Ocala’s horse business has grown in size and political clout, even as thoroughbred racing draws fewer people to tracks.

On an overcast October morning, Kevin McKathan leans his elbows on a white board fence and looks out over a small horse ring. A reddish-brown thoroughbred filly, sired by Breeders’ Cup sprint champion Runhappy, trots by in front of him.

“She’s purrrty,” he says. “The way she walks — the way her shoulder is laid in — she’s really nice. I probably don’t have enough money to buy her.”

McKathan was shopping at a yearling sale in Ocala, where he owns and operates a thoroughbred training facility. Each fall, he buys several yearlings at auction, calculating that with the right training and grooming, the horses will increase in value during the next year. The practice — the equestrian equivalent of flipping houses — is known as pinhooking.

McKathan’s farm annually trains about 100 racehorses, both his own and for clients. Five years ago, he and his brother, J.B., now deceased, trained Triple Crown winner American Pharoah for owner Ahmed Zayat. McKathan also trained Kentucky Derby winners Silver Charm (1997) and Real Quiet (1998).

Wearing jeans and a weathered ball cap, McKathan pushes up his left shirtsleeve to show off his tattooed upper arm, which features the three Kentucky Derby winners’ names in cursive letters. “When we won the Kentucky Derby back to back in ’97 and ’98, we thought it would be something we’d do a lot of. But we figured out winning isn’t so darn easy. It’s a little special,” he says.

At the yearling auction, McKathan follows Runhappy’s filly into the auction room. Entering the bidding at $20,000, he casts the winning bid of $100,000. “That was good,” he says. “I had a higher number in mind, so I’m happy.”

McKathan figures he’ll spend about $25,000 on food and care during the next six to eight months, hoping to resell the horse in the spring at a profit. A promising well-pedigreed thoroughbred can fetch hundreds of thousands of dollars as a 2-year-old in training, when buyers have a better sense of its racing potential. (All yearlings officially turn 2 on Jan. 1.) Ocala’s annual 2-yearold thoroughbred auctions have been known to attract sheiks and other super-wealthy people from around the world. In 2019, 2,425 thoroughbreds were sold in Ocala for an average of $63,369.

McKathan says he once bought a yearling for $200,000 and resold it five months later for $1.75 million. “The great thing about this business is there’s really no limit on how much they can bring. The markup on a horse can be astronomical,” he says.

Off and running

Ocala’s horse industry began taking shape in the 1950s, when Bonnie Heath II, an oilman and racehorse owner, decided to stand Needles, winner of the 1956 Kentucky Derby, as stud at his farm in Ocala. Over time, the industry has grown big enough for the Ocala region to proclaim itself the horse capital of the world.

The claim isn’t baseless. With one equine for every five people, Marion County has more horses and ponies per capita than any other county in the U.S., according to the Florida Thoroughbred Breeders’ and Owners’ Association (FTBO), an Ocala-based trade group.

More than 6,000 people in the county make their living on horse farms, and many more work in the local feed and tack stores, veterinary clinics and hotels and restaurants that cater to people in the business.

The industry draws tourists: Each winter, thousands descend on Ocala for a three-month show-jumping competition with a purse of $5 million. Ohio trucking magnate Larry Roberts is building what he says will be the country’s largest equestrian complex on nearly 4,000 acres in Ocala (“World Equestrian Center,” page 84).

In recent years, the industry has been helped along by a strong economy and a federal tax break — first enacted in 2008 and extended several times since — that essentially subsidizes the purchase of yearlings. The government allows buyers of thoroughbreds to take 100% of the horse’s purchase price as a business deduction, as long as the owner buys the horse to make money, not just as a hobby, and as long as the horse hasn’t raced yet.

“It’s an instant write-off,” McKathan says. “A rich guy who owes $1 million in taxes, instead of paying the government, might want to spend $1 million on horses and have a shot to make money at the end of the day.”

As Ocala’s horse industry has grown, so, too, has its clout. In April 2018, the Florida Department of Transportation, hoping to ease traffic congestion on I-75, proposed a highway between Tampa and Jacksonville. The industry joined with local business and community leaders to oppose the “Coastal Connector” project, saying it would cut through the heart of Marion’s horse acreage.

In August 2018, after meeting with the heads of Marion’s economic development organization and the Florida Thoroughbred Breeders’ and Owners’ Association, then-Transportation Secretary Mike Dew scuttled the plan. Among the properties that would have been affected was Live Oak Stud, a thoroughbred farm owned by Charlotte Weber, heiress to the Campbell Soup fortune.

