It’s a picture-perfect morning at the Los Angeles Equestrian Center. A rider and her horse bound over red, white and blue fences at a jumping competition in a 3,500-seat arena. An urban cowgirl primps her mount for a jaunt on the trails of Griffith Park. Horse heads protrude from stalls in huge barns, just watching the humans go by.

But inside the offices of Los Angeles Equestrian Center Inc., a company official grouses about the financial future of the Los Angeles area’s premier equestrian facility, a complex frequented by business owners and well-heeled professionals, among others.

The city of Los Angeles, he says, has been strangling the company’s revenue stream for the past two years by severely limiting the number of non-equestrian events, such as bicycle races and dog shows, that can be held at the center. The city, which owns the 75-acre property on Griffith Park’s eastern flank, abutting Burbank, contracts with LAEC Inc. to run it in return for a share of the revenues.

“They’ve thrown out the baby with the bath water,” complained LAEC spokesman George Chatigny, referring to the city restrictions. “It’s a shame because the center and the city are losing a lot of money.”

The city restrictions are a major reason revenues have been slumping the past couple of years, Chatigny said. The center generated $3.9 million in gross revenues last year, off from the $5.8 million in 1994, according to the firm’s financial reports.

But city officials bristle at the suggestion that they are treating their tenant shabbily. They, too, want a successful equestrian center that channels much-needed dollars to city coffers, they said. But the city also must ensure compliance with environmental laws and protect surrounding neighborhoods from excessive traffic, noise and other impacts.

The controversy over using the equestrian center for non-equestrian events dates back to the early ’90s, when LAEC began seeking ways to offset a drop-off in business related to the recession.

There were dog and antique shows, a BMX bicycle championship and a Christian music festival, among other events. The activity peaked in the summer of 1994, bringing neighborhood tempers to a boil, generating a stream of complaints and, later, a lawsuit contending the non-equestrian events were a nuisance.

“The Christian music concert, that was the straw that broke the camel’s back,” said Linda Barth, a senior management analyst for the L.A. Department of Recreation and Parks.

Following that event, the city’s lawyers advised that environmental studies were required under the California Environmental Quality Act to assess the impact of the non-equestrian events, Barth said. The board did grant one exemption, to the San Fernando Valley Fair, the center’s premier non-equestrian event.

As far as LAEC is concerned, it’s the victim of a bum deal. Chatigny argues that because the city allowed non-equestrian events in the early ’90s without requiring an environmental study, it is unfair for it to require such a study now especially because LAEC is only about five years into a 30-year contract. LAEC recently had to turn away a medieval-themed fair and other events that would have generated more than $100,000 in revenues, he said.

City officials say they had to change their treatment of non-equestrian events once their attorneys notified them it was essential to comply with state law. The original 1979 environmental impact report studied the site for mostly low-impact equestrian events, and broadening its use would require a new environmental study. “It’s a cut-and-dried legal matter as far as the board is concerned,” Barth said, adding that such a study would cost about $25,000.

LAEC argues that the city should pick up the tab, and it has hired a lawyer to try to work out its differences with L.A. No agreement has been reached so far.

“The Equestrian Center does benefit the citizenry … but they can’t expect us to treat them differently than we treat other businesses in the city,” said L. A. Recreation and Parks Commissioner Lisa Specht, who oversees the Equestrian Center for the Commission. “They have to pay for their own traffic study.”

Reaching an accord becomes even more important next year, the sixth year of the contract, when the rent on the facility increases. In addition, officials of the San Fernando Valley Fair are considering moving their event elsewhere, possibly to Santa Clarita.

Back in the barns, horse owners voiced mostly negative feelings about non-equestrian events. On one hand, such events would allow LAEC to generate more revenue for upkeep. Then again, it could prove a nuisance, like the bicycle competition. Memories of adolescents on bikes racing down horse lanes die hard among the dressage and polo crowd.

“I think (using the center for non-equestrian events) is wrong,” said Sheri Lin, a West Hollywood psychotherapist, who keeps her thoroughbred, Dante, at the center. “This is an equestrian center and it should be used for equestrian activities.”