The Canadian owner of Santa Anita Park may put the famous horse-racing venue in Arcadia up for sale as it struggles to be profitable in the troubled racing industry.
Magna Entertainment Corp., which has owned Santa Anita for almost a decade, announced Thursday that it planned to sell several assets and perhaps issue new stock in the hope of eliminating as much as $700 million worth of debt.
The Aurora, Ontario-based company said it would sell real estate in Maryland, Florida, Ohio and Oregon. It said it would "explore" selling Santa Anita and its stake in the Gulfstream Park racetrack in Florida.
"I am determined that our debt elimination plan will be successfully and fully implemented on a timely basis," Frank Stronach, Magna Entertainment's chairman and founder, said in a statement.
Developer Rick Caruso, who is planning a $500-million shopping center and office complex on land adjoining the racetrack complex, says a sale probably will have little effect on his project.
The Shops at Santa Anita development had been planned as a joint venture between Caruso and Magna, with Magna providing the land. With the potential sale of Santa Anita, Caruso says, his Los Angeles company may now move to buy the development site.
"At the end of the day, I think we may end up owning that," he said.
Caruso hopes to complete the 820,000-square-foot center, which would be connected to the track and would be similar to the Grove in the Fairfax district of Los Angeles, by 2010. The project, however, has been challenged in court by rival shopping center company Westfield Group.
Real estate broker Jay Dick of CB Richard Ellis said Santa Anita was "phenomenal real estate in the heart of Southern California."
But if the racetrack were sold, the new owner would be expected to maintain the historic facility as a horse-racing track, said Don Penman, Arcadia's assistant city manager.
"The racetrack is considered not just a jewel for Arcadia, but for all of horse racing," Penman said. "Whoever the owner is, it will remain a horse track."
Of course, horse racing is not nearly the draw it was in the days before TV, lotteries and Indian casinos siphoned off visitors who enjoyed spending a leisurely afternoon wagering on thoroughbreds. The rise of other pro sports and Internet gambling have also drained attendance.
But Penman said if racing could not be sustained at Santa Anita, "horse racing in Southern California is probably not going to survive."
Magna paid $126 million for Santa Anita in 1998 and invested millions more in restoring and improving the complex, built in 1933. It is one of the best-known tracks in the world, where such champions as Seabiscuit, Affirmed and Spectacular Bid have churned the dirt.
Property prices in downtown Arcadia have quadrupled since Magna bought Santa Anita, Penman said, though it would be hard to predict what the facility would bring on the open market.
The historic track is restricted to horse-racing uses only, and Caruso has tied up the bulk of the outlying acreage entitled for development.
Penman predicted that Westfield's legal challenge to Caruso's project, which claimed the environmental review was flawed, would be resolved by the end of next winter and that work on the project would begin soon thereafter.
Magna reported a loss of $23 million on sales of $203 million in the second quarter ended June 30, and its shares are down more than 50% this year. The stock rose 37 cents to $2.23 on Thursday.