Vogel will wait for auction to buy Rosecroft 

Posted: 2:17 pm Thu, September 2, 2010
By Liz Farmer
Daily Record Business Writer

Prince George’s County’s bankrupt harness racing track appears headed for an auction after it failed to get its proposed sale agreement approved by the court.

Prospective buyer Mark Vogel’s option to buy Rosecroft Raceway expired Thursday with no motion to renew the sale. Vogel, a Greenbelt-based developer, had tried to buy the track out of bankruptcy, but the court denied the sale in April, calling it a “sellout” and unfair to the track’s creditors.

This week, the U.S. trustee appointed for Rosecroft’s owner, Cloverleaf Enterprises Inc., filed a motion to convert the track’s bankruptcy proceedings to Chapter 7 liquidation. Creditors in the thoroughbred industry, including the Maryland Jockey Club and the Maryland Thoroughbred Horsemen’s Association, followed suit with a similar motion Thursday, noting Cloverleaf had 14 months to reorganize and had failed.

Vogel said on Thursday he was ready to take his chances on an auction, noting he holds the first trust mortgage on the track after he bought it from Cloverleaf’s largest creditor, PNC Bank, last year. Therefore his lien has priority over all other liens against the property.

He said the mortgage is valued at $6.3 million, meaning a minimum bid would have to exceed that amount.

“So here’s the one question,” Vogel said. “Will anybody bid on it? Really?”

Meanwhile, Cloverleaf President Kelley Rogers said he is still holding out hope for the track, which closed this summer. Although he said Cloverleaf would not fight a Chapter 7 conversion, he believes Rosecroft still has a chance to find a buyer the court could approve.

“The bottom line is, if we don’t go in with a new deal that’s signed and ready for the judge to consider, then I think it will be converted,” he said. “It is very much on us to get a deal. Now we go back to the drawing board.”

Rogers’ deadline is Oct. 7, when the hearing on the liquidation motions is scheduled.

But Vogel called the property “worthless,” saying he doubts anyone will bid higher than the mortgage value. With just a two-lane access road, he said, the investment required for infrastructure alone would not appeal to a developer.

On that point, Rogers agreed.

“I don’t think it will be [razed],” he said. “That property is not worth a lot of money, in all honesty … [and it’s] not very attractive except to a new racetrack owner.”

Cloverleaf filed for bankruptcy in June 2009 after losing much of its rights to broadcast and take bets on thoroughbred races. The company is embroiled in a dispute with the jockey club and the Maryland Racing Commission over those rights, and the two sides have been at a stalemate for more than a year.

Rosecroft, which halted live racing in 2008, was operating essentially as an off-track betting facility until it could no longer afford to stay open in July. Approximately 200 people were laid off.

Vogel said Thursday he would have moved to liquidate Cloverleaf’s lone asset “six months ago” but was hoping that as the prospective buyer he could instead resolve the simulcast issue and keep the track open.