The owners of Hawthorne Race Course, who have not been able to get loans to build a casino, also have failed to pay major construction bills, records show.
At least four liens were filed in recent years against Hawthorne or its owners, Carey Heirs properties LLC, by contractors saying they were owed $5.1 million.
The debt calls further into question whether Hawthorne can get financing to build a planned race track/casino combination, known as a racino.
Hawthorne officials said they settled one of the claims, and plan to pay the debt as soon as they get financing for the project. Track President Tim Carey repeatedly has promised that financing was in the works and construction would begin soon, but after nearly five years, it has yet to happen.
The debt takes on added significance because racinos were supposed to save the state’s dying horse racing industry by generating new revenue.
The revelations of Hawthorne’s financial status come as lawmakers are considering whether to revoke an extraordinary monopoly power the track was given under state law to build racinos at its existing track and in the south suburbs.
A Hawthorne spokesman issued a statement that the track is in “the advanced execution phase” of a $400 million financing with an investor that will make the racino a reality.
The unpaid bills are a further sign that lawmakers should revoke the track’s veto power over any racino in a 35-mile radius, state Rep. Marty Moylan said.
“If they ain’t got the money, let’s move on,” Moylan said. “The Carey family is screwing it up for everybody. They should let it go and let surrounding communities open a racino.”
Court documents show that after lawmakers authorized Hawthorne to build a racino in 2019, the track hired W.E. O’Neil Construction Co. as general contractor in 2020 to do demolition and construction at the track in west suburban Stickney.
In 2022, O’Neil filed a lien and a lawsuit claiming breach of contract. O’Neil and several subcontractors did $12 million of work, but Hawthorne paid for only part of it, leaving an agreed debt of $5 million that Hawthorne “refused to pay,” the suit stated.
O’Neil claims in the lawsuit it’s owed that amount plus 12% annual interest and attorneys’ fees, equaling $107,000 by the end of 2022, and accruing $1,400 more each day.
If the debt is not paid, the complaint stated, defendants could be found personally liable, and the racetrack should be sold at auction, with the proceeds to pay its debts.
Hawthorne also took out a series of multi-million dollar mortgage loans, starting in 2016 through 2020, culminating in a $9 million loan from Signature Bank in Rosemont, county documents show.
“Hawthorne has a multi-million-dollar credit facility with its bank, similar to thousands of businesses across the country,” a track spokesman said. “Those proceeds have been used to help rebuild harness and thoroughbred horse racing in Illinois while also funding the expansion development so far. The lines of credit as well as the unfunded agreements with the former general contractor are intended to be repaid in the scope of this soon-to-be completed financing.
“All of this work and the significant capital raise is being done to benefit the future of horse racing in Illinois.”
Since Arlington International Racecourse closed in 2021, Hawthorne has kept racing alive in the Chicago area by hosting both thoroughbred and harness racing.
Another contractor, Milburn Demolition of Bellwood, also filed a lien seeking $430,000 for demo work it did at the track.
Manager James Milburn said they still haven’t been paid, and Hawthorne has only said it will pay when it gets financing.
“We’ve all been hearing that for a long time,” Milburn said. “It’s been a long wait.”
Gurtz Electric Co. of Arlington Heights, also filed a lien against Carey Heirs Properties LLC in 2023, claiming it was owed $1.1 million.
A Hawthorne spokesman said the subcontractor claims were included in the total owed to O’Neil.
Other developers have proposed building a racino if Hawthorne’s monopoly power was lifted. Greenway Entertainment Corp. officials called for an end to Hawthorne’s veto, saying they are ready to construct a harness track racino in Richton Park. Businessman Ronald Awsumb proposed a thoroughbred track in the same town, though industry observers questioned whether the law would allow that.
Dick Simpson, professor emeritus at the University of Illinois at Chicago and a former Chicago alderman, said the gambling expansion was meant to help the racing industry, but the lack of new revenue is delaying the benefits.
“Generally, it’s better to have different companies and individuals compete,” he said. “You end up with a better result.”
Carey proposed a new south suburban racino in 2019 in Tinley Park, partnering with video gaming owner Rick Heidner. But a Tribune story questioned the funding source for the project, and Gov. J.B. Pritzker refused to sell state land for the site, causing the plan to fall through.
This story has been revised to include the correct overall amount of money owned to contractors.
