After nearly a year of legislative chess moves over the fate of the fire- ravaged Arlington Park Race Track, Gov. James Thompson and the track`s owner Monday unveiled plans for a new ”world class” track as part of $1.3 billion in suburban development projects and the revitalization of the horse racing industry.
Government and racing officials said the ambitious proposal, if carried out, would substantially change the economic and demographic nature of two suburban areas.
A $674 million racetrack and equestrian complex would be built on 1,700 acres near the tiny town of Old Mill Creek at Ill. Hwy. 173 and Hunt Club Road, just west of the Tri-State Tollway in Lake County.
Northwest suburban Arlington Heights, which stands to lose its 58-year-old landmark, was offered a hefty consolation prize in the form of a $625 million commercial development to be built on the existing 325-acre racetrack site.
To undertake the plan and for it to work, its proponents maintain, the legislature must pass tax incentives for the racing industry in Illinois.
Ending several days of speculation, Thompson and Arlington Park owner Richard Duchossois announced the details of their newest gambit in a series of press conferences that showed off some of Duchossois` impressive line-up of politically influential knights and bishops.
Duchossois showed that he had paid close attention to appeasing the concerns of nearly all those affected by the plan.
Among his knights and bishops are a few with strong ties to House Speaker Michael Madigan (D., Chicago), who has led the opposition to Duchossois` plans from the other side of the board.
Madigan scuttled a proposed tax incentive package for the horse racing industry backed by Thompson and Republican legislators last fall, not long after the racetrack`s clubhouse and grandstand were destroyed in a July 31 fire.
Thompson and Duchossois cautioned that the entire proposal could still be jeopardized if the legislature fails to approve a new tax package that the governor has suggested but which has not been set before the General Assembly. Duchossois` plans, announced at press conferences in Chicago, Arlington Heights and Waukegan, envision a massive racing compound on the Lake County site near the Wisconsin border. The Barrington Hills industrialist and horse breeder said he hoped to break ground by September and open the new track by May, 1988.
The 450-acre horse racing complex, larger than the site in Arlington Heights, would be surrounded by a resort and conference center hotel, an 18-hole golf course to be designed by Arnold Palmer, residential compounds linked by bridle paths, a 155-acre research and office park and specialty retail stores, Duchossois said. The development would have an equestrian setting.
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The complex would create 7,000 permanent jobs, he said, and $10.5 million in local tax revenue annually.
Duchossois also detailed plans to erect a regional cultural and performing arts center on the Arlington Heights track site that would include a 6,000-seat outdoor amphitheater he compared to the one in Ravinia Park in Highland Park. There would also be a 300-room hotel and a business and office park.
That project would create an estimated 9,700 permanent jobs, Duchossois said, and $30.8 million in annual local tax revenue, many times the $1.5 million in revenues generated by the track.
Thompson and Duchossois were joined at the press conferences by an array of business and labor leaders, including Robert Gibson, president of the Illinois AFL-CIO, and Lester Brann, president of the Illinois State Chamber of Commerce.
The new development was drawn up by Heartland Development Co., which is owned by the politically connected James McHugh Construction Co. McHugh has employed Speaker Madigan`s law firm.
James McHugh, president of the firm, is also a major fundraiser for Thompson. His brother, Jack, vice president of the firm, is president of the Chicago Park District board.
The president of Heartland is John Kramer, a longtime Thompson protege, former secretary of the Illinois Department of Transportation and former executive director of the ill-fated Chicago World`s Fair 1992 Authority.
Public relations for the project is being handled by the Chicago firm of Jasculca-Terman & Associates, which has ties to several prominent Democrats, including former U.S. Sen. Adlai Stevenson.
Legislative sources speculated that the high-powered team working on the project could help it through the legislature, although key legislators on the tax measures took a wait-and-see stance.
House Democrats, including Madigan, ”will scrutinize the plans as closely as we did the World`s Fair proposals,” said Rep. John Cullerton (D., Chicago), chairman of a special House committee on horse racing. ”If it proves to be a valuable asset to our state, so be it.”
Madigan also led successful efforts to scuttle state funding for the fair.
