The race for control of Redcar

A boardroom bust-up. An aristocratic family split. Friends of many years divided in furious arguments. What is going on at Redcar racecourse? By James Moore

Approaching Redcar racecourse, it is hard to believe that this place has created a split in an aristocratic family, involved friends of many years in furious arguments and helped to bring about a minor political earthquake - a council where Labour won.

Situated in the centre of the North Yorkshire seaside town, it is a sweet little track although its grandstands, dating from the 1960s, look past their best and in need of investment, which could be a metaphor for Redcar itself.

There has been racing here since the late 1800s and the track's racegoers - meetings typically attract between 3,000 and 7,000 of them - are currently treated to competitive, if mostly modest, summer Flat racing at 15 annual fixtures.

Last year, the course came to national prominence when it surprised racing (and probably itself) by offering to host the Lincoln Handicap - the traditional April curtain raiser for the turf Flat season. It pulled it off, too.

Some seven months later Redcar was back in the spotlight, this time for all the wrong reasons. The unwanted attention was caused by a spectacular boardroom bust-up in which the Marquis of Zetland ousted all but one of the former directors and took back the position of chairman he had relinquished several years ago.

The reason? The Marquis fiercely objected to plans to sell three acres of land at the top of the course to George Wimpey to raise £3.5m, with the aim of using the cash for business development. In a twist, which adds a touch of the soap opera to this particular drama, his son, the Earl of Ronaldshay, had resigned as a director just days before the Marquis had the chance to sack him.

His opponents suspect darker motives for the boardroom coup, fearing he wants to sell off the entire track. Since the coup, last November, the Marquis has been promising to buy out the track's 99 other shareholders with the help of a multinational consortium of, apparently, super-rich investors.

"They are very substantial people, mostly Middle Eastern, some Russian, probably some US," says the Marquis. But asked to elaborate, he will only say: "You'll have to wait."

The Marquis's long-term aim, "my dream" he says, is to build an all singing, all-dancing super-course, two miles down the road from Redcar on his 537-acre Dunsdale farm. It would boast 60 race days a year - both flat and jumps - along with numerous other leisure operations. He has plans for similar centres in the Ribble Valley, Lancashire, and, rather strangely, war-torn Sri Lanka.

So far, however, despite promising to table a bid in February, no offer has been forthcoming and in the meantime he has attracted some powerful opponents, who have grave doubts about the Marquis's motives. They doubt whether his plans will ever get off the ground and fear for the town's future if the course is moved. A full-scale closure, in their view, simply does not bear thinking about.

Ranged against the Marquis is the local council, back under Labour control, the local MP Vera Baird - a junior minister in the Department of Justice - and his old friend Peter Steveney, affectionately known locally as "the galloping major". A friendship of many years did not prevent the Marquis from unceremoniously kicking him off the Redcar board in November and it has not prevented Steveney from waging a guerrilla campaign against the chairman's plans ever since.

"A pipe dream" is how Steveney describes the Marquis's idea. "He sounds very plausible but if he wants to build his leisure complex, then let him, just not at the expense of the existing course." Steveney not only has the support of local politicians but can boast a sheaf of supportive letters from Derby-winning trainers such as William Haggas, Paul Cole and Michael Bell. Trainers are fond of Redcar. Its feature races, the Tote Two Year Old Trophy and the Zetland Gold Cup, are popular and valuable events, and the track is seen as a good place to give juvenile thoroughbreds their racecourse debut.

Recent work to improve the course has gone down well, and the trainers have put pen to paper to vocally state their opposition to any change of management.

The major says of the Marquis: "I like him. We have been friends for years. We both live in Yorkshire and we both go racing. He and I started this game [trying to boost racecourse income by adding other leisure facilities] when we tried to save Stockton racecourse many years ago but he just won't let this silly idea go. I just don't think he has thought it through."

Steveney believes that the interests of minority shareholders in the course are not being served by the current board and has already contacted the Department of Trade & Industry with a complaint. He argues that the new board all have strong connections to the Marquis. Director John Sanderson and the Marquis have sat on the boards of companies together, such as Catterick Racecourse and International Racecourse Management, in the past and have a long association. Mr Sanderson is related to Jill Garrett, the only surviving member of the old board, while the fourth director, Alison Baptiste, is Mrs Garrett's daughter.

The Marquis owns about 20 per cent of the business while the Garrett family account for another 35 per cent.

"We believe they cannot represent the interests of minority shareholders effectively," says Steveney, who says the mooted price of about £10m for 72 acres of land compares poorly with the £3.5m for three acres offered by George Wimpey.

Steveney also says he has found a "white knight" backer for a counter-bid, involving a major racecourse group.

