Cal Expo Granted License, Contingent on Settling Lease Dispute

The California Horse Racing Board granted a conditional license to Capitol Racing Association on July 24 to continue to operate a harness meeting at Cal Expo in Sacramento, contingent on it settling a lawsuit with the fair over its lease arrangement.

The vote was 4-1 with two commissioners absent. Chairman Roger Licht dissented.

Capitol's attorney, Greg Markow, told the board that a letter of intent extending the contract through July 31, 2005, which would settle the legal dispute, has been hammered out with Cal Expo officials, but needs final approval from the fair's board of directors, which is expected at its July 28 meeting. That agreement would reflect the fair board's commitment to allocate $400,000 a year to support a homeless shelter, using harness revenue. Capitol paid an estimated $1.2 million a year under its old lease.

The CHRB set a July 30 deadline for getting the lease extension approved or the license approval would be rescinded.

The current contract for the state's only harness meeting ends July 26 . The next 10-month harness season is scheduled to commence Sept. 26.

Several others have expressed a strong interest in taking over operation of the meeting, which handles an average of $985,000 a night. Total handle for the meet is estimated at $164 million. One of those interested parties, former harness meet operator Lloyd Arnold, was represented by attorney Rod Blonien at Thursday's meeting. Blonien accused Cal Expo assistant general manager Brian May of conducting "bad faith" negotiations with he and others in a recent meeting.

"It apparently was not the intention of Cal Expo to give Capitol the additional two years," Blonien told the board. "We agreed to settle our lawsuit (to force Cal Expo to open the bidding process). But it was not the same agreement just recited here today."

Others who wrote letters expressing interest in assuming control of the harness meeting were former CHRB commissioner Christo Bardis and attorney James L. Kouretas.

After California harness racing dwindled down to only 12 weeks total in the state in 1994 and none in Sacramento, Capitol took over Cal Expo's harness meet in 1995, and expanded it to an almost year-round basis in 2001. Capitol general manager Alan Horowitz urged the CHRB to take action on the license immediately rather than wait until the August meeting, as commissioner John Harris suggested, because of the difficulty of keeping horsemen committed to the state program.

"We're off during August and September and during those two months many horsemen leave the state," he said. "If they leave thinking that the license is up in the air .. If they don't know if Capitol Racing will be running the meet, Cal Expo will lose horses and will certainly be hampered in its effort to attract more horsemen."

Since it first received its lease from Cal Expo, Capitol has never been forced to undergo competitive bidding.

Licht questioned why Capitol had never complied with a CHRB order to provide "impact fees" to Los Alamitos when it moved to Sacramento and took dates that conflicted with those of the Quarter-horse track.

"This dispute has been going on for six years," Licht pointed out. "The complaint was before this board five years ago."

Neil Papiano, an attorney for Capitol, said a lawsuit has been filed over the impact fee issue against the CHRB in Sacramento County Superior Court, alleging the board overstepped its authority in ordering the payment.