Cullerton said that a racetrack tax-package would have to be tied to Democratic-drafted legislation that would authorize the Illinois Racing Board to require that horses be held in detention barns for as long as five hours before a race, that horses be tested to detect illegal drugs and that parimutuel clerks and other track employees be licensed.
The legislation has passed the House and is pending in the Senate.
Cullerton said Duchossois and a new track would get roughly $3 million a year in incentives from the tax breaks that Thompson has proposed at a total cost to the state treasury of $23 million.
”I can hardly see that whether or not he gets a $3 million tax break will be the determining factor in a $1.3 billion proposal,” Cullerton said.
”He can still go ahead with his proposal in Arlington Heights, and he can still build estates in Lake County.”
Madigan plans to wait until more meetings between track owners, horsemen, legislators and other interested parties are completed before he takes a firm position, according to Steven Brown, his press secretary.
Thompson has proposed reducing the parimutuel tax from an average 6.75 percent to 2 percent; eliminating the state`s share of ”breakage,” the money remaining when a bettor`s payoff is rounded down to the next 20-cent increment; and allowing the tracks to impose a 1 percent surcharge on winning bets.
The governor said that because of the two new developments, the state would receive ”significant new local and state tax revenues.” In return, he said, proposed legislation, if passed, would reduce amounts paid by the horse racing industry for the parimutuel tax.
The loss of revenue would be ”more than offset,” Thompson said, through the injection of the $1.3 billion in development funds, along with the state and local taxes derived from the new construction. Those results apparently met Thompson`s condition that any revenue loss from tax breaks would have to be made up elsewhere.
Although both Thompson and Duchossois would not say outright that the projects are dependent on the tax breaks, Duchossois said that if the proposed tax break measure failed, ”we would have to go back to the drawing boards.” Thompson said that he ”cannot conceive of the measure failing.”
Arlington Heights officials, who campaigned hard to retain the track, greeted the proposed commercial-residential development with caution. Officials feared the ambitious plans could take 10 years to complete.
”In the short run, there certainly will be a loss,” said Arlington Heights Village President James Ryan. ”Yet this development can represent a significant economic opportunity for Arlington Heights.”
Arthur Gollberg, co-chairman of a citizens group that collected 50,000 signatures last year calling for retaining the track in the village, said that residents would object to the density of the planned commercial development.
The fire ravaged the northwest suburban landmark and stunned local residents, who feared its loss could cause major economic problems for local business through the loss of 2 million annual visitors. However, the business loss failed to materialize, and the slight loss of tax revenue had little impact on the village.
The fire also touched off a political game of chicken in which Duchossois said that he might build a new track in another state if a package of tax incentives for racing was not approved by the Illinois General Assembly. Democrats, led by Madigan, called his bluff by rejecting the package.
Duchossois, however, held onto his Wisconsin option, even though getting horse racing legalized there faces sizable legislative hurdles.
The tone at the press conferences Monday was one of harmony and optimism, and the introduction of the developers working with Duchossois raised speculation that the tax package would have much more powerful political backing this year in the legislature.
”Dick Duchossois is to be commended for engineering this privately financed project, because he could have easily packed his financial bags after last summer`s fire and either not rebuilt or taken his racetrack to another state,” Thompson said.
”Instead, he had faith in Illinois. This is a project that is larger than anyone could have imagined a few months ago. For that faith, he has our thanks,” Thompson said.
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No one may feel the ramifications of the track proposal more closely than the 103 residents of Old Mill Creek, where neighbors realized that property values would likely soar at the same time that the country atmosphere of the area may be threatened.
Lake County Planning Director Robert Chave said the project would get a
”very thorough look” from county and local officials, but he added that initial reaction was positive.
One Old Mill Creek resident, James Kelly, said he had already collected signatures from 26 residents opposing the project. ”It`s going to bring in every gambler; it`s just going to ruin it,” he said.
Yet others warmly greeted the news that the massive complex was earmarked for their dirt roads and pastures. ”It`s going to change the entire community,” said Joseph Purves, who has lived on 30 acres at the edge of the track site for 21 years. ”I`m tickled to death. ”
Irene Huhnstock, who has lived for eight years in an old farm house on Ill. Hwy. 173 across from the proposed development, said news of the development may change her plans to move from the area.