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Will the spa suffer?

Will The Spa Suffer?

A $110-Million Thoroughbred Track In Dallas May Hurt Hot Springs Tourist Trade

Jerry Baker has a dream.

As vice president of the Dallas-Fort Worth Racing Corp., Baker wants to build a Class I, $110-million, contemporary thoroughbred track about 12 miles southwest of downtown Dallas.

Bob Haupt has a nightmare.

The chairman of the Hot Springs Advertising and Promotion Commission fears the awakening of a sleeping giant in Texas. He shudders at the thought of a top-notch racing facility that brings top-notch horses to the northeastern part of the Lone Star State and -- Haupt's biggest worry -- keeps Dallas tourists in Dallas.

"It's very, very threatening to us," Haupt says. "When Oklahoma got thoroughbred racing (opening in direct competition with Oaklawn Park in 1989), it took 75-plus percent of our Oklahoma City business that first year.

"Now, Dallas. Outside of the state of Arkansas, Dallas continues to be the largest (tourist) market for Hot Springs."

Does Haupt hear an intimidating yawn southwest of the Arkansas border?

"They certainly have a large monster to be fed down there," he says.

Although Texas voters approved pari-mutuel racing in 1987, following a 50-year ban on the sport, only recently have big-money horsemen gotten out of the starting gate.

Now, they are ready to run.

What has spurred optimism is a piece of legislation signed into law June 7 by Gov. Ann Richards. The act reduces the state's share of parimutuel takeout to as low as I percent.

The takeout in Arkansas was reduced from 5 percent to 2.5 percent in 1989.

With that, Baker's group and one led by noted Dallas businessman Preston Carter, former president of the Texas Horse Racing Association, quickly lined up to apply for licenses.

There will be others.

The Texas Racing Commission, the state's governing body for parimutuel racing, already has received applications for Houston and San Antonio tracks. It will decide on those licenses later this summer and Dallas licenses in the fall.

The investors are trying to cash in on the suddenly proven success of Texas racing.

That's right, proven success.

Born this spring, Dallas-Fort Worth racing has been transformed into a booming business by hungry Texas bettors.

Not Pretty, But Effective

Trinity Meadows Raceway opened May 30 in Willow Park, Texas, 19 miles west of downtown Fort Worth. It was built at an estimated cost of $14 million.

One will not find an enclosed grandstand, a restaurant or a paved parking lot at Trinity Meadows.

It is located in a dry county. Patrons may purchase alcoholic beverages only after forking over $3 for a club membership.

But Texans have packed the place -- lack of air conditioning, water problems, poor rest rooms and so-so horse flesh notwithstanding.

During its first month of existence, Trinity Meadows attracted a daily average attendance of 8,274 and twice went over the $1-million mark in mutuel handle. That $1-million mark is considered the measuring stick for racing success.

"All the speculation on whether or not people would support a track in Texas is no longer speculation," says Mike McAbee, marketing director for the Class II track.

Confidence is running neck and neck with cockiness at Trinity Meadows.

Plans are to make $1 million in improvements, apply for Class I status and hold a 214-day meeting next year.

The meeting would open the first weekend in March and run through December.

Oaklawn's 63-day 1992 meeting is scheduled for Jan. 24-April 18.

Remington Park at Oklahoma City has similar dates. Louisiana Downs at Bossier City, La., opens a week after Oaklawn closes.

Get the picture?

"We would be head-on with Oaklawn, Louisiana Downs, Remington Park, everybody," McAbee admits. Can the Texas track survive that kind of competition?

"Oh sure," he says. "There are 5 million people within 100 miles of the track. We've proven already that they will stay home and see racing if it's available to them."

That is bad news for Hot Springs retailers, hotel owers and restaurant owners.

Oaklawn likely can survive on its 86-year tradition, dedicated clientele and ever-expanding simulcast program. A probable push to lower the state takeout to 1 percent and a management team widely regarded as one of the industry's best also will help.

But the lifeblood of the resort city is tourists who stay overnight, not Arkansans who come to Oaklawn for the day. And Texans represent a large portion of those overnight tourists.

More competition for the out-of-state dollar is not viewed kindly.

Look at Remington's effect on the city. The neighboring track may not have stolen Oaklawn's thunder, but it stole a few visitors when it first competed directly in 1989.

Check-ins from Oklahoma visitors in March 1989 at two prominent Hot Springs hotels dropped by 64 percent from the year before.

Fingers pointed directly toward the new kid on the block.

DeBartolo's Jewel

Remington was built at an estimated cost of $97 million by shopping mall magnate Edward J. DeBartolo Sr., who also owns Louisiana Downs and Thistledown near Cleveland.

Opened in August 1988, Remington tackled Oaklawn the following spring.

Remington seemingly had it all: a modern facility set in a sizable market, a futuristic, all-weather "Equitrack" surface that was supposed to eliminate poor racing conditions and an owner with deep pockets and a deep-seated grudge against Oaklawn President Charles J. Cella.

