The Red Mile last week received final approval from the state for more than $25.32 million in tax increment financing for a re development project near downtown Lexington that would include instant racing.
The Lexington harness racetrack — just off South Broadway, about a half-mile from the University of Kentucky campus — proposed an 80-acre mixed-used development of apartments, a hotel, retail and restaurant spaces, parking garages and offices.
According to the approval from the Kentucky Economic Development Financing Authority, the TIF portion from the Lexington-Fayette Urban County Government would be reduced to slightly less than $13.79 million "if in the future instant racing is determined to be an ineligible activity."
The Red Mile in 2009 applied for $54 million in tax increment financing for the $187 million development. The Lexington Trots Breeders Association, which owns the track, said it plans to invest about $133 million in private funds.
The idea behind TIF projects is for governments to invest in improving infrastructure and then pay for those improvements using new tax revenue, which developments are expected to generate when the projects are completed and areas are revitalized.
The Red Mile has not applied for Kentucky Horse Racing Commission approval for instant racing machines, commission attorney Tim West said. Each Kentucky track can have its own instant racing venues, so The Red Mile and Keeneland could apply separately, West said.
Kentucky Downs in Franklin is opening the state's first expanded gambling site Thursday. Ellis Park in Henderson also is expected to apply to put in the machines, which resemble electronic slot machines.
The Red Mile's president and chief executive, Joe Costa, said Tuesday that the track would wait until an appeal on the legality of betting on "historical races" makes its way through the courts.
The Family Foundation, a conservative advocacy group, has challenged a ruling made in December in Franklin Circuit Court that such bets are pari-mutuel and legal even though the players bet on races that have been run already.
Costa said that if the courts uphold the ruling, The Red Mile plans to renovate its grandstand to install a limited number of gambling machines.
"If it's successful, then we'd expand to a full-fledged instant racing parlor, which would mean expanding the grandstand as well," Costa said.
"Our board is intent on preserving The Red Mile. Short of gaming, the avenues I have are real estate development and pursuing instant racing," Costa said.
He said discussions also are under way to sell one parcel along Broadway, where the Tattersalls sales ring sits.