Mounting Debt Stymies Carey Family’s “Racino” in Chicago Suburbs

A plan to develop a casino at a south suburban race course has turned into a litigious nightmare for the property’s owners, heirs of the Carey family.

Contractors have filed at least four liens totaling $6.7 million against the owners of Hawthorne Race Course, alleging unpaid construction work, the Chicago Tribune reported.

The financial woes cast doubt on Hawthorne’s ability to secure funding for the racetrack and casino development — known as a “racino” — which has been in the pipeline for nearly five years.

Lawmakers are considering revoking Hawthorne’s exclusive rights to build racinos within a 35-mile radius, a monopoly granted by state law.

“If they ain’t got the money, let’s move on,” state Rep. Marty Moylan told the outlet. “The Carey family is screwing it up for everybody. They should let it go and let surrounding communities open a racino.”

The track is in the “advanced execution phase” of a $400 million financing deal, which would make the racino development financially viable, a Hawthorne spokesperson said. However, skepticism remains high given the track’s history of unfulfilled financial promise.

Court documents detail a significant breach of contract lawsuit filed by W.E. O’Neil Construction, the general contractor hired in 2020 for demolition and construction at the track. O’Neil and subcontractors completed $12 million worth of work, but Hawthorne allegedly paid only a portion, leaving a $5 million debt. The lawsuit demands that amount plus accrued interest and legal fees, with the potential for personal liability and auctioning of the racetrack if unpaid.

Hawthorne’s financial strategy involved taking out multi-million-dollar mortgages from 2016 to 2020, including a $9 million loan from Signature Bank. Those credit facilities were meant to support horse racing and the racino project, and all debts would be settled upon securing the impending financing, the spokesperson said.

Further complicating matters, other contractors, including Milburn Demolition and Gurtz Electric Company, have also filed liens for unpaid services. Milburn Demolition claims $430,000 for demolition work, while Gurtz Electric seeks $1.1 million.

This planned racino, among others, was expected to rejuvenate Illinois’ struggling horse racing industry by generating significant gambling revenues.

Other developers are poised to step in if Hawthorne’s monopoly is revoked. Greenway Entertainment last year proposed a $300 million racino project in light of the state law possibly being reversed. Roy Arnold, CEO of Endeavor Hotel Group and former president of Arlington International Racecourse, is another interested party.

Dick Simpson, professor emeritus at the University of Illinois at Chicago, advocates for competitive opportunities in the industry, suggesting that diverse participation would yield better outcomes.

—Quinn Donoghue