Initially, the DOT “thought these were just big fields in the middle of nowhere,” says Louisa Barton, director of equine engagement at the Ocala/Marion County Chamber & Economic Partnership. “They had no idea they were cutting through some of the most beautiful properties we have.”

Issues

For all its success, the industry faces challenges, starting with changing attitudes toward animal care and safety, as reflected in Ringling’s decision to shut down its circus and controversy that led SeaWorld to phase out orca shows. As of November, 35 racehorses had died at Santa Anita Park in California despite new anti-doping and drugcontrol rules aimed at improving the track’s safety record.

Last fall, shortly after voters statewide banned greyhound racing in Florida, Ralph DeMeo, a Tallahassee-based lawyer and animal rights advocate, began getting calls from people urging him to take on the thoroughbred industry.

“There’s no question that abuses go on,” says DeMeo, a shareholder with Baker Donelson. Most, he says, involve retired, non-champion horses. “Sure, the Secretariats of the world are treated like gold because they’re worth gold. But most horses — no,” he says.

Thoroughbred racing has no central governing body, and regulations vary by state. In Florida, the state Department of Business and Professional Regulation’s Division of Pari-Mutuel Wagering oversees horse tracks. Last year, at Florida’s largest thoroughbred track, Gulfstream Park in Hallandale Beach, 25 racehorses died over 17,763 starts, according to the Jockey Club’s Equine Injury Database, equating to 1.41 deaths per 1,000 starts. That represented a downward trend from a decade ago and was slightly better than the national average of 1.68 deaths per 1,000 starts in 2018.

McKathan says he can’t think of another animal that’s as well cared for as a racehorse. “We stay up all night and do everything we can to make them as happy and healthy as they can be,” he says. He worries about the animal rights movement — “the concern is having people vote on legislation without any idea about what goes on.” But he doubts that horse racing will go the way of dog racing. “The thing about horse racing is there’s a lot of money behind it,” he says.

DeMeo concedes that it’s unlikely that horse racing could be outlawed in Florida anytime soon. “Taking on a failing, financially strapped, relatively low-end sport like greyhound racing is a whole different challenge than taking on the multi-millionaires, sheiks and international money that is associated with thoroughbred racing,” he says. “The animal welfare groups that I know and work with are afraid to go near it.”

If the industry is safe from legal challenges for the moment, it continues to face increased competition from Vegas-style casino resorts and online gambling. Attendance at horse races has been declining for decades. Hialeah Park, which once attracted celebrities and heads of state — Winston Churchill reputedly was a fan — stopped hosting thoroughbred races in 2001. Miami’s Gulfstream Park West (formerly Calder Race Course) plans to replace horse racing with jai-alai, to the consternation of Florida’s thoroughbred industry.

Under state law, only pari-mutuel facilities that allow betting on jai-alai games or horse racing can also have a poker room and slots gaming. Some tracks appear to keep horse racing just so they can make money from cards and slots. When Gulfstream West changes over to jai-alai, Florida will have only two thoroughbred tracks: Gulfstream Park in Hallandale Beach and Tampa Bay Downs in Oldsmar.

The future

Even with those challenges, the industry in Ocala remains bullish on its prospects. It’s working to build stronger relations with the community and, within the industry, is marketing itself as an alternative to Wellington, with land that’s more abundant and cheaper.

Long term, the biggest challenge to the business is likely to be the traditional Florida issues of development and sprawl. For years, Marion has been one of the fastest-growing counties in Florida, thanks largely to the Villages, the 115,000-resident retirement community about 20 miles southeast of Ocala. Additionally, Ocala’s location between Jacksonville, Orlando and Tampa has made it a warehouse and distribution hub for companies like FedEx and Chewy.

Last year, local residents formed a non-profit called Horse Farms Forever to protect Ocala’s horse culture by monitoring land-use decisions.

But even McKathan acknowledges he’d leave the area for the right price. He notes that boarding and training horses requires a lot of land. His property sits on 200 acres north of Ocala, near U.S. 301 and I-75, and he recognizes its potential value.

“I actually have a vision that my farm should be an Amazon distribution center,” he says. “Eventually, it’s going to be outgrown as a horse farm.” If that happens, he says, he’ll cash in and move on — training thoroughbreds somewhere else.

“It’s a neat, neat way to make a living,” he says.

