Tariff Headaches Delay $1 Billion Kentucky Derby Rennovation: Forbes Unleashed
Tomorrow marks the running of the Kentucky Derby, however, the $1 billion renovation of Churchill Downs, initially planned, has been temporarily paused.
Steve Forbes from Forbes Media jumps on the panel of 'The Big Money Show', spilling the beans on the ripple effects of soaring tensions between the U.S. and China in trade relations.
While eager thoroughbreds prepare for the Kentucky Derby at Churchill Downs, a planned bombastic $1 billion makeover of the iconic racetrack is facing a standstill for now.
Churchill Downs took the limelight around 10 weeks ago, announcing grandiose capital projects intended to upgrade certain sections of the racetrack. The total cost of these projects? A cool $920 million.
In the proposed plans, the company was eyeing 13,300 new seats and premium hospitality zones in an 11,500-seat area beyond the finish line, expanding the Sky Terrace, and developing buildings for premium ticket holders in the infield.
They also had their sights set on permanent structures for the general admission section of the infield. More than a dozen buildings were in the works for the ordinary folks watching the 'Most Exciting Two Minutes in Sports'.
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But last week, Churchill Downs broke the news – they were putting the projects on ice.
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Here's why:
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You guessed it – President Trump has been shaking up the market with tariffs against various countries, including the U.S. imposing its own tariffs in return.
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Bill Carstanjen, CEO of Churchill Downs, made the situation crystal clear in their earnings call. Apparently, "a lot has changed" since the original announcement, including the threat of "significant inflation, driven in part by the new tariffs that the U.S. intends to charge on products from almost every country in the world."
What's more, those new tariffs have introduced "unanticipated and currently unquantifiable expected cost [increases] in most materials."
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Don't expect these mega-projects to unearth anytime soon, as Churchill Downs will take the next few months to assess the shifting economic climate and reevaluate the sequence of their multi-year projects.
"The Kentucky Derby is completely committed to growing through the prudent timing of capital investments over the long term," Carstanjen insisted.
Despite the stalling of the $1 billion project, Churchill Downs isn't calling it a day on capital investments completely. They've announced plans for renovations on the Finish Line suites, Trophy Room, and Mansion, at an estimated cost of $25 to $30 million.
Churchill Downs first hosted the Kentucky Derby in 1875, and this year's running marks the 151st race, with some of the competitors contending for the prize being Journalism, Sovereignty, Sandman, and Burnham Square.
The Kentucky Derby has a significant impact on the local economy each year, with the Kentucky Department of Agriculture estimating the economic effect of last year's race at a hefty $400 million.
| Ticker | Security | Last | Change | Change % || --- | --- | --- | --- | --- || CHDN | CHURCHILL DOWNS INC. | 93.72 | 1.23 | 1.33% |
Stay tuned for more updates on the impact of tariffs on the Kentucky Derby and the Louisville economy... it's a wild ride!
- Steve Forbes, from Forbes Media, discussed the implications of escalating US-China trade tensions on 'The Big Money Show'.
- The planned $1 billion renovation of Churchill Downs, venue for the Kentucky Derby, is facing a delay.
- Churchill Downs announced capital projects worth $920 million, aiming to upgrade various sections of the racetrack.
- The proposed renovations included 13,300 new seats, premium hospitality zones, expansion of the Sky Terrace, and buildings for premium ticket holders.
- Plans for permanent structures for the general admission section of the infield, more than a dozen buildings, were also in the works.
- However, last week Churchill Downs announced they were postponing the projects due to increased uncertainties and potential inflation from tariff and trade disputes.
- Bill Carstanjen, CEO of Churchill Downs, shared that "a lot has changed" since the original announcement, including the risk of significant inflation due to new tariffs.
- Despite the stalling of the $1 billion project, Churchill Downs is still considering renovations on the Finish Line suites, Trophy Room, and Mansion, at an estimated cost of $25 to $30 million.
