MI Developments

MI Developments
MI Developments Inc. (MID)
Type Public (NYSE: MIM, TSX: MIM)
Industry Horse Race Tracks
Headquarters Aurora, Ontario, Canada
Key people Frank Stronach
Employees 5,300[1]
Website www.midevelopments.com

MI Developments Inc. (NYSE: MIM, TSX: MIM), formerly known as Magna Entertainment Corp., is a gambling and horse racing company in North America with several holdings in Europe and Australia, and is North America's largest thoroughbred racing company, based on revenue and holdings.[2] As of March 5, 2009, the company had entered Chapter 11 bankruptcy.[3]

Contents

History

Magna Entertainment Corporation (MEC) was created in 1999 by parent company Magna International Inc. Magna International, a major automotive supplier based in Ontario, Canada, underwent a corporate reorganization in which its non-automotive businesses and interests were transferred to MEC. In March 2000, Magna International distributed shares in its new division to its current stockholders, establishing MEC as a separate public company.[4] Recently, Chairman and CEO Frank Stronach's dream of building a racing empire came crashing down when Magna Entertainment filed for Chapter 11 bankruptcy.

MI Developments Inc. today

MI Developments Inc. currently owns or manages racetracks in North America, and one racetrack in Austria, including many thoroughbred tracks and two mixed (thoroughbred and standardbred) tracks. MI Developments Inc. also operates the simulcasting venues at these tracks, as well as OTB (Off-track betting) facilities.

Other ventures include XpressBet, a wagering business that allows customers to wager on over 100 horse racing tracks via internet or telephone, and Horse Racing TV, a premium television network featuring racing both MI Developments Inc. tracks and other participating tracks.[2] In 2007, Magna sold 50% of Horse Racing TV to Churchill Downs Incorporated.

MI Developments Inc. also owns thoroughbred training facilities in conjunction with its racetracks in California, Florida, and Maryland, and owns and operates facilities that manufacture a straw-based bedding product, StreuFex.[2]

MI Developments Inc. has recently moved to add additional gaming attractions, such as slot machines, to several of its tracks. In 2004, voters in Oklahoma approved legislation that allowed MI Developments Inc. to add slot machines at Remington Park racetrack in Oklahoma City. Remington Park opened its casino, featuring 650 Class II gaming machines, in November 2005.[5] Gulfstream Park in Hallandale Beach, Florida, followed suit in November 2006, with 516 slot machines and poker.[6] Magna Racino in Austria also features alternative gaming.

In 2006, MI Developments Inc. completed its purchase of AmTote International, who provide totalizator services to the horse racing industry. On March 23, 2010 an agreement was reached to sell the two Maryland Jockey Club tracks (Pimlico and Laurel Park) from Magna Entertainment Corporation to its parent company MI Developments. MI Developments will receive the tracks from M.E.C. in exchange for paying $25 million in cash for claims to Maryland Jockey Club creditors and $89 million to other creditors through a new reorganization plan. The U.S. Bankruptcy Court in Delaware, has until April 30 to approve Magna's reorganization plan.

Owned racetracks and assets

MI Developments Inc. owns the following tracks in order of acquisition date:[7]

Race tracks

  • Santa Anita Park, Arcadia, California. Acquired in December 1998 for $126 million.
  • Gulfstream Park, Hallandale Beach, Florida. Acquired in September 1999 for $95 million.
  • Golden Gate Fields, Albany, California. Acquired in December 1999 for $87 million.
  • Portland Meadows, Portland, Oregon. Acquired in October 2001 for $4.78 million (80% of $5.97 million package).
  • Pimlico Race Course, Baltimore, Maryland. Acquired 51% in November 2002 for $117.5 million (as part of MJC package) and an additional 20% for $18.3 million in September 2007.
  • Laurel Park Racecourse, Laurel, Maryland. Acquired 58% in November 2002 for $117.5 million (as part of MJC package) and an additional 20% for $18.3 million in September 2007.

Other assets

  • AmTote International, Hunt Valley, Maryland. A leading totalisator service provider with technological advancements in the pari-mutuel wagering industry. Magna acquired 30% for $3.82 million in August 2003 and acquired the balance of 70% in July 2006 for $14 million.
  • Bowie Race Track, Bowie, Maryland, ceased racing operations in July 1985 prior to Magna's acquisition, the track now serves as a training center for Thoroughbred racehorses.
  • Maryland Turf Caterers, Inc., Baltimore, Maryland. Acquired the caterers for $12.1 million in September 2005. MTC conducts on or off-premise catering services and also operate the Food & Beverage operations at Pimlico and Laurel.[8]
  • Palm Meadows Thoroughbred Training Center, Boynton Beach, Florida, built at a cost of $90 million on 304 acres (1.23 km2). The center opened in November 2002 as the largest training center in the United States.
  • Xpressbet, Washington, Pennsylvania, was launched by Magna in March 2002 is a legal, licensed, U.S.-based account wagering provider that offers pari-mutuel wagering on thoroughbred, harness and quarter horse racing events either online or by telephone.
  • Horse Racing TV or (HRTV), Arcadia, California, is a 24- hour digital cable channel that is dedicated to the world of horses providing up 15 hours per day of live racing. Magna sold a 50% share of HRTV to Churchill Downs, Inc in March 2007 for $13 million.
  • TrackNet Media, Louisville, Kentucky, is a media company owned by Churchill and Magna that acts as a horse racing content provider and it negotiates Advance Deposit Wagering contracts and simulcast agreements with racetracks, including those owned by Churchill or Magna.
  • STREUfex, Finley, New South Wales, Australia. A company that manufactures Horse Bedding, the latest innovation in horse bedding made from pelletised straw. A market leading product in the US.
  • 800 acres (3.2 km2) of land, in Porter, New York. Magna is attempting to sell the land where they had proposed to build a track. The asking price is believed to be $960,000.
  • Dixson Downs, Dixon, California. Acquired in December 2000 Magna bought 260 acres (1.1 km2) of land approximately 20 minutes west of Sacramento off I-80.
  • The Village at Gulfstream Park, Hallendale Beach, Florida. Magna owns 50% interest (in conjunction with Forest City Enterprises) of the first phase of the development, scheduled for completion in February 2010, there will be more than 70 specialty shops, restaurants and outdoor cafes. Office space will also be available above a portion of the retail buildings.

