Oak Tree to Remain at Santa Anita in 2010

Frank Stronach has a change of heart, allowing longtime tenant to remain for one year

The Oak Tree Racing Association will be allowed to use Santa Anita Park for its autumn racing meeting after Frank Stronach, chairman of MI Developments, relented at the conclusion of a long California Horse Racing Board meeting June 22 at Hollywood Park.

During the meeting, Stronach also said that Santa Anita will continue to use its Pro-Ride racing surface through the spring of 2011.

MID, the Canadian company that took control of Santa Anita through a federal bankruptcy proceeding of its former subsidiary, Magna Entertainment Corp., had earlier terminated a lease with the popular Oak Tree, a not-for-profit racing organization that had leased the track since 1969.

Before a packed room of about 150 at the Hollywood Park turf club, Stronach resisted any attempt by board members to get him to reconsider the canceling of the lease, which was to have run through 2016. But after comments made by his friend, horse owner Mace Siegel, the Austrian racing mogul had an abrupt change of heart.

"I'm here to find solutions," he said near the end of the nearly 4 1/2-hour meeting. "I don't want to take a hard line. I would commit that we would have it (Oak Tree) this year, but then we would not have it anymore. I would have no problem."

Board chairman Keith Brackpool and member John Harris told Stronach that Santa Anita would be better off making a one-year deal with Oak Tree than getting nothing if the racing association took its dates elsewhere.

In a confusing twist, Siegel suggested that if the board were to ask him to, Stronach would probably agree to allow Oak Tree another season. Later, Siegel said that Stronach thought the board might re-allocate the Oak Tree dates to Santa Anita instead. "This is the silliest damn argument I've heard in years," he said.

"Those dates belong to Oak Tree and they have for 41 years," noted David Israel, the board's vice chairman.

After Stronach's about-face, Sherwood Chillingworth, executive vice president for Oak Tree, left the meeting room to caucus with four members of the association's board of directors -- original member Dr. Jack Robbins, Dr. Rick Arthur, Richard Mandella and John Barr.

After about eight minutes, they returned, Robbins announcing Oak Tree's decision to accept Stronach's offer.

"Obviously, Mr. Stronach has generously changed his mind and allowed us to stay for another year," added Chillingworth, who had offers to move the race charity organization to Del Mar or Hollywood Park. "I think it's good for the industry and for all of us. I'd like to apologize and thank the people at Del Mar and Hollywood."

It was quite a swing for Stronach, who only moments before had told the CHRB that MID's board of directors had rejected the lease after it "concluded that (the lease) does not  make economic sense."

Stronach said he would do whatever was necessary to keep racing going at Santa Anita. But, referring to Oak Tree, he said, "The one thing I will not do is a suicide mission. This (lease arrangement) will not fit in the long run. In the long run, we don't want to have a tenant in the house; it is as simple as that."

Assuming the one-year interim deal is comparable to its previous leases, Oak Tree would pay about $5 million to operate the five-week Oak Tree meet, which runs Sept. 29-Oct. 31 this year.

As far as a new racing surface, Stronach said removal of the existing Pro-Ride track, which he said is favored by a majority of Southern California horsemen, would not happen until the conclusion of Santa Anita's 2010-11 meet.

Stronach said he favors installing a new type of synthetic track, consisting of a silica sand sub-base with natural or organic cloth fibers mixed in that is in use at some dressage and polo tracks in Spain. Stronach told the board he installed this surface on part of his equestrian center in Vienna.

He said he was opposed to the CHRB's synthetic track mandate a few years ago because he thought it would never work on a track that experiences the high temperatures encountered at Santa Anita in the summer.

The system he is considering uses a subsurface irrigation system that can be controlled for moisture, keeping the racing surface cool while greatly reducing the amount of water required to maintain it. Such a track has never been used for racing, however.

He said that it would be installed first at his training facility at Palm Meadows or a training track to be built on property he owns in Dixon, Calif. Both locations provide conditions that would be similar to Santa Anita.

"We will have the thing in ... the training track by December (2010)," Stronach said. "Then we will have two or three months to test it. (If successful) I think we'll be ready to go right after in April. There would be one more meeting with that (Pro-Ride) track."

A committee from the California Thoroughbred Trainers also made a fact-finding trip to Spain to examine the new surface. The CTT is on record favoring a natural dirt surface for Santa Anita.

While CTT vice president Darrell Vienna said recently that the proposed sub-irrigation track is "promising," he and the committee were concerned that such a track has never been used for racing and questioned whether it would work on a layout that uses banked turns.

But Israel said Stronach is taking the right approach by spending time and money to test it first.

"The board's original decision (mandating synthetic surfaces at all tracks) was a mistake," Israel said after the meeting. "They should have installed a synthetic track at just one track and tested it well instead of making all of the tracks do it."

After hearing strong criticism of board policies from MID after it took control of Santa Anita April 30, members had hoped to get Stronach to talk specifically about his plans to get California racing back on its collective feet.

Brackpool reminded Stronach and company CEO Dennis Mills that a plan from MID for its operations at Santa Anita and Golden Gate Fields is due July 1. The board, at its May meeting, granted the company racing license extensions that expire by the time the commission meets again July 22 at Del Mar.

But Stronach provided no specifics during an extensive, sometimes heated exchange with board members. He seemed more interested in reacting to comments made at the May 20 meeting, which he did not attend.

"I have never threatened to close Santa Anita," he said. "I have a huge investment in horse racing. I've been down here a few times not to threaten but to plead."

Stronach took aim at the board's control of allocation of racing dates, saying, "If you want to open your store, your racetrack, then you should do it when you can get the most customers."

Extolling free enterprise, he said he would have no problem running in competition with Hollywood Park in Southern California (there is no competition for Golden Gate Fields in the north).

"The strongest should survive, those that put on the best show. Those that don't would fall by the wayside," he said. 

Stronach suggested that today's racing customers are interested in making the life-changing score, such as with state lotteries, and said racing should structure new bets to take advantage of that. He said overregulation and a failure to keep up with technology have hurt racing.

"Laws are made by people and can be changed by people. It's very urgent," Stronach said. "We are willing to sit down (to discuss the future) at any time.

"We won't solve everything here today. But time is running out before we lose this wonderful sport."

"I don't think anyone here doubts your commitment," board member Jesse Choper told Stronach. But, noting the horse population is dwindling and purses are declining in the state, he wanted to know how Stronach would reverse the negative trends.

"Maybe there is still time to come up with something" on the legislative front, Choper said. "We must do something to increase the purses here. Horsemen want to be here. I wish we could got off the generalities and get back to specifics. I just want to reduce the level of anger and hostility.

"You are an enormously successful businessman and you understand what is going on here. Is there anything realistic that this board can do, that this industry can do, that can put a dent in this problem?"

Stronach responded that the industry "must be flexible" and patient.

"A lot of your thrust over the years has been for deregulation, which I think a lot of us agree with you (about)," said Harris. "To my knowledge, none of your people have put forward such a bill for deregulation. Going forward, I think we need to get together, I agree ... but I don't think we're going to solve anything by deregulating racing dates."

"Well, that's your opinion," Stronach responded.