The former operator of the Los Angeles Equestrian Center and his investors filed a $200-million claim Tuesday against the city of Los Angeles and parks and recreation officials, alleging that his financial reorganization plan was ruined when the city reneged on a promise to allow the conversion of rental stalls into "horse condos."
J. Albert Garcia, who was ousted from the debt-ridden facility last April by the center's largest creditor, Gibraltar Savings of Beverly Hills, said the claim was filed on behalf of investors who had been assured that the condo plan was approved by the city several years ago.
"I'm doing what I have to do for my shareholders and creditors," Garcia said. "The city brought this on themselves."
The $200 million is what Garcia and his associates said they would have earned had they been allowed to operate the center under the original 50-year agreement with the city.
James E. Hadaway, general manager of the city Recreation and Parks Department, was one of the city officials named in the claim. Hadaway had recommended earlier this year that the city turn down Garcia's "horse condo" plan for the city-owned center, which is on 70 acres in Griffith Park.
The claim was filed with the city clerk's office, an action that usually is a prelude to a lawsuit.
Garcia has repeatedly said that Hadaway conducted a vendetta against him and wanted the center to fail. He said Hadaway had conducted a similar campaign against Los Angeles Zoo Director Warren D. Thomas, who was fired by Hadaway in 1986. Thomas was reinstated by U.S. District Court Judge William J. Rea and was awarded nearly $170,000 in back pay.
Garcia and his attorney, A. Barry Cappello, said in a statement released Tuesday that Garcia's firm, Equestrian Center of America, and its affiliates lost more than $6 million in administrative expenses. The money was spent on developing plans to make the center financially viable and on operating the center from 1984 to the middle of this year, when Garcia was ousted, the statement said.
Under Garcia, the center amassed $27 million in debts. It was losing $200,000 a month, Garcia said. Gibraltar Savings foreclosed last April and hired a temporary operator.
The foreclosure came after a City Council board, the Board of Referred Powers, rejected a financial reorganization plan by Garcia. Under the proposal, the center would have received a $12.3-million loan from Trafalgar Holdings Ltd., a Los Angeles financial firm.
Condos Key to Loan
Trafalgar had stipulated that the loan depended on the conversion of 300 rental stalls into horse condos, which could be sold for $30,000 each, and on the construction of a medieval-theme restaurant where diners could watch jousting matches.
The council panel rejected the plan after boarders protested that their horses would be forced into less desirable stalls if they did not buy the condos. The boarders also said the restaurant would deprive them of exercise space for the horses.
Garcia Tuesday called the board "a kangaroo court." He said Councilman Hal Bernson, the board chairman, "blatantly mishandled" a hearing at which the bailout plan was considered. He said he believes that city officials encouraged center employees to strike for one day last May.
"We knew the lawsuits were coming," Hadaway said. "We don't think we did anything wrong. We worked very closely with the city attorney's office to make sure we did things right."
Garcia now runs a Beverly Hills financial consultation and investment firm.