After failing to attract a qualified bid for Santa Anita Park this summer, bankrupt Magna Entertainment Corporation is prepared to try it again early next year. Meanwhile, a committee of horse owners from the Thoroughbred Owners of California is continuing to negotiate the purchase of the picturesque 303-acre racetrack, site of the 2009 Breeders' Cup.
On Oct. 28, U.S. bankruptcy judge Mary Walrath in Delaware approved a new timeline for the proposed auction of Santa Anita, located in the Los Angeles suburb of Arcadia.
Initial bids are due Feb. 10 with a leading or "stalking horse" bidder determined by Feb. 17. An auction of the property is set for Feb. 25 with a court sale hearing to take place the following day. All of this is dependent on an initial qualified bid being submitted, which didn't happen this summer and forced the cancelation of the first auction in September.
Michael Wildish, a representative for Miller Buckfire & Co., the company MEC hired as a bankruptcy adviser and investment banker to market its properties, said he is hopeful that will not happen again.
"Certainly the credit markets are substantially better than they were then," Wildish said. Tight money -- combined with declining track revenues and uncertainty over Hollywood Park, which was undergoing the entitlement process for the eventual redevelopment of the Inglewood site -- helped form a "double whammy" that prevented potential investors from stepping forward earlier, Wildish explained.
With Hollywood's plans approved, even though the project is stalled due to the poor economy, there is more certainty about the future, Wildish noted.
"We have a better situation than it was and hopefully that will succeed in bringing more people to the table," he said.
Wildish declined to discuss the ongoing talks with the TOC's acquisition committee, known as the Thoroughbred Racing Association of California, but did say that other groups have expressed interest in Santa Anita as well.
TRAC chairman Arnold Zetcher said that unlike other interested parties, his four-person group is only interested in preserving quality racing in California. The proposal he's pushing is for TRAC, operating outside of the TOC, to own and operate the track on a non-profit basis with any profits to be put back into the track and purses. He said he wants to continue discussions with Miller Buckfire leading up to the bidding deadline.
"This is a not-for-profit plan," Zetcher said. "We have a lot of support (within the industry). It is all for the track and for the horsemen."
He said the main aim of TRAC has been to attract investors and "establishing the true value of the property and the racetrack."
But that is complicated by many factors, he said, such as dwindling racetrack revenues, which is accelerating due to falling wagering handle, the decline in the foal crop in California and the effect that will have over the next five to 10 years, and the eventual closure of Hollywood Park, which will mean additional racing dates to the region's surviving tracks.
"We have analyzed it just about every way we can," Zetcher said
He said he could not discuss the figures being negotiated with Miller Buckfire. Magna paid $126 million for the track in 1998 and made a multi-million dollar investment in renovating it soon after. For comparison, Magna bought Lone Star Park in Grand Prairie, Texas, for $99 million in 2000. Following the bidding process, a subsidiary of the Chickasaw Nation of Oklahoma received court approval Oct. 28 to take ownership of Lone Star for $47.8 million.
"We have to be realistic ... so that two, three, four, five years down the road, we're not stuck with something that we can't make work," Zetcher said. "We're doing this for the love of the sport, but we have to know what it will take to make it successful, so that it will always be here.
"Santa Anita racetrack is one of the most beautiful places in the world. If racing can't make a go of it there, then we are really in trouble."