Magna Drops $325M Racetrack-Retail Project

Magna, the largest racetrack owner in the country and a subsidiary of the Ontario, Canada-based automotive supplier Magna International, posted a second quarter loss of $23.4 million. Subsequently, Frank Stronach, chairman and interim CEO, said in the company's Q2 report that a strategic review of the company will be launched. "Also, we will cease racing operations at our Austrian racetrack Magna Racino at the end of its 2007 meet, have relinquished our racing license for Michigan Downs and have terminated our racetrack development project in Dixon, CA," he said in the report. A spokesman for the company did not return calls for comment.

The company said in 2003 that it planned to spend $100 million to build a thoroughbred racing track. One or two phases of retail were supposed to follow, that were to include a 170,000-sf entertainment pavilion, a 700,000-sf retail village center with restaurants, grocery stores and a theater, and an up-to-66,000-sf research and development building for Magna.

There had been many doubts the project would ever get built, as Magna lobbied the state legislature hard to allow slot machines in the facility, eventually losing the battle. Tom Shields, president of Marketing Resource Group Inc., a casino-lobbying group, tells GlobeSt.com that the handwriting was on the wall, "once it became apparent that they weren't going to be able to get the machines."

The development was to be an anchor to a 1,000-acre parcel, zoned for retail center that Romulus has been working to push for new projects. The property is bordered by I-94 and Eureka, Ecorse and Wayne roads. Magna still owns the 212 acres, but they haven't said what would be done with the land. The company did not return calls for comment. "We've asked the same question," Keyes says. "The only answer we get is that they are looking at other opportunities." He says it's unlikely that another racetrack plan will be put forward. "The one thing, they have significant experience with racetracks. If the largest operator of these things walks away, I'm not sure I'm comfortable letting someone else in," he says.

The city, which also hosts the Detroit Metropolitan Airport, has been struggling to get development going for a few years. The only market that's seen any movement is hospitality, Keyes says. "We've got one new hotel under construction, another just approved by our Plan Commission, and another about to have a meeting with our staff. Unfortunately, hotels are the only ones with a shovel in the ground here," he says.

Focus is still on acquiring tenants for the 1,000 acres. Keyes tells GlobeSt.com that Bear Creek Capital out of Cincinnati purchased a large portion of the land, and is working on an entertainment complex. The city would like to see an independent or AA baseball team stadium built, he says.