Canterbury Park Holding Company wants to create a new subsidiary that could develop about half of the 407 acres it currently owns in Shakopee.
The company filed a preliminary proxy with the Securities and Exchange Commission calling for a special shareholder meeting sometime in November to approve a new corporate structure.
Under the plan a new parent company would control two subsidiaries. One subsidiary, Canterbury Park Entertainment, would control the company’s existing racetrack operations, including the pari-mutual wagering, card casino, concessions and related business. The second subsidiary, Canterbury Development, would develop about 200 acres of land currently owned by the company but not needed for racetrack operations.
“We began working on a retail project back in 2007 or 2008,” said Randy Sampson, CEO of Canterbury Park. “When the economy tanked, those kind of projects ended.”
Now the company is ready to renew development projects. It had previously disclosed plans to move its barn area and pursue a “destination lifestyle” retail development. Now the company has changed its focus and will pursue a variety of residential and commercial options.
Sampson said that, in addition to the new corporate structure, the company also needs to replat and rezone the property to allow for its development plan.
“Our goal would be to potentially break ground in 2016 on the first phases,” Sampson said. That first phase could include some residential development, apartment buildings, warehouse/office building or some combination.
Total development of the 200 acres could take five to 10 years, Sampson said.
In a related move, the company announced that it has completed the $1.3 million sale of a six-acre parcel to the Minnesota Municipal Power Agency. The MMPA is seeking approvals to develop a natural gas-fired electric power generation and production facility.
Canterbury Park believes a separate real estate subsidiary from the racetrack operations would cut down any delays and uncertainty due to regulation and development risks.
Canterbury Park Holding Company is subject to direct regulation by the Minnesota Racing Commission. Under the new parent company structure, the commercial development subsidiary would not be subject to direct MRC oversight.
The MRC does have some concerns, according to a Securities and Exchange Commission filing on Monday. The commission “wants to ensure that any transfer of assets from Canterbury Park Entertainment to an entity over which it does not have jurisdiction will not undermine the financial stability of the racetrack operations.”
If the plan is approved by shareholders, 75 acres would immediately transfer to Canterbury Development. The remaining 125 acres would need MRC approval before it could be transferred.
Shareholders at the special meeting also will be asked to approve an anti-takeover measure required under Minnesota law.
The Gabelli Group, the company’s largest shareholder, recently increased its holdings from 18.2 percent to 25.1 percent. Under the Minnesota Control Share Acquisition Act, shareholders need to approve the acquisition so Gabelli can vote all of its shares.
Gabelli has owned more than 5 percent of Canterbury Park’s shares since 2004 and has always maintained that it owned the shares for investment purposes only.
The board of directors recommends shareholders approve both proposals at the upcoming meeting.
Patrick Kennedy • 612-673-7926