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Cypress Casino Promoters Have $600,000 Debt

June 05, 1993|LYNDA NATALI and ERIC LICHTBLAU | TIMES STAFF WRITERS

CYPRESS — The promoters of this city's controversial card club proposal, who have spent a half-million dollars trying to sell voters on the idea of legalized gambling, have amassed more than $600,000 in overdue debts and delinquent taxes in recent months, records and interviews show.

In the biggest single chunk of the debt, a development company partly owned by card-club promoters Lloyd Arnold and Chris Bardis owe the county $260,000 in delinquent property taxes on land surrounding their Los Alamitos Race Course in Cypress, county officials said.

The prospective card club owners also owe money to a Southland church and to two horse racing industry groups, with overdue loans or payments and delinquent taxes now totaling $611,948, officials said.

Bardis, a Sacramento developer who owns a major interest in the Los Alamitos track, acknowledged in an interview Friday that he and his business partners have some overdue debts.

For the Record
Los Angeles Times Sunday June 6, 1993 Orange County Edition Part A Page 3 Column 6 Metro Desk 1 inches; 33 words Type of Material: Correction
Card Club Opponents--A Times story Saturday misstated the amount of money spent by opponents of a card club gambling measure in Stanton. The opponents have spent $2,385--sharply less than the $60,000 spent by backers of the measure.

But he said Los Alamitos recently hired a new controller who is "unraveling the problems" the race course has encountered keeping its bills current, and that the temporary delinquencies did not reflect on the ability of the card club promoters to finance the proposed $30-million gambling establishment that voters in Cypress are being asked to approve Tuesday.

Stanton residents will also vote Tuesday on a similar plan to allow card gambling in their city.

If either initiative is approved, it would mark the return of gambling to Orange County after an absence of a dozen years.

"I can tell you my credit rating is triple A, and to suggest, even to indicate that we are in a position that we can't pay our bills is ludicrous," Bardis said.

"I could write a check out tomorrow to pay (those debts). . . . You are talking about liabilities that are minuscule to the entire operation," he said.

But opponents of the pro-gambling measure on Tuesday's ballot say disclosures of the past-due debts and taxes raise questions about the promoters' financial reliability, and about their ability to make good on economic commitments to the cash-strapped city.

During their campaign for passage of the card-club measure, race track officials have offered voters a potpourri of economic lures: 2,500 new jobs for the battered local economy, more than $10 million a year in new revenue for depleted city coffers, and the establishment of a $1-million student scholarship fund. The promoters promise all this and more if Cypress voters approve Measure A.

"If in fact (the tax and loan payments) are past due," said Mary Ann Jones, a spokeswoman for one group that is opposing the card-club initiative, "then that certainly concerns me, because all these promises (Arnold) has made to pay the city all this money are then in jeopardy. If he can't meet his own financial debts, how can he then meet his debts to the city?"

But Cypress Mayor Gail H. Kerry said she was unconcerned by the debts, and remained confident that the city is not taking an undue financial risk in considering approval of the card club.

"Obviously, they feel they can get the money, and look how much money they have spent on this campaign," she said, referring to the $500,000 the club's promoters have thus far reported spending to woo voters to their side. "They must have money or they couldn't do that."

But financial records show that companies owned by Arnold and Bardis have amassed at least four recent debts, ranging from $50,000 to $260,000, that are now past due:

* The county tax collector's office says that Cypress Development, a company owned by Arnold, Bardis and at least two other developers, owes more than $260,000 in delinquent property taxes on undeveloped land surrounding the Los Alamitos Race Course.

In late 1989, a consortium led by Arnold and Bardis bought the Cypress track and surrounding acreage for $71 million from Hollywood Park. Six months later, they sold a 50% interest in the track to Ed Allred, who is now the third partner in the card club proposal. Arnold and Bardis, joined by other investors, formed Cypress Development to oversee the sale and development of several parcels of the surrounding land.

County tax records show Cypress Development has missed two property tax payments since last December on each of four separate parcels surrounding the track, with the overdue bills totaling $259,948.12. That total includes a 10% penalty that the county has assessed against the firm for each missed payment, county officials said.

Bardis said, however, that the county actually owes Cypress Development money, because the company was overcharged several hundred thousand dollars on its past property assessments. The company has been trying to negotiate a settlement with the county but, in the meantime, is refusing to pay its outstanding tax bill until the matter is resolved, he said.

* Cypress Development failed to repay a $222,000 loan that came due in February from First Nazarene Church of Long Beach, Pastor John Calhoun confirmed.

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