He accepts that the racecourse cannot continue to operate in the way it has since time immemorial. The directors were given a nasty shock in 2004 when a picture rights deal with the racing channel At The Races collapsed, blowing a massive black hole in its finances. The resultant legal actions - with ATR on one side and the tracks on the other - were ultimately resolved, and Redcar signed up with a new channel - Racing UK - allowing directors to breathe sighs of relief.

Nonetheless, the affair acted as a wake-up call. With just 15 race days a year and a Sunday market, the course is only barely profitable, a situation many of Britain's smaller racecourses will be familiar with, as they look nervously towards their futures and the need to replace creaking facilities with modern alternatives.

Accounts filed at Companies House show that in the year ending 31 December 2005, Redcar Racecourse made an operating loss of £936 on turnover of £2.1m. However, the numbers were flattered by a £159,000 one-off gain from selling its shares in SIS, a broadcaster that supplies pictures to betting shops, a windfall that will not be repeated. During the previous year - at the height of the At The Races dispute - Redcar reported a thumping loss of £250,000.

To rectify this unhappy situation, consultants were commissioned to come up with ideas about how the course might increase its income. Had the old board got its way, the consultants' suggestions of using it for conferencing, building a mid-range hotel and hosting series of non-racing events would have been funded by the sale of the 3 acres to George Wimpey.

Says Steveney: "There is not much mid-range housing in Redcar. To have the apartments that George Wimpey was planning overlooking the course would have been a brilliant idea. That would have given us money to invest in the facilities."

But the Marquis says this was the "wrong decision". He is unapologetic about his operation to oust the old board. Would he have fired his son had he not resigned? "Absolutely," he says. "He was part of the board that made the wrong decision. He very sensibly took the decision to resign before we held the extraordinary general meeting."

Despite this, the Marquis, who is a charming and plausible talker, professes to be deeply hurt at what he believes are "misrepresentations" of his plans, not least the suggestion that Redcar could be sold off by the new owners at a huge profit, while the new super-course is left in limbo.

"Look, racing at Redcar is in my blood," the Marquis protests. "It was founded by my family. We acted in November because we felt that the shareholders were not being involved in the sale of the land. The freehold belongs to the shareholders and I felt that they should have been asked."

He claims to have the support of the majority of shareholders for his takeover plan and flatly denies the claims of his opponents that his fellow directors are not as independent as they might be.

"They are entirely independent people and I absent myself from the board whenever the bid is discussed, as is right and proper," he says.

"My ambition and intention is to build a super racecourse within two miles of Redcar that will last for 200 years. The current course will have difficulty passing its safety certificate within ten. I have no intention of stopping racing at Redcar. Racing will continue at the existing course until the new one is built, then it will probably be sold off for development. I really can't believe why a Labour council would be against a project like this."

But they are. George Dunning's Labour group wrested control at the last election from a Tory/Lib Dem coalition with the help of a couple of independents. They did this by gaining six seats, including the ward bearing the Zetland family name, a remarkable achievement on a black night for the party in most of the rest of the country.

Part of the reason for their success was an unequivocal pledge to keep racing in Redcar.

Cheerfully combative, Dunning says: "We will fight any attempt to take racing out of Redcar by any legal means. Vigorously. The racecourse is a green lung in the centre of Redcar and it puts this town on the map. Lots of local businesses rely on it. I don't think the people in Dunsdale want the alternative anyway and it violates the council's development plan."

Ms Baird concurs, saying of the super-course proposals: "It is an outdated concept anyway. I am worried that now the course will be left to stagnate."

Drinkers in the Yorkshire Cobble, situated near the course, appear to feel the same way. A straw poll found no support whatsoever for any change to the status quo. They like being able to walk down to the track, and point out that visitors can reach it after a five-minute walk from the local station.

Much now depends on whether a bid is forthcoming, from either side, and on the reaction of Mrs Garrett and her family to it. They could effectively act as power brokers.

Despite feuding interest groups, the lukewarm support of the bookmaking industry and the malign influence of regulatory bodies such as the Office of Fair Trading, Britain still boasts 59 racecourses, more per head than anywhere else in the world with the exception of Ireland. Redcar has some stout defenders, but as the current impasse continues, work to put the course on a more stable financial footing is not being done.

A bend has been realigned, to allow the Wimpey land sale to proceed, although the work meant the course was not ready for the opening of the season and two fixtures had to be transferred. But now there will be no sale and the future is open to question.

Whether the course will still be among the 59 in 10 years' time is open to question. Certainly, a brief walk around the town is enough to convince anyone that it desperately needs what is its number one attraction. The whip currently appears to be in the hands of the Marquis, but the Garretts could quickly change the outcome of this particular race. Thousands of punters in Redcar are hoping that this is exactly what they do.