Strenghtening Ties

Ocala-area residents haven’t always felt connected to the local horse industry. “If you stop at any gas station in Lexington (Ky.) and ask people what horses are racing today, they know. Here, there’s a big division.” In Ocala, “the town doesn’t know a lot about the country, and the country doesn’t know a lot about the town,” says Louisa Barton, director of equine engagement at the Ocala/ Marion County Chamber & Economic Partnership. Barton’s job — the only one like it in the U.S., she says — is to engage local residents through initiatives like “Equine 101” classes for chamber members, a weekly radio show and an annual all-breed horse parade in downtown Ocala. Plans also are under way to adorn downtown sidewalks with plaques featuring the names of legendary Ocala horses.

‘Eventing’

Clayton Fredericks is an Australian Olympic silver medalist in eventing, an equestrian sport that combines dressage, cross-country and stadium jumping. Coming to Ocala as a technical adviser to the Canadian eventing team in 2012, he and his wife, Lucinda, now own and operate Greenbrier Farm, a stable with about 30 horses near Ocala. Fredericks, who hopes to compete again for Australia in the 2020 Tokyo Olympics, also gives riding lessons and trains and sells horses for equestrian sports.

Horses Sold at Auction

Ocala Breeders’ Sales is the state’s largest thoroughbred auction house, drawing buyers and sellers from around the world. It hosts six sales annually.

Training a Yearling

Yearling trainers like Kevin McKathan are independent contractors who charge a daily fee, plus a percentage of prize money — and in some cases a share of breeding rights — to feed and care for a horse while getting it racetrack-ready. McKathan’s daily rate is $75 and includes food and boarding. He and his 30-person staff train dozens of horses from October to June.

The first step is to get the yearling used to wearing a bridle and saddle and having a rider on its back, McKathan says. The horse then learns to breathe and move with tack on and to respond to the rider’s reins and leg pressure. “As long as you can turn them and stop them, you can pretty much ride them,” he says.

After two weeks, the horse starts jogging on a small racetrack, gradually building up endurance and speed, he says. The horse also learns to enter, stand in and exit a starting gate. “Some horses are claustrophobic. Them ones are not fun,” he says. “But most accept it very easily.”

Once a horse can run a steady half-mile “breeze” and is “sound and happy,” he says, it’s shipped to a racing trainer. “By June, they’re off to the races somewhere.” Thoroughbreds born in the same year share the same official birthday — Jan. 1. Most thoroughbreds begin racing at age 2 or 3 and retire by 4 or 5. The Kentucky Derby is open only to 3-year-olds.

Ocala’s Horse History

Up until the 1950s, Ocala was largely rolling pastures dotted with live oak trees. In 1950, Bonnie Heath II, an oilman from the Midwest, moved to Fort Lauderdale and met Hugh Fontaine, a charismatic horse trainer. Several years later, Fontaine persuaded Heath and partner Jack Dudley to race a thoroughbred colt named Needles.

In 1956, Needles became the first Florida-bred horse to win the Kentucky Derby. In 1957, Needles retired and stood as stud at a farm in Ocala. Other thoroughbred breeders and trainers soon followed, drawn to Ocala’s mild winters, mineral-rich soil and spring-fed aquifer — all good for horse health, says Tammy Gantt, associate vice president at the Ocala-based Florida Thoroughbred Breeders’ & Owners’ Association.

In 1999, the association trademarked the slogan “Horse Capital of the World” to promote Ocala/ Marion County’s equine industry. Today, Ocala also is home to a slew of equine services providers, including veterinarians, dentists, blacksmiths and farriers, feed and tack stores and horse transportation companies.

Coming in 2021 World Equestrian Center

In the horse world, Ocala is best known for raising thoroughbreds, but trucking magnate Larry Roberts and his family are changing the mix with a large new commercial development for show jumping, dressage and other equestrian sports.

The project, called World Equestrian Center, is being built on nearly 4,000 acres northwest of Ocala. When it opens in 2021, it will have a three-acre, 8,000- seat outdoor event venue, a 2,500-seat stadium, four indoor and 18 outdoor arenas and 2,100 climate-controlled horse stalls, as well as an on-site veterinary clinic, RV park and dog-grooming services. There also will be a “five-star” 248-room hotel and a chapel for destination weddings.

“They can have a trade show, a huge meeting, a dressage show, a cross-country event and a dog show all at the same time,” says Louisa Barton, director of equine engagement for the Ocala/ Marion County Chamber and Economic Partnership (CEP). “There’s really nothing else like it,” adds CEP President and CEO Kevin Sheilley.

Larry Roberts made his money by founding R&L Carriers, an interstate trucking company based in Wilmington, Ohio, in the 1960s. He and his wife, Mary, who have three grown children, got hooked on American quarter-horses and built a large show facility in Wilmington. In the late-1990s, they moved to Ocala and established a farm for breeding and selling western pleasure horses.

