MEC to Sell San Luis Rey Downs to Subsidiary

Magna Entertainment Corp. said June 7 it has agreed to sell its San Luis Rey Downs training facility in Southern California to a subsidiary of MI Developments, its parent company, for $24 million.

San Luis Rey Downs, which sits on 205 acres in Bonsall, about 40 miles from San Diego, was said by MEC officials to be one of the assets the company planned to sell in an effort to reduce debt. As of April 30, the net book value of the real estate and other fixed assets at San Luis Rey Downs was $6.2 million, the company reported.

Under the agreement, a subsidiary of MEC will lease the training center for three years. The lease provides for a “nominal annual rent” and can be terminated by either party on four months’ notice, according to a release.

MEC officials said San Luis Rey Downs has served as a training center “for horses that run primarily at non-MEC racetracks in Southern California.” The major tracks in the region are Del Mar, Hollywood Park, and Santa Anita Park, which make up the Southern California circuit; MEC owns Santa Anita only.

“Over the period of our ownership (of San Luis Rey Downs), we have offered other racetracks and industry stakeholders the opportunity to participate with us in the ownership and financial burden of providing the facility for use by the entire industry,” the MEC statement said. “We have been unable to consummate such a transaction and accordingly, the facility was designated non-core to our operations and has been sold.”

A special committee of the MEC board of directors considered and recommended the transaction, which was approved by the full board.