Commentary: The Future of the Albany Track: Park? Casino? Housing? By TONY CAINE

Tuesday September 06, 2005

Albany has been hosting a huge urban gambling operation on its waterfront for 60 years, maintaining one of the lowest bay area crime rates while deriving up to 20 percent of its budget from the racetrack. In recent years the track’s usefulness has faltered as patronage and income dropped. Part of our community prefers a park in place of the track and another part is mainly interested in increased income from the site. Some of our politicians seem to think the track will die a quiet death if we just leave things alone.  

This may be true of other tracks but is unlikely for ours. Taking a passive approach could cause an undesirable outcome. Magna stands to make a lot more money by hanging onto the land than by selling it under the current zoning. As long as the zoning is locked by Measure C, the value of Magna’s property would likely be depressed by $100 million or more. It would be in their interest to write off cumulative losses of 10, 20, or even 40 million dollars by continuing to operate the track for 20 or more years if there is a good possibility of eventually gaining full value by rezoning or adding slot machines. This could happen in several ways. Political tides can rapidly shift. The failure of the slot machine initiative two years ago does not mean that a future one cannot succeed. Many states now allow slot machines at racetracks and the number keeps increasing. We could easily end up with a racetrack and a casino and no park, ever. It is also possible that horse racing could come back from the dead, like bowling did, making it much more difficult to negotiate with Magna for track closure. 

Alternatively, Magna might actually close the track and put a chain link fence around the property, depriving Albany of $800,000 in income while hanging onto the land relatively inexpensively, letting it appreciate until political and economic events fall their way. Do not assume that Albany would have the resolve hold out forever, particularly if a recession hits or the housing bubble pops. In the early ‘90s Albany prices dropped 15-20 percent. We would then be negotiating from weakness. Speaking as the originator of Measure C, we cannot simply rezone the land in advance to induce them to sell, in the absence of a linked development agreement we lose much control of what happens out there and also lose the income from the track while the land sits vacant. 

In the ideal we should try to come up with a project that is financially attractive enough to induce Magna to close the track, create a large park on 80 percent of the property, and generate substantially increased income for Albany. This should satisfy both the park and income factions in Albany. Without doubt the strongest incentive would be to offer Magna a casino or hotel/casino. In effect, we would be downsizing a large and inefficient urban gambling operation to a much smaller more profitable one while creating a park on 80 percent of the land. Casinos are politically incorrect these days, however. Weaker incentives would include a mall and/or hotel project. Perhaps there are other, much better, ideas out there. 

We have all heard the negatives about casinos but, for the sake of completeness, we should examine the positives and then decide if they outweigh the negatives in this particular situation. Because of space limitations here, I have set up a website at http://groups.yahoo.com/group/albanyca where 13 arguments in favor of a casino are listed and where we can discuss all the possible alternatives in a constructive and civil way. Public hearings are not efficient ways to resolve complex issues. We need give and take with questions and answers to properly evaluate the alternatives and break the current stalemate. 

Albany can take a year or two exploring politically correct solutions. If we find one that works, great. But we need to set a deadline. It is inadvisable to leave the waterfront unresolved for another ten years. People need to stop thinking in terms of the best conceivable outcome and start thinking in terms of the best realistic outcome. We may ultimately need to choose between getting a park plus millions additional income on the one hand and being politically correct on the other. 


Tony Caine is an Albany resident.