The owner of Bay Meadows race track in San Mateo has emerged as the leading candidate to acquire Hollywood Park with a bid of about $275 million, according to a report in the Los Angeles Business Journal
According to the publication, Stockbridge Capital Partners, through its Bay Meadows Land Co. unit, entered the bidding late in the process.
City officials, losing bidders and other real estate sources said Stockbridge, a private equity firm, submitted a price 10% higher than its closest rival and that it has agreed to hire the current owner, Churchill Downs Inc., to manage the race track for three years as it goes through the entitlement process. Horse racing at Hollywood Park will continue during that period.
The Business Journal
reported that those terms are far richer than the next closest bid from a partnership of J.H. Snyder & Co., Bisno Development Co. and Credit Suisse First Boston. The group, whose principals declined comment, offered more than $250 million and a two-year management contract.
Churchill and its investment banker, Lazard Frères & Co., have told a principal of the Snyder-led group to "keep your powder dry" and be ready to resume negotiations should Stockbridge fall out of contention, the newspaper quoted sources close to the process. The Business Journal
noted that other bidders believe they could also re-submit bids if Churchill Downs and Stockbridge can't come to an agreement.
The two sides will now hammer out a "purchase and sale agreement," outlining terms of the deal. Typically, there is a due diligence period when Stockbridge can perform a title and environmental survey, among other checks, on the property. After due diligence, Stockbridge would be required to submit a non-refundable deposit.
The newspaper reported that the emergence of Bay Meadows in the bidding process "enraged some Inglewood (California) city officials who had been told that they would be allowed to interview the two or three finalists on their plans for the property.
"What's asinine is how Churchill Downs has excluded the elected officials who will determine any prospective development," the Business Journal
quoted Inglewood City Councilman Ralph Franklin, whose 4th district includes Hollywood Park. "Developers are pitching war games about what will happen to this site but without talking to us about what residents want to have there."
Adam Alberti, an outside spokesman for Bay Meadows, confirmed that the company had bid on Hollywood Park but declined further comment. Alberti couldn't reach Stockbridge Executive Managing Director Terrence Fancher for comment.
Messages to executives at Churchill Downs and Lazard Frères weren't returned, according to the newspaper.