Pursuing perfection
Erica F. Curless
Staff writer, The Spokesman-Review
February 10, 2008
HARRISON, Idaho – Marshall Chesrown unveiled his newest investment during the Super Bowl last weekend – a bay quarter horse foal named Halftime.
The colt's birth, witnessed by a dozen people gathered for the game at Black Rock Ranch in Harrison, is part of the local developer's ambition to become one of the largest quarter horse breeders in the United States.
With about $6 million in top-of-the-line performance horses bred for the sport of cutting – a competition that mimics Old West ranch work – Chesrown is close to achieving a ranking among ranches more typical of Texas than the very southern shore of Lake Coeur d'Alene in North Idaho's remote mountains.
Many people in the region only know Chesrown, 50, for his multi-million-dollar projects, including the Club at Black Rock, North Idaho's first exclusive golf retreat, and Kendall Yards, the downtown Spokane redevelopment project north of the Spokane River. But the Spokane Valley native, who made his fortune selling cars, spends his weekends riding horses and studying genetics to figure out the best combination of bloodlines to make champions.
And it's working.
In October, Chesrown's 2-year-old colt Sallys Little Pepto sold for a record $200,000 at one of the nation's largest auctions of cow horses, which are agile horses trained for herding cattle. A Black Rock horse has topped that Reno sale for the past three years. The average sale price for a Chesrown horse is about $45,000.
"He's come to the front quicker than anyone I've ever known," said auctioneer Don Green, of Alabama, who auctioneered Sallys Little Pepto's record-breaking sale. "He's an astute businessman. He's made a name for sure. He's good and straight up."
Selling horses is similar to selling cars. Chesrown wants his equine inventory as dependable as the Chevrolets he used to sell.
Chesrown's motto – consistency is magic in business – figures prominently in the promotional video he sends to people interested in buying a horse or semen to breed their own mares.
Although horses are Chesrown's passion, Black Rock Ranch is anything but a hobby.
"I'm a businessman, not a cowboy," Chesrown said, adding that he's not giving up the development business.
But riding cutting horses is his pride and only true source of relaxation. The man who owns one of the top golf retreats in the nation doesn't golf.
"This is my golf," Chesrown said, watching a trainers ride a black mare named Hagandaz into a herd of cows. Within seconds, the horse has separated a red steer from the herd. The objective of cutting is to keep the cow from escaping with a fast-paced, stop-and-go blocking game.
"This is probably the only thing I've done in many years that when I do it I'm not thinking about business," he said. "When I'm on a cutting horse I just check out. I don't have my phone on. I don't have anything."
Surrogate mamas
Cow horses are born with "cow" instinct – the ability to sense how a cow thinks and moves. Chesrown is trying to perfect a combination of "cowiness," smarts and good looks.
The 2,000-acre Black Rock Ranch, with 9 miles of Coeur d'Alene River frontage, is home to about 400 horses. A breeding laboratory contains equipment similar to that found at top veterinarian schools. It was designed by veterinarian Dickson Varner of Texas A&M University, an expert in stallion reproduction.
"I think Marshall is obviously trying to make it successful and make his horses recognizable," said Bob Schneider, a WSU professor in the school of equine orthopedics who has worked with Black Rock horses. "I do believe he has very good horses and he sure is trying to compete at the highest level."
With two full-time veterinarians and a staff of 40, including herd health managers, trainers and stall cleaners, the ranch specializes in embryo transplants and semen collection from Chesrown's eight stallions, which are worth a total of about $2 million.
"You would probably have to go to Kentucky to find a breeding lab with this level of equipment," Chesrown said.
Semen is collected from the studs every other day during the breeding season, which starts in January and runs through spring. All of Black Rock's mares are artificially inseminated. Chesrown said the artificial process is safer and allows for exact breeding dates.
The semen sells for $1,500 to $5,000 to horse owners across the country. It's shipped in lead-lined cooling containers by private plane or FedEx.
Many of Chesrown's show mares never give birth to their own colts. That's so they can continue competing in cutting events and promoting Black Rock Ranch. Yet embryo transplants allow the mares to produce several foals each year.
"Right here we have a $500 mare with a $50,000 baby," Chesrown said, pointing to a bald-faced mare with a green collar around her neck, indicating she's a surrogate mama. The pricey baby ran up to Chesrown and curiously nudged his outstretched finger.
About six days after a mare is artificially inseminated, her uterus is flooded with fluid to flush out the fertilized egg. The egg is injected into a surrogate mare.
The whole process takes less than 20 minutes. The success rate of embryo transplants is about 50 percent.
The practice is banned in the Thoroughbred industry, which is why Kentucky Derby-quality race horses sell for millions, Chesrown said. It's supply and demand: Thoroughbred mares can only have one baby a year and they must foal it themselves, so there are fewer higher-priced horses on the market each year.
Quarter horse rules allow embryo transplants, so the market is flooded with quality horses. Prices rarely top $500,000.
The stallions, which live in a barn with a steeple roof, get a lot of attention. But Chesrown, who often stays in the same barn where he keeps a small apartment and a trophy-filled office, said the mares are the most crucial ingredient in making champion babies.
About 100 mares on the ranch either carry their own babies or donate their eggs to surrogate mares each year.
Since January, 13 foals have been born. About 50 more are expected by March.
Expansion and marketing
Like any business, marketing is key. In the horse world that means winning competitions to prove the bloodlines are being perfected back at the lab.
To expand his presence in the industry, Chesrown recently bought an 800-acre ranch in north-central Texas near the town of Paradise – an ironic name, he said, because the place is desolate and ugly. Soon it will become the winter base for the training program.
Chesrown is keeping the breeding operation in Idaho. When Texas gets too hot, the horses and trainers will move north. In many ways, the dual locations parallel Chesrown's golf clients, who play the Club at Black Rock in summer and move to their desert homes in the winter.
Chesrown said many land developers have gotten into the horse business because they have the money and desire, even though they all know it's not the most practical investment. To him, there's something irresistible about horses.
"My old boss in the car business used to say, 'Don't invest capital in anything that eats while you sleep,' " he said. "I've pretty much done everything I wasn't supposed to do."
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