New owner hopes to revive The Woodlands, but a return to glory won’t be easy

The racetrack is a ghost of its former self.

There are no cheering crowds at what remains of The Woodlands. No horses or dogs preparing to race, no bustling restaurant to feed its gambling clientele, no wagers being placed. There haven’t been for almost seven years.

That didn’t stop a Kansas-raised billionaire from taking a chance on it.

“The bones are good, the structure is good,” said Phil Ruffin, the owner of Treasure Island Hotel and Casino in Las Vegas.

Ruffin plans on bringing back horse races and pairing them with casino slot games, creating a hybrid called a “racino.”

“I think Kansas City is a sports town,” Ruffin said. “I think they would fall in love with this deal.”

But reopening The Woodlands has never been as simple as flipping on the lights and letting the public back in.

While supporters say a revival of the racetrack with slot machines would bring millions of dollars back to the state, others maintain that changing gambling laws to help The Woodlands come back to life would upset the applecart of the nearby gaming industry.

“I don’t think it would be beneficial to Wyandotte County,” said Mike Taylor, public relations director and staff lobbyist for the Unified Government of Wyandotte County and Kansas City, Kan. “It could even be harmful.”

The new owner said he won’t begin construction until the legislature lowers the tax rate on racinos — Ruffin said the current tax rate is “an unconscionable amount of money, and it would not be profitable, even with slots.”

But changing the tax rate is far from a done deal.

So the track falls apart while lawmakers, local officials and fans of the track continue to debate how to open The Woodlands again.

“It’s just a shame that place is sitting there empty,” said Mark Evans, president of the Kansas Thoroughbred Association. “Just a crying shame.”

But Taylor said that whatever happens, The Woodlands may never match its former glory.

“Those days are long gone and they’re not going to be re-created,” he said.

Even if an agreement can’t be reached, Ruffin’s purchase still gives him a large plot of land, about 400 acres, that has seen a recent burst of new construction and attractions around it.

The Legends outlet mall was already open in 2008 when The Woodlands closed. And the area has added the Hollywood Casino at Kansas Speedway, the Schlitterbahn water park and Sporting Park, the stadium of Sporting KC, among other attractions.

So Ruffin is undeterred.

“If slots don’t go through, it’s still a viable piece of ground,” Ruffin said. “We buy ground all the time. It’s a business we know.”

Fight for revival

Before the crowds stopped coming, before the riverboat casinos across the state line started sucking away business, The Woodlands was a main attraction in Wyandotte County. After opening in 1989, attendance spiked in 1990 at 1.7 million. But by 1996, the track had filed for bankruptcy protection. The year before it closed, crowds had fallen to 275,560.

The allure of racing has continued to lag except at sites with niche meets or special event races, such as the Triple Crown, said one analyst.

“You have a product that's appealing, but you can’t put it out 365 days a year,” said Doug Reed, director of the Race Track Industry Program at the University of Arizona.

Randy Birch, a former track announcer at The Woodlands, said oversaturation of races, along with slot and casino games in the area, contributed to the thinning crowds in the track’s later days.

“People still love racing,” Birch said. “They just love to have slot machines with it.”

As The Woodlands held its grand finale race in August 2008, Birch said there was some hope that the track would reopen in the near future. Almost seven years later, he is still hopeful the track will return.

When the track’s health started failing, slot machines were considered a remedy. But it wasn’t until 2007, when the Kansas Expanded Lottery Act was signed into law, that the apparent savior of the racetrack became a reality. The law gave sites such as The Woodlands the ability to install state-owned slot machines to turn the complex into a racino. The new law also opened the state up for casino construction, such as the Hollywood Casino.

Then-governor Kathleen Sebelius stopped in four locations set to receive casinos or racetrack slot parlors to commemorate signing the law. At The Woodlands that day, where Sebelius appeared for her Kansas City area stop, a quirky piece of appreciation greeted the new law. According to a Star article, track employees dressed a greyhound in a sweater to celebrate.

It read “Thank you Governor Sebelius.”

But it turned out that the tax rate on slot machines was so severe that it would have been difficult, if not impossible, to turn a profit at The Woodlands, supporters say. The track closed a year later.

While “destination casino resorts” like the Hollywood Casino at Kansas Speedway pay about 27 percent of revenue in taxes to the state and local government, a possible racino like The Woodlands would be taxed at a much higher rate.

If The Woodlands were to add slot machines under the current law, 60 percent of the net electronic gaming income would be divided among the local city or county, racing purses and other state funds, with the bulk of that — 40 percent — going to the state.