Coming up on its third birthday, Remington still stands as perhaps the sport's most modern racing complex. But "Equitrack" is being replaced with dirt, and DeBartolo has patched up his differences with Cella -- at least publicly.

So Oaklawn has weathered the storm of direct competition from the west.

Some merchants have, too.

Renee Tompkins, manager of the Park Hilton Hotel on Malvern Avenue, says many of those who initially opted for Remington over Oaklawn have come back to Hot Springs.

Gift shop owner Bill Goodwin says, "Everybody thought Remington would be the demise of Hot Springs, but it wasn't."

After all, Goodwin says, Oklahoma City does not offer the lakes, baths and history.

Still, the numbers show that, while some Oklahomans have returned, many are not staying long.

The hotel occupancy rate of Oklahomans during March was up 17 percent from 1989 but down 57 percent from 1988.

"If they get a track in Texas, and they will get it, it will be devastating if what happened in Oklahoma was any indication," says Monty Scott, co-owner of the Arlington and Majestic hotels, two of Hot Springs' most historic buildings.

Will Texans Stay Home?

The number of Texans staying in Hot Springs hotels has held steady for most of the past decade, showing a slight decline in 1989, perhaps another fallout from Remington's opening.

During the past two years, Haupt says, the number of Texas tourists has increased. Most are from Dallas.

Arlington-Majestic Manager Horst Fischer estimates 70 percent of Texas arrivals are from the Dallas-Fort Worth area, regardless of what month it is.

Haupt believes a competitive Dallas track could result in "a vulnerability of up to 20-25 percent of hotel occupancy during the racing season."

If Big D gets a big track, will Hot Springs indeed be the one that pays for it?

With the change in the tax laws, a Dallas track seems inevitable. Even Oaklawn officials are resigned to the fact.

Chick Lang Jr., Oaklawn's administrative director and head of simulcasting, has been monitoring the situation carefully.

A racing fan from a racing family, Lang is torn between a desire to see the sport grow and a desire to protect Oaklawn's turf.

"We're concenred about any racetrack anywhere," Lang says. "My first concern is for Arkansas and Arkansas racing. Looking at the big picture, I like to see racing succeed.

"The state of things at Ak-Sar-Ben (at Omaha, Neb.) is not healthy. Canterbury Downs (at Shakopee, Minn.) is cutting purses."

But Texans, as Texans are wont to do, are boasting of their racing-rich environs.

It may be no idle boast.

"The general feeling is that if a major track is built in Dallas-Fort Worth and projected properly, it can't fail," says Lang, whose father, Chick Lang Sr., was a consultant for Texas racing. "I don't know how it will affect us. Our season is clearly defined and set.

"I'm sure it would affect us somewhat. Trinity Meadows shows there is a market that is really crying (for racing). It's kind of like, |If you build it, they will come.'"

It will be built.

Baker believes his corporation is the odds-on favorite to be granted a license, although money problems have hounded Dallas-Fort Worth Racing Corp. from the start.

Yet Carter has hopes of opening a $50-million-plus facility by the spring of 1993.

Baker is aiming for the spring of 1994.

Two Class I tracks may be built in Dallas, Tarrant (Fort Worth) and seven adjacent counties, according to Texas racing statutes.

If Baker gets his way, he will build a "Remington Park-like" facility with a live meet lasting 200 days per year. He expects a daily average attendance of 12,000 (Oaklawn averaged 17,308 in 1991) and a per capita handle of at least $100.

Baker's baby will have 15,000 enclosed grandstand seats, three levels of skyboxes and 1,800 table seats.

A family atmosphere is what he craves.

The Other Tracks

In San Antonio, Joe Straus Jr. and his brother, David Straus, of the Retama Park Association have applied for a Class I license to build a $56-million track in a northeast suburb of the city.

Jerry Carroll, owner of Turfway Park at Florence, Ky., also is an investor.

The state's first Class I license is expected to go to the Houston area when the Texas Racing Commission meets Aug. 12.

Investors in Sam Houston Race Park Ltd. include Robert P. Levy, chairman of Atlantic City Race Course, and James J. Murphy, president of the same track. The open-air facility is expected to cost a little more than $50 million.

According to Angie Roberts, information specialist for the Texas Racing Commission, two applications for Class I tracks in the Houston area and one in the San Antonio area have been submitted.

The application period for investors seeking a license to build a Class I track in Dallas or Fort Worth runs from Nov. 3 through Dec. 31.

It's likely that Carter and Baker will have company. While Houston and San Antonio are considered healthy markets, Dallas is the plum.

"Certainly, the DFW metroplex, with more than 4 million people, can handle a Class I facility," Baker says.

Oaklawn officials believe they have two major advantages over any potential Class I tracks in Dallas -- Oaklawn is paid for, and the product is established.

