'We are very excited': Amid record earnings, Arlington Park owner offers no update on track's sale
While Churchill Downs Inc. executives announced record earnings Thursday - including at Rivers Casino in Des Plaines - they provided no new updates on the sale of Arlington Park.
Chief Financial Officer Marcia Dall described the pending sale of the 326-acre racetrack site in Arlington Heights as an effort to "provide significant cash to reinvest in our business, to pursue strategic acquisitions, or to return to our shareholders."
The company and its Chicago-based real estate broker CBRE have been combing through proposals and offers since their June 15 deadline, after the land was announced for sale in late February. Among the bidders are the Chicago Bears and a group hoping to keep thoroughbred horse racing at the iconic oval.
"We have received numerous bids from interested parties for the land and are working through the process to select the final winning bid," Churchill CEO Bill Carstanjen told investors during a Thursday morning earnings call. "We will provide an update when we have selected the winning bidder."
The Louisville, Kentucky-based horse racing and gambling company also is selling property near its Calder Casino in Miami Gardens, Florida. It previously sold 61 acres of the former Calder Race Course to a developer for $26.5 million in 2016, after demolishing the grandstand in 2015. Last year, the final horse race was held by a group that was leasing the remaining oval from Churchill.
The Arlington and Calder property sales come as Churchill announced major investments in its flagship racetrack, Churchill Downs, as well as the nearby Derby City Gaming casino in Louisville.
The previously-announced $87 million Rivers expansion is on track for a phased opening, starting in early 2022, Carstanjen said. It will include new first and second floor gambling areas with slots and table games, a poker room, restaurant and events center.
In the second quarter of the company's fiscal year - covering April 1 through June 30 - Rivers set records for net revenue and adjusted earnings, helping the company as a whole have the best quarter in its history in those categories, Carstanjen said. Along with Miami Valley Gaming in Lebanon, Ohio, Rivers helped distribute $25 million of cash to the corporation's bottom line last quarter, as the casinos began operating under loosened COVID-19 restrictions.
"Collectively these capital investment projects are the building blocks that we believe will propel strong revenue and adjusted (earnings) growth over the next five years," Carstanjen said. "These building blocks are real and they're tangible. We continue to have a very strong balance sheet available with significant cash and liquidity. And with the near-term opportunity to monetize two significant properties - Arlington Park and the excess land at our Calder property - we are very excited."
Churchill's strong cash flow, along with "the potential to monetize underutilized assets," will allow the company to invest in growth opportunities, repurchase shares, and provide dividends to shareholders, Carstanjen said.
"We have a lot of opportunities that are in the execution phase, and we have the capacity to land more projects as they develop," Carstanjen said. "We think the horizon has never looked brighter for us."
Even before Churchill's 8 a.m. quarterly earnings call, one of the company's major critics, the Illinois Thoroughbred Horsemen's Association, released a statement decrying the company's apparent refusal to apply for 2022 racing dates ahead of the Illinois Racing Board's Friday afternoon deadline.
Arlington Park President Tony Petrillo told the Daily Herald Tuesday that the board sent Arlington an application, but the plan remains for this to be the final year of racing at the historic oval.
Mike Campbell, president of the association that represents horse owners and trainers, expressed hope Churchill would at least file a dates application to preserve the option for racing to continue there under new ownership. The horsemen are backing the plans of a group of developers and investors led by former track President Roy Arnold, who has proposed keeping the track and grandstand for live horse racing, while adding a mid-size sports arena, entertainment district, 300-unit housing development and industrial space.
"It's clear that Churchill Downs cares exclusively about corporate profit and that all other considerations are incidental," Campbell said. "All we can do in this case is hope that Churchill will recognize the utility, for the sake of its interest in selling Arlington Park to the most capable bidder, of filing the dates application to preserve the possibility of future racing at the track."