The general manager of Running Aces Harness Park said Thursday that a foreclosure notice against the $64 million track will not change its racing or card-room schedule but is merely a legal procedure that allows the Anoka County track's primary lender to become sole owner.
Lender Black Diamond Commercial Finance, L.L.C., which took over operations of the Columbus track in October 2008, is betting that changes in ownership will appear seamless to customers who frequent Minnesota's only harness track during its third season of live racing, which began last week.
Black Diamond assumed majority ownership after an original co-founder, Southwest Casino Corp. of Bloomington, turned over its reins after losing $4 million during the track's initial season. Last year, Mountaineer Gaming of West Virginia, the other co-founder, gave up its interest in the track to Black Diamond.
But Black Diamond works as a lender and an agent -- a financial umbrella that includes other investors, Running Aces general manager Robert Farinella explained. Black Diamond's corporate base had been responsible for 60 percent of Running Aces operations, while other lenders contributed 40 percent, Farinella said. But those other lenders stopped making mortgage payments, leading to a recent foreclosure notice, he said.
"The minority lenders have not been willing to advance additional capital to the operation of Running Aces, and Black Diamond has been shouldering the burden willingly," Farinella said. "This will take out the minority partners and allow Black Diamond to have 100 percent controlling interest."
Running Aces' 51-date live schedule began June 1, and Farinella said the harness park is expected to employ 550 to 570 people through the summer -- a healthy number of employees for a park still trying to hit its stride. Daily purses and the number of horses competing should not be affected by the ownership adjustments, Farinella said.
The ownership changes and foreclosure notice are scheduled to be discussed by the Minnesota Racing Commission next week.
"All operations will be going business-as-usual this summer, our most significant season," Farinella said. "Business is actually improving and has in each of the last two years.
"For our 2010 budget, we're ahead of the bottom line, and our cash flow is positive."
Paul Levy • 612-673-4419