That leaves the racetrack with 25 percent to take home, while 15 percent can be used for gaming expenses, according to the law.

“The results are clear,” said Sen. Steve Fitzgerald, a Leavenworth Republican.“It killed The Woodlands.”

Over the years, attempts were made to revive racetracks lying dormant across the state. Recently, Fitzgerald took up the issue in Topeka. As he went door to door in his district, he found that residents viewed The Woodlands as a local jewel.

“The feeling was it got taken from them,” Fitzgerald said. “There’s some hard feelings there.”

Fitzgerald’s efforts resulted in a bill that would increase the amount of net electronic gaming machine income the racino would keep to 64.5 percent in the first two years and then 60.5 percent every year after. Additional changes in the bill included a decrease in the amount of days that races would need to be held at the track and an increase in the number of slot machines allowed.

“This can be a very big draw,” Fitzgerald said. “Western Wyandotte is booming, and this is only going to help. This is going to be really good for everybody, including the Unified Government.”

In May, the bill passed the Senate in a 24-12 vote, but it stalled in the House.

And there’s no guarantee it will pass next session.

Sen. Pat Pettey, a Kansas City, Kan., Democrat, said she is leery of anything that would jeopardize the agreement the government has with the Hollywood Casino.

“This battle is not new,” Pettey said.

She said she thinks it’s unlikely the bill the Senate passed will move forward when the House reconvenes in January 2016.

Even if a revival of The Woodlands isn’t in the cards, Pettey said the property has value because of its size and proximity to other attractions in Wyandotte County.

“It’s quite likely that in the not-too-distant future there would be some other industry that might be interested in that (property) other than gaming,” Pettey said. “I think the bottom line is that the citizens would be excited if actually it was developed. And that doesn’t limit it to being developed as a racetrack.”

Casino competition

On a recent visit to The Woodlands, Phil Ruffin saw the warts and cracks in what had once been a county hot spot.

He noted the interior needed to be gutted and the need for a new ceiling and a new roof. If he had to guess, renovations could cost $50 million, maybe more.

He decided to buy it anyway.

“It’s all very doable, but it’s going to cost,” Ruffin said.

With the purchase of the Wyandotte County racetrack, Ruffin owns three tracks in the state, including Camptown Greyhound Park in Frontenac and Wichita Greyhound Park in Park City.

All are closed. If they each reopen with slots, Ruffin said he could employ a total of 2,000 people from the start in the three facilities.

The Woodlands would race only horses. And it would only open with slot machines operating under a lower tax rate.

“We won’t do anything until (Fitzgerald’s bill) passes the House,” Ruffin said.

While the Unified Government supports the changes to The Woodlands if they were done under the present law, officials said decreasing the tax rate would undercut sites like the Hollywood Casino at Kansas Speedway.

By law, the Hollywood Casino’s operator was required to invest a minimum of $225 million in the development of the casino. A privilege fee of $25 million was also made to the state.

“They’ve continued to meet their obligations,” Pettey said. “At this point, they’ve been good partners and they’ve built a quality facility.”

Taylor said one reason the Unified Government supports the current law and opposes the new legislation is because a possible racino like The Woodlands is not required to make such a large minimum investment.

“It would create unfair competition to the Hollywood Casino,” Taylor said.

The slot machine bill already has affected a decision to build a hotel at the casino.

Kansas Entertainment LLC, the casino’s operator, had pledged to build the hotel, with a yearly penalty payment if construction didn’t begin within two years of the casino’s opening. The decision was made earlier this year to postpone construction of the hotel.

This year, the Unified Government receives about $1.5 million for the postponement.

Karen Bailey, a spokeswoman for Kansas Entertainment, said the operator didn’t want to invest more money in the area if the gaming laws and tax structure were going to be changed in favor of The Woodlands.

“We don’t believe that it’s fair to be changing the rules in the middle of the game,” Bailey said.

Uncertain future

For those who visited the track during its almost two decades of business, the picture of a revitalized Woodlands brings back images of the track’s high point. Mike Taylor of the Unified Government said the days of The Woodlands reaching new heights are nothing but nice memories.

“That’s not going to happen again,” he said.

Pettey said it’s human nature to look back on a site like The Woodlands with nostalgia.

“Sometimes what’s reality and what we remember from the past, they really don’t match,” Pettey said.

Though reviving the racetrack may yet prove to be a challenge for the new owner, Ruffin was lighthearted about it. He made his fortune off business ventures, off buying ground, off investing in property.

“It’s a risk,” Ruffin said. “But everything is.”