How Wayne County lost millions on horse track in Huron Township

John Wisely | Detroit Free Press

Wayne County has cut its losses on a losing bet it placed more than a decade ago on a horse track in Huron Township.

The county announced Wednesday that it completed the sale of 650 acres of property just east of I-275 between Pennsylvania and Sibley roads.

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The buyers, a joint venture between Hillwood Enterprise and the Sterling Group, paid $4.9 million. The sale comes after the county spent more than $35 million adding roads and water and sewer lines.

“Given the proximity to the airport and the expected growth of the logistics industry, we think potential tenants will be as interested and excited about this project as we are,” Wayne County Executive Warren Evans said in a statement. “We are continuing to leverage assets like Detroit Metro Airport to attract investment, create jobs and expand the tax base.”

The sale also provides a quiet ending to a once high-flying plan to bring thoroughbred horse racing and thousands of new jobs to underused farmland in western Wayne County.

In 2007, Jerry Campbell, the founder of Republic Bank and an avid horseman, announced plans to build Pinnacle Park Race Course, a thoroughbred track on the property, the first such track in metro Detroit since Ladbrook Detroit Race Course in Livonia closed a decade earlier.

Millions in county money

Wayne County officials quickly jumped on board. In early 2008, the county issued $19 million in bonds to build roads on the property and another $14 million to install sewer lines.

The project's critics immediately raised doubts about its viability, given the failure of DRC, the decline of the industry overall and fact that Michigan didn't allow the placement of slot machines at the track to make it a so-called racino.

"I don't want to say that only a fool would do it," Ray Paulick, a former editor of Thoroughbred Times told the Free Press at the time. "But only a gambler would start up a horse track today without some additional form of gaming."

But Campbell, who planned to pour $72 million of his own money into the project, was bullish. So was then-county executive Robert Ficano.

"I'd bet on Jerry Campbell," Ficano said.

The county agreed to sell 320 acres property to Campbell for $1 with the understanding he would create 1,200 jobs there in five years. If the jobs failed to materialize, Campbell was to pay the county $16 million, or $50,000 an acre.

The deal also called for Pinnacle's owners to pay Huron Township $700,000 a year to help defray the costs of the road and sewer bonds.

The track opened in July 2008. Two months later, an economic meltdown started the recession and the foreclosure crisis.

To make matters worse, the state gaming commission cut back the number of days it would allow racing from 84 to 44, a move that Campbell later blamed for hurting the track.

The track limped along, but closed in 2010 without serving as a catalyst for economic development that Ficano had hoped it would be. In 2016, the clubhouse was torn down.

Shoddy accounting

Auditors ripped the county's handling of the project, saying the accounting at the site was so shoddy it was difficult to know how many jobs it actually created. Some of the jobs listed as created were UPS drivers who made deliveries at the site.

Campbell walked away from a $2.5 million tax bill and the property was ultimately forfeited back to the county. Campbell later declared bankruptcy.

"If we're guilty of anything, it's of not having a good enough crystal ball," then-assistant County Executive Alan Helmkamp said.

Campell's attorney, Camille Iurillo was more blunt, writing a pleading filed in his bankruptcy case: "In hindsight, the timing for the opening of the track could not have been worse."

Current county officials still hope to see some return on the millions their predecessors poured into infrastructure there. If the new development there spurs others to build nearby, the tax base will grow.

“We inherited a bad situation with the Pinnacle Race Track. In light of that history, we quickly engaged the local communities to find the best solution for the property following its April 1, 2019 foreclosure," said Assistant Wayne County Executive Khalil Rahal. "We knew we needed a usage that fit better in with the assets around it and economic trends regarding logistics and distribution. We’ve done that.”

Rahal said the site is a good one for mixed-use industrial development.

"The fact that Hillwood was willing to move forward with these buildings before securing tenants tells us they expect the property to be in demand and that’s a great sign,” he said.

Contact John Wisely: 313-222-6825 or jwisely@freepress.com. On Twitter @jwisely