The new owners of Los Alamitos Race Course, to the astonishment of many, find themselves in a rather unusual position--on the brink of profitability.
The track, in recent years considered a white elephant, was sold to Hollywood Park in 1984 for $58 million. But it wasn't long before it was so deep in red ink that the survival of the parent Inglewood track was threatened.
Lloyd Arnold and Chris Bardis, who represented harness racing interests, won a bitter struggle to buy the track and adjoining property for $72 million last November. Some viewed the purchase as foolhardy.
But a funny thing happened on their way to bankruptcy.
Many bettors who had stopped coming to Los Alamitos returned. Attendance and handle at the harness meeting increased 25%. Arnold, in a spirited salvo directed at the former owners, even draped an "Under New Management" sign across the back of the grandstand.
After four months, Arnold and Bardis sold half of the track, which consisted of 125 of the 297 acres they had bought, for $16.5 million to the quarter horse interests who had opposed them in the original purchase. Ed Allred's Quarter Racing, Inc., made the purchase, and R.D. Hubbard took an option for a quarter of the track from Quarter Racing, Inc. Allred and Hubbard had made a series of legal maneuvers a few years ago that made the track very difficult to operate under any ownership.
So, Arnold and Bardis were suddenly partners with men they been feuding with for more than a decade.
Then, Arnold and Bardis sold the golf course property next to Los Alamitos to Dye Design, a Colorado golf development corporation, for $34 million. Dye plans to build an upscale golf resort on the site. Hollywood Park had shut down the golf course, claiming it had little value.
Arnold and Bardis are in negotiation to sell two parcels of land to undisclosed buyers for $6 million and $8 million. All of which still leaves Arnold and Bardis with 44 acres, 33 of which can be developed for offices and businesses. Independent realtors estimate the value at about $1 million an acre.
So did Lloyd Arnold, an unassuming track manager with country charm, and Chris Bardis, a Sacramento lawyer, merely get lucky or were they men of great vision?
A little of each, it turns out.
Arnold, Allred and Bardis, in separate interviews, each claimed little credit for the track's recent success. Instead, they chose to allege that Hollywood Park officials mismanaged the track.
"We've cleaned up the track because it was filthy," Arnold said. "We're treating people like we want them to come. It's just common sense that you have to treat people right. You have to feed them good food at a reasonable price, and you also have to have a clean facility."
Bardis pointed more directly at Marje Everett, the chief operating officer at Hollywood Park.
"They just botched it up so bad, it was an easy act to follow," Bardis said. "Everything you could conceivably do wrong, they did. Where (Everett) did nothing to enhance racing, we did a lot. Where she was closing down golf courses, we were putting them up."
That theme is somewhat explained and partially colored by the recent announcement by Hubbard that he plans to stage a proxy fight to take over control of Hollywood Park. Hubbard would even choose not to exercise his option to buy a quarter of Los Alamitos if the California Horse Racing Board sees his ownership in both properties as a conflict.
Hubbard was in the Soviet Union, where his art collection was on exhibit and could not be reached.
Don Robbins, executive vice president of Hollywood Park, reached in Northern California Thursday, said, "It is unfortunate that they (Los Alamitos owners) have decided, for whatever reasons, to engage in personal attacks.
"We are delighted that they are doing well. But they aren't doing quite as well as their public relations releases would have you believe. They just recently completed a summer quarter horse meeting in which the on-track handle was down 10% from what it was at the same time the previous year that we had it.
"Obviously, they have benefited from a change in legislation that allows them to send their racing program signal state wide (to off-track betting facilities); we were confined to Southern California. Also, they are running 12- and 13-race programs, where we used to run nine and 10."
Los Alamitos, like most race tracks, is more valuable as real estate than as a gambling facility. The selling of property has been a key to making the deal work. When all of the non-race track property is sold, Arnold and Bardis will have, basically, acquired the race track for nothing and still a profit of about $25 million.
"They did a nice deal; they are smart," said Jeff Rhodes, who was commissioned by Hollywood Park to sell the property to Arnold and Bardis. "They were in control and they are going to make a lot of money eventually. But with all the legal problems the track had, it was still a courageous deal."