“Ocala is a really great place to bring up kids and horses,” Mary Roberts told Ocala Style Magazine in 2005, praising the area’s “friendly people and the beautiful oak trees. To me, it’s heaven.”

In the early 2000s, the family launched Golden Ocala, a gated golf-course community where homes sell for more than $1 million. The Roberts’ son Roby, whose wife and daughter enjoy riding and showing horses, leads Fort Myers-based RLR Investments, the family’s real estate company. Many of the details of the equestrian center project, located next to Golden Ocala, are still being worked out. Larry and Mary Roberts no longer do interviews, according to a publicist, and Roby Roberts only answers questions via e-mail, with questions and answers vetted by a lawyer.

The Roberts family isn’t the first to try to capitalize on Ocala’s potential as an equestrian destination. New York-based Horse Shows in the Sun (HITS) has long produced an annual, three-month hunter-jumper competition at a facility it owns in Ocala. The HITS Ocala Winter Circuit, one of four hunter-jumper series produced by HITS nationally, takes place from mid- December to mid-March.

The area also is home to Live Oak International, an annual three-day driving and jumping competition geared toward high-level equestrians. Last month, the 954-acre Ocala Jockey Club hosted a three-day Olympic-qualifying event for cross-country equestrians.

Kristen Vale, show manager for HITS Ocala Winter Circuit, says HITS welcomes the Roberts’ project as a “positive,” noting that the development, with its climate-controlled arenas and barns, will attract equestrian competitors and enthusiasts to Ocala year-round. HITS, which makes money from competition entry fees, feed and supplies sales, stall fees, concessions and corporate sponsorships, will continue as usual in Ocala, she says.

Ocala’s emergence on the world equestrian stage makes it a competitor to Wellington, a winter playground for the world’s richest equestrians, including the daughters of Bruce Springsteen, Michael Bloomberg and Steve Jobs. Bill and Melinda Gates, whose daughter Jennifer is an accomplished equestrian, own an estate in Wellington.

The Palm Beach County community is running out of land, however. As part of its vision for Ocala, the Roberts family plans to develop three-acre lots for about 300 “mini-farms” next to its equestrian complex.

“Wellington has no land left to buy. A lot of the Wellington crowd will want to come up here to be part of the World Equestrian Center,” says Barton, who also is a Realtor. “Those are the people we’re hoping will buy farms up here — hopefully from me,” she says, laughing.

Horses in Florida

Florida is home to about 387,100 horses, third-most after Texas (767,100) and California (534,500), according to the American Horse Council, a Washington, D.C.-based trade group. About 717,000 acres in Florida are used for horse-related purposes, according to the council, which estimates that Florida’s horse industry directly contributes $2.4 billion to the state’s economy and employs more than 47,000 people. Horse shows and racing are the largest sectors, accounting for nearly 33,000 jobs statewide.

Well-Heeled Owners

Charlotte Weber, granddaughter of Campbell Soup founder John Dorrance, owns Live Oak Stud, a 4,500-acre horse farm and cattle operation. Her son, Chester, is a multiple national title holder in carriage driving.

Frank Stronach, founder of Magna International, an auto parts company, owns a 3,800-acre horse farm called Adena Springs South. Stronach, who also founded the Stronach Group, which owns and operates thoroughbred racetracks, including Gulfstream Park, has horse farms in Kentucky and Ontario as well.

Liberty Media Chairman John Malone, the largest individual landowner in the U.S., added the 800-acre Bridlewood Farm to his holdings in 2013, paying $14 million. Smarty Jones, a Kentucky Derby and Preakness Stakes winner, was trained at Bridlewood in the early 2000s.

Mandy Pope, who co-owns Henderson, N.C.-based Variety Wholesalers, the parent company of Roses and Save-A-Lot stores, breeds and races horses under the name Whisper Hill Farm. She recently spent $8.2 million at auction in Keeneland, Ky., to acquire a yearling filly sired by 2015 Triple Crown winner American Pharoah — outbidding Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai.

Paul Bulmahn, who founded ATP Oil & Gas in Houston, opened GoldMark Farm, a 2,600-acre thoroughbred training facility, in the mid-2000s. GoldMark’s trainees include 2011 Preakness Stakes winner Shackleford.

Donald Dizney, founder of Orlando-based United Medical, owns Double Diamond Farm, a 550-acre horse breeding, boarding and training facility.

Jessica Steinbrenner, daughter of George Steinbrenner, runs Kinsman Farm, an 880-acre horse farm purchased by her father in 1969.

 

Read more in Florida Trend's December issue.

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