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Canterbury Park carves niche to combat COVID-19 impact

On a late Wednesday afternoon at Canterbury Park, about the only things familiar to regular racing fans were the plastic cups of foaming beer, Paul Allen’s voice over the loudspeaker and the horses and their jockeys, ready to take their marks before the sounding of the gun.

Just before 4:05 p.m. Sept. 16, the day before the last day of the season’s racing, handfuls of fans scattered across the race park due to COVID-19 restrictions placed on event venues. Inside the mezzanine, you could hear heels clicking on the solid floor and the scratches of pen on note sheets — a stark contrast to prior years, when some events attracted upward of 10,000 fans and the noise was akin to a stadium at a baseball game.

COVID-19 has meant business-as-unusual for Canterbury Park. Unlike many event venues, it holds a large chunk of the livelihood for its jockeys, trainers and owners. Removing that chunk to trim fat would mean more could be lost: the essence of the park’s existence, which is horses and their people.

The park chose in the spring to keep the show alive, even though Vice President of Marketing John Groen said leadership knew the park would lose money.

“When we decided to race… it was for our horsemen,” Groen said. “Canterbury is going to lose money, but this is the right decision.”

Wade Rarick, a Canterbury horse trainer, said after one of his horses won on Sept. 16 that he and other horse people at Canterbury haven’t been severely affected by COVID-19 because the park has remained open.

“They’ve done a good job keeping us running,” he said, adding horses need to keep racing to stay in shape.

Rarick said unlike professional sports players, horses don’t sense the lack of fans when they race.

Trainer Mike Biehler said the biggest difference he’s felt this season has been getting the horses ready too early, since the season was delayed. In terms of the lack of fans, Biehler said he thinks it’s a benefit for the horses.

“I think it actually is less of a distraction for them,” Biehler said.

Getting creative

Current Minnesota law requires in-person betting for anyone who wants to bet on in-state horse races. That means Minnesota racing fans cannot bet on Canterbury horses remotely — they have to physically drive to the park to place bets.

A House bill introduced in the early spring by District 55A Rep. Brad Tabke, DFL-Shakopee, and District 55B Rep. Tony Albright, R-Prior Lake, offered temporary provisions allowing for remote, in-state horse betting, which would have allowed Canterbury to profit off in-state horse betting via the internet or telephone.

But the bill didn’t pass in the Minnesota House — meaning Canterbury was faced with yet another challenge: how to attract in-state horse fans and keep them safe, while still requiring them to bet on-site at the park.

The park initiated drive-up wagering for those in-state fans who may not feel safe or can’t make it to the races in person. Drive-up wagering also allowed Canterbury to bring in a larger portion of the betting money.

Canterbury’s revenue for the month of March — when Canterbury closed its doors — was down 50% from 2019, Vice President of Racing Operations Andrew Offerman told the House Finance committee May 7.

The park received clearance from the state to split the venue up into several smaller venues. Guests on the mezzanine level, for example, could not wander down toward the ground level seating area. It allowed for more than 250 guests — the state limit on individual event spaces — at the park at any given time.

But it still means substantially fewer guests.

The result has meant a lack of revenue from casual fans: locals who would swing through the park on a Saturday afternoon in the summer to bet a couple dollars on a horse and buy food and a few beers.

Last year, the Fourth of July alone attracted 45,000 guests.

This year, not even 45,000 fans graced Canterbury Park’s grounds the entire season. 

Admission revenue normally hovers above $1 million in one racing season at the park. This year, the park has sold less than $200,000 in admission tickets.

The park has catered and marketed to a national audience of racing fans and betters instead of catering to the local community.

“We always pride ourselves on the local community and local fans,” Groen said. “Now we have to appeal to a national audience… because we’re not doing dog races anymore.”

One way the park has drawn a national following is by having the nation’s lowest takeout for the pick-five wager, meaning the park takes a smaller portion of out-of-state bets as revenue. Low takeouts are attractive to experienced betters from other states, Groen said.

The pick-five wager required betters to select the order of winners of five consecutive races.

The park also changed its racing schedule to carve out times most other race tracks were not racing. This gives Canterbury a better chance at grabbing the attention of late-afternoon, weekday betters and horse fans who don’t have many other races to bet on remotely.

“It’s a way to carve out a niche,” Groen said, adding it was working effectively, but still wasn’t a sustainable method without the park’s live, in-person racing revenue.

Paul Allen’s trademark announcing has changed, too. Instead of appealing to casual fans, the announcement has been restructured for racing fans who have more knowledge of the sport.

“When you look at our racing product and Paul Allen calling races… we have a really good product,” Groen said. “We’re hoping this has carry-over benefits.”

Counting the losses

Canterbury Park isn’t just a race track. It operates on a three-legged stool, with revenue coming in from horse racing, special events and the card casino.

This year, most of the weight on that stool has fallen on the card casino. And — though wobbly — it’s held up so far, Groen said.

The track’s card casino is the park’s biggest revenue generator right now, though Groen didn’t specify how much revenue it was bringing in.

Other large revenue generators, like craft shows and junk bonanzas in the park’s expo center, have been scratched, and there are a sparse number of conference and wedding rentals for the season.

“Part of the way we’ve built our model is to be in the entertainment business. COVID had an impact on the level of fun,” Groen said.