"When we race, we have the finest racing in the country," Lang says. "Hypothetically, when they build a (Class I) racetrack in Dallas-Fort Worth, it will take many years for it to even begin to compete in quality and purse money, if ever."

Baker admits as much.

"A Class I track in Dallas will not have a negative impact on Oaklawn," Baker says. "No matter what we do, we can't buy 75 years of tradition.

"And Hot Springs is not just racing. There's a lot more to enjoy."

As Haupt puts it, Hot Springs has two major attractions -- Oaklawn and water.

The baths, shops and theme parks are amenities.

Since water, obviously, is a constant, merchants ride the Oaklawn roller coaster.

"Oaklawn makes its living based on handle, wagers," says Haupt, the former manager of the Park Hilton. "That's how they make a profit. However, from a hotel and restaurant standpoint, we don't care about handle. We care about attendance."

Haupt has devised a formula based on Oaklawn attendance to gauge hotel business. By his calculations, about 5 percent of the track's attendance translates into hotel rooms.

There are about 2,500 hotel rooms in Hot Springs, roughly 1,800 of which are "significant" hotel rooms, according to Haupt.

If 30,000 people attend the races at Oaklawn, the hotels should be 75-80 percent occupied.

It's a correlation that cannot be ignored.

Like it or not, the hotel and restaurant business at Hot Springs has an umbilical cord connected to Oaklawn.

Traditional Vacation Spot

Bill Goodwin visited Hot Springs 18 years ago from his native Atlanta.

The visit turned into a lifetime.

"I fell in love with it," he says. "I chucked everything and moved to Hot Springs."

He opened Goodwin's Gifts on Central Avenue, the same street on which Oaklawn is located. He also purchased part of the National Park Aquarium near the Arlington.

It's his hope that Dallas tourists who have made a trip to Hot Springs an annual tradition will not change their plans when they have their own version of Oaklawn down the street.

"It's a tradition to come to Hot Springs," Goodwin says. "A lot of people come to have fun in Hot Springs, and racing is just part of the package."

About 30 percent of Goodwin's customers come from east Texas, he estimates.

"We get Texas people in the summer without racing," he says.

And that comes from a self-proclaimed racing fan.

Not long ago, Goodwin was a daily Oaklawn visitor. Business obligations have caused him to cut back, but he still attends as much as possible.

The success of Trinity Meadows caught his attention.

"A friend of mine was down in Dallas," Goodwin says. "He was talking about it. They say it's just packed. But that will never attract the real horse fans.

"It may get a few pure bettors, pure gamblers. But tourists come here to have fun in the city as much as at the racetrack."

Is the answer then to sit still?

Let Hot Springs and Oaklawn stand on their established merits, the $110-million racetracks be damned?

Yes and no, say those directly involved in the city's tourism industry.

Haupt and Scott insist that more of a cooperative marketing effort between the track and city is needed.

Don Raulie, executive director of the Hot Springs Convention & Visitors Bureau, says a marketing strategy will be formulated well before the Texas giant comes to life.

"We are doing that even now," Raulie says. "[But it's not done in anticipation of (a Dallas) track. The tourism business is an extremely competitive business.

"This year, there is a new track in Dallas-Fort Worth. But other major attractions have popped up in this part of the country, attractions that have zeroed in on what we think is our business."

Raulie points to The Great American Pyramid, an arena under construction along the banks of the Mississippi River at Memphis, Tenn. It might change the schedule of a few Memphians who otherwise would have driven to Hot Springs.

So too might a Dallas track.

But only a few visitors will be lost, says Raulie, basing his prediction on the lure of a resort city tucked between mountains and lakes -- and the strength of Oaklawn.

"If they build a big track in Dallas, it will bleed some fans from us," Lang says. "But because of our locale -- being in a tourist town -- and our reputation, it won't be many.

"We do what we have to do. They do what they have to do. Let the chips fall where they may."

Lang recently read a remark by a Texas horseman who said Texas racing could put Louisiana Downs and Oaklawn out of business.

"He's full of crap," Lang says.

But the market is changing.

The Lone Star giant is rubbing the sleep from its eyes.

How will Texans react?

"If they're looking to go bet for a day, sure, they'll drive 20 minutes instead of five hours," Raulie says. "But if they're looking for a weekend vacation, to get out of town, they'll still come here."

Hot Springs is betting on it.

PHOTO : FAST START: Since opening May 30, Trinity Meadows Raceway near Fort Worth has drawn Texas bettors and Texas money by the thousands, surpassing expectations for the Class II thoroughbred track. Still, the small facility is viewed as no threat to Hot Springs' established Oaklawn Park.

PHOTO : LONE STAR RACING: At least two groups will apply for licenses to operate a Class I thoroughbred track in the Dallas-Fort area, considered fertile grouond for pari-mutuel betting.
COPYRIGHT 1991 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Dallas-Fort Worth Racing Corp.'s plan to build a thorough-bred track in Dallas
Author:Webb, Kane
Publication:Arkansas Business
Date:Jul 22, 1991
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