A Letter to the Editor by Josh Stanfield.
“Asked about the financing of the project, [Churchill Downs Incorporated CEO] Carstanjen said the specifics would be finalized and made public after the referendum.”
Green space, pickleball, spa treatments, the resort experience – this is what’s being sold to Richmond voters as they cast their ballots for or against the proposed casino project. For those who were around in 2021, when the project failed on the Richmond ballot, the pitch sounds radically different than the original proposition: a Black-owned casino, “the last opportunity for Black inclusion in Virginia’s casino gambling gold rush.”
The Bait
In the storied pages of the Richmond Free Press, Alfred Liggins – CEO of Urban One, Inc., the Black-owned driving force behind the casino project – made the case in 2020:
“We cannot and must not let the voices of Black Americans and Black business owners be marginalized and shut out of the Virginia casino licenses. We can’t wait for the opportunity to come to us; instead, we must chart our own destiny by taking part in the process.
The Black community and Black businesses must walk in lock-step to ensure that we do more than just frequent the casinos and spend our money in them once operational. To advance the needs of Black people, we must have ownership and derive measurable benefits from the casinos.”
Urban One won the bid for the 2021 project. In its submission to the City of Richmond in response to the City’s RFP (submitted alongside then-partner Peninsula Pacific Entertainment), Urban One made clear that the project would be majority Black owned:
At page 27 here.
At pages 28-29 here.
Even more, Urban One made the member list of the Minority Investment Group public (at pages 29-30), a list that included such prominent names as Missy Elliot, Donald Gee, Ken Johnson, and Michelle Mosby.
The Switch
Fast forward to 2023. Richmond voters rejected the 2021 project on the ballot, the General Assembly kept the project off the ballot in 2022, yet Richmond City Council and the Stoney Administration handed Alfred Liggins a no-bid chance to roll the dice again with the voters.
While the casino project itself remains largely unchanged, the branding, financing, and ownership are totally different.
Critically, Kentucky-based Churchill Downs has entered the picture after acquiring Peninsula Pacific Entertainment. The City’s certification package, transmitted this summer to the Virginia Lottery Board and acquired via a FOIA request, includes financial details that help illuminate the new arrangement:
At page six here.
Note the change: in 2021, the project was majority (almost entirely?) Black owned, now Urban One is a 50/50 partner with Churchill Downs. Next, check out the 2023 equity sourcing:
At page six here.
Urban One is contributing around 47% of the approximately $150 million in equity the developer has to shell out, with Churchill Downs contributing around 47% and undisclosed local investors covering around 6%.
Who’ll cover the $412,500,000 in debt financing? A footnote on page two provides a clue:
That the 2023 pro-casino campaign has completely abandoned the focus on Black ownership makes sense, now that we’ve seen some of the financial documents. It makes even more sense when you examine the history (past and recent) of Churchill Downs. Consider, for example, Ryan Van Velzer’s 2021 reporting in Louisville Public Media:
“In between leading chants on a megaphone, protest organizer Carmen Jones explained that she grew up living in the shadow of the twin spires of Churchill Downs. She said Black and Brown workers employed by the track continue to be underpaid and exploited by Churchill Downs. Valets who saddle up the horses threatened to strike this year over the track’s failure to negotiate a new contract and improve wages, though they ultimately decided to work.
“You’re a big slave castle sitting right in the middle of the hood. You reap off all the benefits, they are buying up all of this property here, gentrifying so no one else in the South End community can live here and have businesses here,” Jones said.”
The Aftermath
If Richmond voters approve the casino project this year, Urban One and Churchill Downs will move forward with haste. But there’s a perversely ironic possibility that Churchill Downs will ultimately control the entire casino.
What Richmond voters couldn’t have known in 2021 – but we have the luxury of knowing now – is that Urban One recently cashed out its stake in the MGM National Harbor casino in Maryland. As InsideRadio reported this year:
“The Alfred Liggins-run media company made a $40 million investment in MGM National Harbor, which opened its doors in December 2016. Since then, the investment has been paying Urban One attractive dividends.”
InsideRadio reported this April:
“Urban One has cashed out of its investment in MGM National Harbor. The Alfred Liggins-led media company has received about $136.8 million after issuing a “put notice” that required MGM National Harbor to buy back all of the media company’s minority investment in the gaming resort in suburban Washington.”
Maybe Alfred Liggins and Urban One have found a lucrative 21st-century business model in casinos, a model more promising than competing in the radio and TV industries? Maybe there’s a put option in their current agreement with Churchill Downs, an option that would require Churchill to cash out Urban One at Urban One’s request – and to the tune of hundreds of millions of dollars?
We don’t know.
If Urban One pulls a “MGM” on Richmond – minority investment, a few years of dividend extraction, then a put notice – they could leave town in great shape with an obscene amount of cash.
The people of Richmond, on the other hand, would be left with Churchill Downs. And that may be why, as Churchill’s CEO told the Associated Press, the financial details will remain shrouded in secrecy – until after the polls close.
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Josh Stanfield can be contacted at jstanfield@gmail.com.
Documents Acquired via FOIA:
2023 Richmond Lottery Board Submission:
https://www.scribd.com/document/670801183/Richmond-Lottery-Board-Submission
Urban One Exhibits:
https://www.scribd.com/document/670800018/Urban-One-Exhibits-June-2023
Richmond Resolution & Associated Documents:
Urban One Financial Info:
Disclaimer: The opinions and views expressed in Letters to the Editor are those of the authors and do not necessarily reflect the stance or viewpoints of RVA Magazine, its staff, or affiliated entities.