The park is mitigating its losses by cutting costs. Right now, there are a little more than 700 employees at the park. Normally, there are a little more than 1,200, Groen said — most of whom work seasonally in food and beverage services for special events.

The park normally draws $60,000 during a race day just in food and beverage revenue. Now, it’s drawing between $10,000 and $15,000, Groen said. 

Canterbury has even cut its live bugler. Instead, it plays the trademark “first call” ringtone through the loudspeakers. Paying for a bugler during COVID-19 is just “one of those things that didn’t shake out,” Groen said.

“Two hundred and fifty people is very limiting on the types of events we do in the expo center, like trade shows,” Groen said. “We were hopeful at this point that there’d be a little more certainty. And that’s something we don’t have.”

Now that racing is over for the season, the park will be in “maintenance mode:” preparing for the what-ifs and getting creative for revenue opportunities this winter — and crossing its fingers that next season can begin with a live bugler and a roaring crowd.

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Newly-released report details how former SPU utilities manager avoided state salary cap

Since former Shakopee Public Utilities Manager John Crooks was promoted to manager in 2011, he was “laser-focused on compensation, specifically his own,” according to an investigative report made public this month.

According to the report, conducted by law firm Levander, Gillen and Miller, before asking the commission for a raise, Crooks would “offer an apology at the beginning of most of the discussions, stating how he hates bringing up his salary every year, but he was passionately concerned about his wage range and how it must continue moving or he would be ‘topped out.’”

The report details years’ worth of questions from SPU commissioners and former Finance Director Renee Schmid surrounding Crooks’ salary, which has exceeded the state’s limit on government employee earnings by nearly $40,000 since 2017 but was only recently discovered to have exceeded the cap.

John Crooks

Crooks, who recently separated from the utility, will be required to repay the excess earnings he has received since 2017, according to a measure approved by the commission Aug. 13.

‘Not quite right’

Former Finance Director Renee Schmid raised concerns about Crooks’ salary several times, according to the report.

In 2017, Schmid told Crooks that, according to her calculations, he was over the salary cap, to which Crooks replied he would start a waiver process. Waivers provide salary cap exceptions “if it is determined that the position requires special expertise necessitating a higher salary,” the report said.

Schmid and Crooks told investigators an attorney they consulted advised against applying for the waiver because he did not believe it would be approved and a waiver was never submitted.

Schmid, who retired earlier this year, questioned Crooks’ salary again in 2019 and 2020 after his contracts were approved, each time mentioning the salary cap, according to email exchanges between Crooks and Schmid that were included in the report.

Crooks got around the salary cap by subtracting the value of his vacation and sick leave accruals from his overall salary, which — by his calculations — put his salary just below the cap, the investigation found. In closed meetings, commissioners asked questions regarding the salary cap, but ultimately relied on Crooks’ calculations, the report stated.

According to the report, “the commission seemed to feel that something was not quite right with his salary, but could not identify the issue.”

In an interview with the Valley News, SPUC President Deb Amundson said she wishes she would have been “more curious” about Crooks’ salary before voting to approve his contracts and accepted partial responsibility for the violation.

“On the other hand, it should have been on (Crooks) to inform us, too, where he stood on this,” Amundson said. “He believed… the statute allowed him to calculate his salary in a way that made him in the bounds, but I think the commission should have asked more questions.”

Former Utilities Manager John Crooks’ compensation has exceeded the state limit since 2017, according to this graph included in an investigative report.

The investigation also found that Crooks, Schmid and Amundson all had inadequate knowledge regarding the Data Practices Act and open meeting laws. At an Aug. 13 SPUC meeting, the commission voted to require all staff members and commissioners to attend training regarding the data practices act.

The commission also discussed Crooks’ salary on numerous occasions in closed session, though the investigation determined “none of these meetings that related to Crooks’ salary should have been held in closed session.”

In addition, from 2018 to 2020, eight meetings contained illegal “commission-only” packets with additional material not available in packets for the general public.

Amundson told investigators she was not aware of the “commission-only” packets and did not know they were sometimes different from the packets the public could access.

Crooks’ last day was Sept. 8 after the commission unanimously approved a separation agreement and decided to pursue interim management with the Minnesota Municipal Utilities Association.

SPUC Investigative Report

Utility swap

Shakopee residents will have the option to dissolve the Shakopee Public Utilities Commission on Election Day in November. The Shakopee City Council approved the ballot addition in August with little discussion.

If local residents vote to abolish Shakopee Public Utilities, the city plans to manage its own water utility and sign a two-year contract with an outside operator to manage its electric utility, according to a recently-approved Request for Qualifications that was discussed at the Sept. 1 Shakopee City Council meeting.

After the two-year contract is up, the council would have the option to sign an agreement with the provider, who could then take control of the electric utility’s assets and responsibilities.

Councilmember Matt Lehman, who voted against the RFQ, said at the Sept. 1 council meeting “it’s misleading to say there’s going to be no employee loss when, if the utility is sold off, there’s no control over whether those employees stay or not.”

City Administrator Bill Reynolds said in two years the city council will know enough about the operation to decide whether to sell the electric utility or keep it within the city, stating the city of Chaska runs its own electric utility as part of a city department and “it’s not rocket science.”

“We can certainly do that here,” Reynolds said. “What we’re basically saying is that in a two-year time frame we’re going to get an idea as to what state the utility is in.”