Hawthorne faces more issues

by Neil Milbert

Judge Timothy Barnes of the U.S. Bankruptcy Court of Northern Illinois has delayed until Wednesday (Sept. 30) and, if necessary, Oct. 7, decisions on requests by U.S. Trustee Adam Brief, the Illinois Gaming Board and the Illinois Racing Board regarding ongoing issues confronting Tim Carey, the president of permanently closed Hawthorne Race Course.

Originally, hearings and decisions were scheduled for Sept. 23.

Brief wants the court to either dismiss Hawthorne’s Feb. 27 filing for Chapter 11 bankruptcy or change it to a Chapter 7 designation, thereby stripping the track that formerly conducted harness and thoroughbred meetings of its debtor-in-possession status. He is charging that the president of the family-owned former racetrack cannot manage a successful reorganization and, alleges “gross mismanagement and human cost.”

The Gaming Board has filed a motion to take away the dormant casino and sports wagering license Hawthorne was granted in 2020 because it no longer operates a racetrack.

The Racing Board is asking the judge to allow it to begin administrative proceedings to revoke the Hawthorne organization license that is scheduled to expire on Dec. 31 and take action to terminate the licenses of the 11 northern Illinois off-track betting parlors operating under the Hawthorne umbrella and take away its advance deposit wagering license.

There also are some other Hawthorne issues that the Racing Board is asking Judge Barnes to consider:

• Hawthorne closed its on-site OTB without providing advance notice that is required by the statute;

• Carey failed to submit the bookkeeper reports requests by the board for the thoroughbred horsemen’s purse accounts for July and August — the last report received was for the week of June 29;

• Another alleged violation was the $720,000 in unpaid charitable assessments intended to support backstretch surfaces. The board notified Carey on July 1 that the track was $593,893 in arrears for its thoroughbred meeting and $126,000 for its Suburban Downs harness meeting and set a 30-day deadline that expired without any payments being paid.

Hawthorne’s bounced checks and deficient purse account prevented Suburban Downs from conducting its winter harness meeting in January and February and its November and December dates had to be cancelled after the track went out of business.

The thoroughbred meeting got underway in April three weeks later than scheduled and ended on July 19, nearly four months prior to the scheduled closing date.

Hawthorne’s closing leaves the Chicago metropolitan area — which had seven racetracks in the early 1970s — without a single one and Illinois without a pari-mutuel harness track.

The state’s only surviving racetrack is Fairmount Park, a racino that conducts thoroughbred racing in downstate Collinsville across the Mississippi River from St. Louis.

Located in suburban Stickney, near Chicago’s Midway Airport, Hawthorne inaugurated thoroughbred racing in 1891 and added harness racing in 1970.

Four years after Illinois banned gambling in 1905 the track was sold by its builder, Edward Corrigan, to Thomas Carey, who was instrumental in reviving betting on racing in the early 1920s. Thomas Carey and his heirs owned the track until Sept. 2 of this year when Allimac 23, a Delaware shell corporation that was the only bidder in the bankruptcy proceedings closed on its $90 million acquisition.

Allimac reportedly was representing data center giant Digital Realty of Austin, TX.

If Digital Realty plans to convert the 119-acre site into a data center it faces major obstacles. The Stickney Village Board has passed a resolution banning data centers and the next-door suburb of Cicero has passed a resolution opposing their construction in close proximity.

NOTE: In my Sept. 18 columnthe name of the Illinois Racing Board projects manager, Bob Denneen, was misspelled. I apologize for the error.