SUNDAY EDITION | Churchill Downs grabs $13 million in neighborhood real estate during unprecedented buying binge
Churchill Downs has gone on an unprecedented buying spree, snapping up $13 million in homes, lots and commercial properties on three sides of its iconic Central Avenue track. Company officials are mum on their plans.
LOUISVILLE, Ky. (WDRB) -- Shirley Shouse thought she got “a great deal” when she bought her modest, two-bedroom house on Thornberry Avenue for $55,500 two decades ago.
Shouse, a bartender, remembers a vibrant, middle-class neighborhood in the shadow of Churchill Downs, the iconic Louisville racetrack. Back then, she recalled, there were a lot of kids, few renters and no drugs.
Today, Shouse still has neighbors on her side of the block, but the houses across the street have been bulldozed and replaced by a gravel parking lot.
“It’s nothing like the neighborhood I moved into,” Shouse said in an interview Monday. “… Now I walk out the door and I can see Central (Avenue), and I can see Taylor Boulevard. It’s like a whole new landscape.”
The landscape is not so much changing as it is disappearing – the result of Churchill Downs’ gradual expansion into residential areas around the track. For 20 years now, the company has slowly bought up houses, razed them, and added another gravel or grass parking lot on the periphery of the track.
But in the last six months, Churchill has gone on an unprecedented buying spree, acquiring nearly three dozen vacant lots, houses and commercial properties on three sides of the Central Avenue track, Jefferson County property records show. That includes two lots at the end of Shouse’s street.
The total price tag for that real estate is just shy of $13 million. In fact, Churchill has spent more on properties near the track in the last six months than it had in the previous ten years, according to a WDRB analysis of property records.
It’s unclear whether Churchill is simply eyeing more parking or a larger area to stage equipment during the peak Kentucky Oaks and Derby weekend – or, whether the land grab might have a bigger purpose.
“We hope to put these properties to good use to further enhance our business, but we do not have any announcement to make at this time,” Churchill Downs spokesman John Asher said in an emailed statement.
Neighbors speculate about Churchill planning a hotel or casino, should Kentucky lawmakers revive the prospect of legalizing gambling. To be sure, Gov. Matt Bevin said in a radio interview last week that, while “the day may come” for gambling in Kentucky, he sees no changes “probably in the next ten years.”
Meanwhile, Churchill’s urgency to scoop up so many properties in the last few months is tied to a tax-lowering strategy the company is pursuing, Asher confirmed.
Marcia Dall, Churchill’s chief financial officer, told investors on an April 27 conference call that the company’s recent “strategic property acquisitions around Churchill Downs Racetrack” were part of a plan to defer taxes on some of a $23 million profit Churchill made last November by selling undeveloped land around its Calder Racetrack in Miami Gardens, Fla.
Churchill has not bought the real estate in the company’s name, but rather through AQ Properties, a limited liability company with the same address as Churchill’s headquarters in Louisville.
In addition to the houses and lots, Churchill also bought the PNC Bank branch at the corner of S. 4th Street and Central Avenue and the retail strip center at 3737 S. Fourth Street where veterinarian Rick Pelphrey operates Churchill Veterinary Supply Co.
Churchill has been amassing more parking around its landlocked racetrack since the late 1990s, primarily in the neighborhood west of the track. Known officially as “South Louisville,” the neighborhood is sandwiched between Wyandotte, Taylor-Berry, the track and Central Avenue.
“It’s been going on for 24 years,” said Louis Marsili, an 80-year-old General Electric Co. retiree who lives on Bohannon Avenue. Marsili now has a direct line of sight to the track from his front stoop, because the neighborhood in between has been almost completely torn down.
“They just been trying to tie all this property up -- getting ready to do something,” Marsili said.
For years, records show the company has sometimes paid far in excess of the homes’ value, but for their proximity to the track.
In March, for instance, Churchill paid $415,000 for a 744-square-foot house in poor shape at 3124 Bohannon Avenue, at the end of Marsili’s block. The house was assessed at $40,990 for taxes.
“I never dreamed they’d offer anything like that,” said Shouse, who can see the Bohannon house from her front porch.
One of the sellers of the Bohannon house, Cheryl Wirth of Fairdale, denied knowledge of the deal in a brief interview. Wirth and her husband Henry bought the house for $30,000 in 2007, records show.
Steve Krajcir, who works as a jockey agent lining up mounts on the Churchill backside, said it was “shocking” to learn Churchill paid $238,000 in April for the 1,200-square-foot house next to his on Queen Avenue. Krajcir bought his home, a duplex, for $70,000.
“Over the past few years I have seen more and more houses get tore down and they have these parking lots now,” Krajcir said. “They must have a plan for something -- I don’t know. One thing’s for sure, they’re not buying them to live in.”
Churchill went on a smaller buying binge in the early 2000s, and at the time, company officials talked of wanting a big, contiguous parking lot extended from the track to Taylor Boulevard.
One obstacle back then was the Stair family, who operated a private parking business on land they owned in the 900 block of Central Avenue and refused to sell, according to a 2004 Courier-Journal story.
More than a decade later, the family members – Fred and Janna Stair and Joanna and Larry Slider – got $8 million from Churchill for 17 tracts they had amassed in the area, mostly vacant lots, according to a deed signed in January.
The website for their business, Captain’s Derby Parking, shows a man enjoying beverage on a boat and says the business is “permanently closed” as of January after an 18-year run.
Contacted by a reporter, Fred Stair – of Gulf Breeze, Florida -- disavowed knowledge of the sale, saying, “I have no idea what you are talking about, and I am not interested in being interviewed.”
Among the recent Churchill purchases is the last house left standing closest to the track at 920 Homeview Drive – some 300 feet from the entrance to Gate 17.
The house belonged to the late Gertrude Jones, who lived there for decades with her late husband, who worked at the Reynolds aluminum plant in Louisville, according to her sister, Emily Marie Russo.
Jones, who died at 84 last year, refused to sell or move even as all but one house on her block were bulldozed, Russo said. In fact, Jones and her husband kept investing in the house – new plumbing, new roof, finishing the basement.
“I told her, I said, ‘What are you doing? They are only going to knock this down,’” Russo said in a phone interview from her home in Rhode Island. “She didn’t care. She loved it. You couldn’t say nothing to her.”
Russo, the executrix of Jones’ estate, sold the house to Churchill for $400,000 in December, records show.
Russo said she loved visiting the neighborhood around Derby time decades ago, but it’s been a long time since she felt safe in the area.
“I was afraid to stay alone over there,” Russo said, noting the bars her sister had put on the windows. “She said there was a lot of security, but you were actually sleeping in a parking lot.”