partnership with Beaver developer for track/gaming complex

Churchill Downs joins Hays venture

Wednesday, April 09, 2003

By Marylynne Pitz, Post-Gazette Staff Writer

One of the top names in thoroughbred racing is saddling up with Beaver County developer Charles J. Betters to build Pittsburgh Palisades Park in Hays.

Churchill Downs Inc. has agreed to be a partner and investor with Betters, Mike Ogburn, a Churchill Downs spokesman in Louisville, Ky., said yesterday.

Pittsburgh Palisades Park is a proposed $500 million, mixed-use development featuring a thoroughbred racetrack and gaming facilities, such as slot machines, in the Hays section of the South Side.

The 635-acre site is on a hill above Becks Run Road and East Carson Street.

Churchill Downs is best known for staging the Kentucky Derby, set this year for May 3. The race, first held in 1875, is the oldest continuously run sporting event in the United States.

The derby is the initial event in the Triple Crown, a series of championship races for 3-year-colts and fillies. It is followed by the Preakness Stakes and the Belmont Stakes.

"We would develop and manage the racetrack operation. Obviously, Mr. Betters is well regarded in the community as a developer," Ogburn said.

The partnership announcement will be made today at a news conference in the Downtown law offices of Buchanan Ingersoll. William R. Newlin, chief executive officer and president of Buchanan Ingersoll, represents Betters.

Churchill Downs Inc., Newlin said last night, is "absolutely the first-rate operator in the United States. They have a history as a public company of efficient and effective operation. We're very happy with this opportunity. We feel that we understand how they operate and the quality that they bring."

Added Ogburn: "We're in preliminary discussions to pursue this partnership opportunity. We've announced that we have signed a letter of intent to pursue that opportunity."

The partnership should help Better's chances of obtaining the sole remaining thoroughbred racing license in Pennsylvania. That's because one of the criteria for obtaining a license is demonstrating the ability and experience to operate a thoroughbred track.

Churchill Downs Inc., which owns a majority interest in six thoroughbred tracks in five states, has that experience.

"There is no more famous race than the Kentucky Derby or more successful track operator in the world, and we are extremely proud to have CDI as a prospective partner in this effort," Betters said.

Churchill Downs Inc., a publicly held company traded on Nasdaq, has grown by acquiring or building tracks. In 1994, it built Hoosier Park, a racetrack in Anderson, Ind., about 45 minutes outside Indianapolis.

Churchill Downs Inc. also owns Calder Race Course in Miami; Hollywood Park in Inglewood, Calif.; Ellis Park in Henderson, Ky.; and Arlington Park in Arlington Heights, Ill.

The company also owns off-track betting facilities in Illinois and Indiana.

Pennsylvania's current push to legalize slot machines at racetracks is a prime factor in Churchill Downs' decision to line up with Betters, Ogburn said.

Gov. Ed Rendell hopes to persuade the state Legislature to allow up to 3,000 slot machines at each of the state's three thoroughbred tracks and two standard-bred tracks. A sixth track, for thoroughbreds, is being built near Erie, and Betters and several other developers want the final license authorized in the state.

"Obviously, the potential of alternative gaming legislation is an attractive component of Pittsburgh Palisades," Ogburn said.

Another reason Churchill Downs is interested in partnering with Betters is because "it's a foothold in the Northeast market. We do not have any racetracks in that geographic region of the country," Ogburn said.

In thoroughbred racing, jockeys sit atop the horses. In standard-bred racing, the type offered at The Meadows in Washington, Pa., drivers ride in a sulky behind the horse.

Last year, the horse racing industry grew by 3.3 percent, based on the total number of dollars wagered, Ogburn said, adding that in the past five years, total wagering on racing has grown from $12.5 billion in 1998 to $15.1 billion in 2002.

Marylynne Pitz can be reached at mpitz@post-gazette.com or 412-263-1648.

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