MI Developments Ends Contract with Oak Tree
MI Developments has ended a lease that allows the Oak Tree Racing Association to operate at Santa Anita Park several weeks after the not-for-profit racing association thought its lease had been tentatively reaffirmed.
“We just got notified today, though we heard about the decision a couple of days ago,” Sherwood Chillingworth, Oak Tree’s executive vice president, said May 14. “It was a surprise after we just had a reaffirmation of the lease.”
Chillingworth told the California Horse Racing Board at its April 15 meeting that the long-term lease at Santa Anita had been reaffirmed and was expected to run through 2016. Oak Tree, a not-for-profit association that has leased Santa Anita for fall racing since 1969, hosted the 2008 and 2009 Breeders’ Cup World Championships. After those two successful events, Santa Anita is under consideration as permanent host site of the Breeders’ Cup.
MI Developments chief executive officer Dennis Mills, however, said the lease had never been reaffirmed.
“We’ve had productive meetings but there was nothing formally concluded,” Mills said May 14. “Under U.S. bankruptcy law, you have the opportunity to give the asset a fresh start. We want to give this asset a totally clean sheet.”
Prior to April 30, Santa Anita was owned by Magna Entertainment Corp., which had filed for Chapter 11 bankruptcy reorganization in March 2009. As part of the reorganization, the Southern California track was transferred to MEC’s parent company, MI Developments. After the reorganization went into affect April 30, MI Developments had 15 days to revise its lease agreements.
Mills said a letter sent to Chillingworth explained that a meeting would be held the week of May 17 to begin developing a “comprehensive plan for California racing.”
“We have to come up with something that is different than the current model,” Mills said. “The current model is broken and cannot be defended. To rubber stamp what is existing is not acceptable and irresponsible.”
While it is possible Oak Tree could lose the lease, Chillingworth said he is hoping for the best.
“We are relying on a belief that they will negotiate with us in good faith,” he said.
If the lease is not renegotiated, then Oak Tree would have to find a new track. Chillingworth said the most viable alternatives are either Hollywood Park or Del Mar.
The long-term future of Hollywood Park is also in question because a representative of the Hollywood Park Land Co. told the CHRB March 19 that plans to demolish the Inglewood track and develop the 238-acre site are progressing, but that until the economy improves, racing will continue on a meet-to-meet basis.
Chillingworth said he believes, because of the poor state of the Southern California real estate market, that racing at Hollywood Park will continue for a couple more years.
Mills indicated a plan to reinvigorate California racing would be ready and presented to the CHRB by June.
“I am not talking about just Oak Tree,” Mills said. “I am talking about working with fairs, too. New ideas is our hope. That is our desire.”
An update of the Oak Tree lease arrangement is on the agenda of the next CHRB meeting, which will be held May 20. The board has allocated Oak Tree dates from Sept. 29 to Oct. 31 for 2010.
Oak Tree was formed by Clement L. Hirsch, Louis Rowan, and Dr. Jack Robbins after Del Mar announced it would not race its dates in the autumn of 1968. One year later, Santa Anita management agreed to host autumn racing, and a 20-day meet commenced that performed well in both attendance and handle.
Oak Tree is known for its charitable contributions. In its 40 years of existence, it has given out more than $26 million to various organizations that improve the industry, such as the Race Track Chaplaincy, Winners' Foundation, Grayson-Jockey Club Foundation, and the University of California-Davis. It assisted in the establishment of facilities and programs for backstretch workers as well.
Lenny Shulman and Jack Shinar contributed to this story.
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