Michigan’s Northville Downs Sues Local Plymouth Township Over Proposed New Track

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Recently closed Michigan racetrack Northville Downs is suing a nearby township over its negotiations to bring a new venue to the area.

The final Michigan horse race betting venue shut its doors in early February after an announcement of closure from the Michigan Gaming Control Board in January.

However, Northville Downs’ operators said it planned to relocate to Plymouth Township for a new venue at Five Mile and Ridge Road (renderings pictured).

Those plans are now in jeopardy after negotiations between the operator and Plymouth officials turned sour.

Late last week, Northville Downs filed a lawsuit against the township, alleging local officials made “unconstitutional and extortionate” demands for community benefits before they would accept a new racetrack in their community.

It was filed by attorney and former Michigan Attorney General Mike Cox, working with Northville.

The Lawsuit

The suit asks for $10 million in damages. It also asks that Northville Downs be granted the right to build on the 125-acre site.

It alleges that Northville Downs’ owners, brothers John and Mike Carlo, were given demands that fall outside of state remits before their planning application would be passed.

Community benefits promised to local authorities as a way to swing permit applications are commonplace among commercial projects in the U.S.

However, Northville Downs says Plymouth Township’s demands were beyond legal and reasonable expectations.

The proposal for the track initially passed local authority votes. It stalled when the Township’s planning commission demanded that the previous community benefits agreements be expanded.

The suit alleges that the township then asked for a $5 million cash payment. On top of that, officials wanted funding for a walking trail, a pickleball court, and a Fourth of July drone show.

“This is a case of a municipality trying to shake down a business, a property owner, for extra money,” said Cox.

“The supervisor wanted Northville Downs to basically buy regulatory approval, which is not legal in America.”

The damages stem from the money the Carlos say they have already spent acquiring the land. The suit says that this $10 million land purchase included it taking out a $4.8 million loan.

Sour Grapes

Local Plymouth officials do not agree with that assessment and intend to fight their case in court.

“This is basically sour grapes by the Carlo brothers, who clearly never had the money to deliver on the promises they made to Plymouth Township for a $25-million horse racing facility, promises of a community benefit agreement, which they did agree to, and promises of revenue sharing,” said Plymouth Township Supervisor Kurt Heise, speaking to local media outlet Hometown Life.

The Township is within its Michigan gambling law rights to obtain so-called breakage fees from pari-mutuel betting operators in the state.

When a gambler hits a winner at the track, the payout is rounded up to the nearest dollar after being logged. The extra is then put in a pot to be collected by the local community authority.

Northville says it paid $200,000 a year to its previous City of Northville locations in this manner. It said it told Plymouth executives the figure is expected to be substantially higher at a new and upgraded venue.

80 Year Venture

However, Heise disputes Northville’s account of the financial agreement his Township wanted.

“It was $3 million, of which most of that money was simply a guarantee that we would get a minimum in breakage fees of $250,000 a year in the final eight years of the agreement,” he said.

“And that money would’ve gone to recreation and public safety, because we all recognized that this was going to be a controversial project. We understood that this was going to raise a lot of concern in the community, so we wanted to make sure that we got a community benefits agreement that provided the best deal possible for the people of Plymouth Township.”

Heise also believes that the Carlos are already exploring a buyer for the site, having decided that Plymouth was not worth the hassle. He says this would mitigate some of their $10 million in losses they are claiming as damages.

The project’s lawyer denies this. Cox says the Carlos are still very much interested in building Northville Downs anew in the Township.

“It’s a perfect spot,” he said. “Their landlord sold the property out from underneath them in the city of Northville, so they had to move after 80 years. They thought this was the spot for the next 80 years.”

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