Former MI Developments Inc. or MEC assets and racetracks

  • Bay Meadows Racetrack, San Mateo, California (near San Francisco); Magna acquired (racing and operating rights) in August 2000 for $24.1 million, agreement expired in December 2004.[9]
  • Flamboro Downs, Hamilton, Ontario. Acquired in June 2002 for $46.2, sold to Great Canadian Gaming Corp. for a total of $63.9 million in August 2005.[10]
  • Maryland-Virginia Racing Circuit, New Kent, Virginia. Sold simulcast rights of the Virginia track Colonial Downs to Colonial L.P. for $9.8 million in September 2005 who will have the use of the Colonial Downs signal in both domestic and international distribution network.[11]
  • Multnomah Greyhound Park, Salem, Oregon. Magna acquired (racing and operating rights) in October 2001 for $1.2 million (20% of Sale of Portand Meadows sale totaling $5.97 million), agreement expired in September 2005.
  • The Meadows Racetrack, North Starbane Township, Pennsylvania near Pittsburg; Magna acquired in April 2001 for $53 million, sold to Millenium Gaming, Inc. for a total of $225 million in November 2006. Magna has agreement to manage racing operations for 5 years.[12]
  • San Luis Rey Downs Training Center, Bonsall, California a 205-acre (0.83 km2) horse racing training facility that was sold by Magna in June 2007 for $24 million to M.I. Developments which plan to make residential developments within three years.
  • Great Lakes Downs, Muskegon, Michigan. Acquired in February 2000 for 267,000 Shares of Class A Voting Stock in Magna Entertainment. Magna had closed the track in November 2007, and sold the property to the Little River Band of Ottawa Indians in July 2008 for $5.9 million.[13] The tribe is redeveloping the property, with plans to build a casino.
  • Magna Racino, Ebreichsdorf, Austria. Built and opened in April 2004, Magna has agreed to sell to Fair Enterprises Limited for $9.8 million in July 2009 (sale has not formally closed yet).
  • Remington Park, Oklahoma City, Oklahoma. Acquired in for $10 million in February 2000, Magna has agreed to sell to Global Gaming, RP (owned by the Chickasaw Nation tribe) for $80.25 million in September 2009 (sale has not formally closed).
  • Ocala Meadows, Ocala, Florida. Magna has agreed in September 2009 to sell 490 acres (2.0 km2) near interstate I-75 for $8.1 million (sale has not formally closed).
  • 218 acres (0.88 km2) land, Romulus, Michigan. Magna purchased this property in September 2002 and sold it some time in 2008 for $28 million.
  • Thistledown Racecourse, North Randall, Ohio. Acquired in October 1999 for $14 million, sold to Harrah's Entertainment in September 2009 for $43 million (sale closed 07/28/10).
  • Lone Star Park, Grand Prairie, Texas. Acquired in October 2002 (Owns racing and operating assets) for $100 million has agreed to sell to Global Gaming, RP (owned by the Chickasaw Nation) for $27 million in September 2009 (sale has been delayed by the Delaware bankruptcy judge due to a competing bid by Penn National Gaming.[14])

References

  1. ^ "Company Profile for Magna Entertainment Corp (CA;MEC.A)". http://zenobank.com/index.php?symbol=CA;MEC.A&page=quotesearch. Retrieved 2008-10-15. 
  2. ^ a b c [http://www.magnaent.com/AboutMEC/Overview/ MEC Overview
  3. ^ "Money & Company". Los Angeles Times. http://latimesblogs.latimes.com/money_co/2009/03/magna-santa-ani.html. 
  4. ^ MEC History
  5. ^ Casino Opens at Remington Park
  6. ^ Magna Entertainment Corp. - Press Release
  7. ^ MEC Tracks
  8. ^ P.R. Newswire website, June 30, 2006;http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=ind_focus.story&STORY=/www/story/08-02-2006/0004409232&EDATE=WED+Aug+02+2006,+06:44+PM.
  9. ^ San Francisco Chronicle website, September 3, 2004;http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/09/03/SPGLK8IS701.DTL.
  10. ^ National Horsemen’s Benevolent and Protective Association, Inc. website, August 17, 2005;http://www.hbpa.org/newsdisplay.asp?section=3&key1=5415.
  11. ^ Bloodhorse website, August 19, 2005; http://www.bloodhorse.com/ArticleIndex/article.asp?id=29579.
  12. ^ Magna Entertainment Corp. - Press Release
  13. ^ Stockhouse, Taking it to the Street website, May 15, 2000;http://www.stockhouse.com/bullboards/MessageDetail.aspx?s=mie.a&t=list&m=1488758&l=0&pd=0&r=0.
  14. ^ Sale of Texas track to Chickasaws hits snag;http://www.dallasnews.com/sharedcontent/APStories/stories/D9BB3R181.html.

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