Red tape entangles a potential Keeneland quarter-horse track site near Corbin

CORBIN — Local officials and developers agree that Keeneland's plan to put a quarter-horse track in the Corbin area would create jobs and boost the economy, but the consensus runs out when it comes to a location for the racecourse.

One site under consideration is a high-visibility tract of land beside Interstate 75 on the north edge of town, where there also is potential for a retail development to share the space.

However, developing the track there requires negotiating a thicket of considerations involving annexation, alcohol, utilities and politics:

■ The land is in an unincorporated area in Laurel County, which has no legal alcohol sales — a significant drawback for the track. While Corbin is wet, the city is barred from annexing the site because the site is across a county line from the incorporated part of Corbin. (Corbin straddles both Knox and Whitley counties.)

■ Officials in London, which is about 9 miles to the north and allows alcohol sales at larger restaurants, are open to annexing a narrow strip of land along the interstate to take in the site. But Corbin would have to agree to the annexation, because it owns water and sewer lines in the area — and Corbin officials have said they don't want London annexing the land.

"It's all right there at our fingertips if we could get these governments together," said Jerry Wayne Garland, whose company, G&M Oil, owns the land.

Keeneland confirmed in 2013 that it was working on a deal to buy the license of the struggling Thunder Ridge harness-racing track in Prestonsburg and reinvent it as a quarter-horse track at Corbin.

The Kentucky Horse Racing Commission in December approved letting Keeneland take over the assets of Thunder Ridge. The commission must approve details such as race dates and the change in location, but Vince Gabbert, vice president and chief operating officer at Keeneland, has said he sees no big roadblocks.

Keeneland has said it hopes to begin putting on races at the new track by the summer of 2016, with perhaps eight to 12 race dates on weekends between Memorial Day and Labor Day. Keeneland plans to have several hundred instant racing terminals at the track, which are similar to slot machines, and the track would simulcast races from elsewhere, so it would be open even when it wasn't hosting live races.

Garland said Keeneland officials first asked him to meet with them last May about possibly putting the track on his land. The 100 acres are just off busy I-75 at Exit 29, fronting on U.S. 25E, creating easy access and high visibility. There was once a truck stop at the site, but it is vacant now.

A Louisville shopping center company has expressed interest in using about 50 acres of the site for retail development such as stores and restaurants, according to Ernie Arnold, who works for The Gibson Company, a Lexington-based commercial real estate broker representing Garland.

The track and retail development would create a significant number of jobs and benefits such as increased property values and tax revenue, local officials said.

"I think any development like this is going to be a major shot in the arm" for Corbin and the region, said Bruce Carpenter, executive director of the Corbin Economic Development Agency.

Being in dry territory is a huge obstacle for the track, however. "That's kind of the linchpin," Arnold said.

The law allows for a vote in a precinct containing a horse track on whether to allow alcohol sales at the track, though there is the chance residents might not approve.

The shopping-center company is interested in Garland's site even if it's dry, but would prefer that it be wet because some restaurants won't build where they can't sell alcohol, Arnold said.

While Corbin is fully wet, with legal alcohol sales at restaurants, bars and package stores, a court decision from the 1930s and subsequent developments block the city from annexing Garland's property.

The old court case arose after the city of Elsmere, in Kenton County, annexed territory immediately adjacent to it in Boone County.

A resident unhappy about getting a new tax bill sued. In 1932, the state Court of Appeals — then the state's highest court — voided the annexation, saying there was no explicit legal authority for a city in one county to annex land across a county line.

Corbin had incorporated in two counties, Knox and Whitley, before that. But the city is barred from annexing land in Laurel County, according to Mayor Willard McBurney.

The area of south Laurel County that adjoins Corbin includes scores of businesses and is generally called north Corbin.

State lawmakers could approve legislation authorizing Corbin to take in the area, but the city has been frustrated in its desire to have the law changed.

The city put out feelers last year on legislation to let it annex the area, but got no traction, McBurney said.

In trying to work around the problem, developers asked London officials to consider annexing the area containing Garland's property.

That would address the alcohol issue because London allows alcohol sales at larger restaurants.

London Mayor Troy Rudder said the plan would be for the city to annex the right-of-way along I-75 from London to the north Corbin interchange — a distance of about 9 miles — and along U.S. 25E.

That would create a long, narrow link from London to Garland's property while avoiding objections from landowners along the way. It would be voluntary for property owners to come into the city, Rudder said.

Corbin Mayor Willard McBurney argued London can't legally annex a narrow strip of land to take in a site so far away, but Rudder said the law does allow such "corridor annexation."

The annexation would be similar to a 2005 move by the city of Burnside, in Pulaski County. The city adopted the narrow strip of land owned by the U.S. Army Corps of Engineers along the shore of Lake Cumberland in order to take in Lee's Ford Marina Resort, allowing the marina restaurant to sell alcohol. The marina was 8 miles from Burnside by land.

Even without the issue of the corridor annexation, however, Corbin officials would have to agree to let London annex the area because Corbin has long provided water and sewer service in the area.

The law bars one city from taking in an area where another has utilities unless the two come to an agreement, which could cover such issues as the annexing city paying for the infrastructure. Rudder said the cities could work out a deal under which Corbin could still get revenue from the utilities.

However, Corbin isn't willing to let London annex the property.

"We don't want another city taking over our infrastructure," McBurney said.

McBurney said it would make far more sense to change the law so that Corbin could annex the area it already serves.

"That's too far-fetched," he said of London taking in the area.

Garland is frustrated with the annexation issue. There's no good reason not to let Corbin, which is already in two counties, annex land in a third, he said.

"There's a lot of politics," he said.

Rudder said he's seen social media posts accusing London of trying a land grab, but he said that's not the case.

London officials simply want to find a way to make the proposal for the track and retail complex work, he said.

"I still hope that something will happen that that project can go on, because it would be good for all of us," Rudder said.

London and Corbin have cooperated a number of times through the years.

But they also have had a strained relationship at times; perhaps the best example was a lengthy fight 30 years ago over the location for a large new regional hospital.

Some people in London pushed to put the facility north of Corbin, arguing it would be more accessible to both cities, but people from Corbin favored a site south of town. After the London partisans lost a court challenge, the Baptist Health hospital chain built the facility south of Corbin.

Rudder said the cities have had a good relationship for years, but for now are at an impasse about the track.

Garland said he's not betting London and Corbin will be able to reach an agreement. He is having an attorney research whether Corbin and Laurel County could sign an interlocal agreement that would extend Corbin's jurisdiction into the area.

Laurel County Judge-Executive David Westerfield said he'd be willing to listen to a presentation.

However, Westerfield said he did not think the city and county could make the area wet through such an agreement.

If local officials and the developer can't work out an agreement for the G&M site, it won't scuttle Keeneland's plan for a quarter-horse track in the area.

The track has considered at least one other site, on the Corbin bypass. The land is inside the city limit, so alcohol sales would be allowed there, but is less visible than the interstate location.

Gabbert, the Keeneland official, said there are no plans to search for a place for the track somewhere other than the Corbin area.

"We are decided on the community we want to be in. We don't want to venture outside the chosen area," he said.

This story was originally published January 17, 2015 at 8:42 PM with the headline "Red tape entangles a potential Keeneland quarter-horse track site near Corbin."