Rounding Bend

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The bankrupt owners of Santa Anita Park want to put the iconic Arcadia race track on the auction block as early as this summer, and they have hired a New York investment firm to oversee the sale.

Though the details and timing are still being worked out, Ron Charles, Santa Anita chief executive, said information regarding the auction could be sent to potential bidders within a few weeks.

“There have definitely been some calls from interested parties,” said Charles, who declined to be more specific except to add that some interest has come from potential buyers in Asia. “I’m hearing lots of things.”

A spokesman for the New York investment firm, Miller Buckfire & Co. LLC, declined to discuss the matter on the record.

Among prominent potential bidders being mentioned is Los Angeles developer Rick Caruso, whose company, Caruso Affiliated Holdings LLC, is planning a $500 million shopping mall on the track’s vast parking lot, and the Thoroughbred Owners of California, an association of horse owners based at Santa Anita.

The legendary track’s future has been in question ever since its parent company Magna Entertainment Corp. based in Ontario, Canada, and owned by businessman and horse enthusiast Frank Stronach announced March 5 that it was reorganizing under U.S. and Canadian bankruptcy laws after defaulting on a loan. Magna, which owns six other major thoroughbred race tracks, said it plans to continue operations while seeking buyers for its assets.

Santa Anita, opened in 1934 and the oldest and most preeminent horse-racing track in California, was purchased by Magna in 1998 for $126 million.

In an initial request filed in U.S. Bankruptcy Court in Delaware, the company suggested a July 8 deadline for bids on all its properties, including Santa Anita, followed by an auction in New York on July 30 and certification of the winners Aug.7.

The request has elicited numerous objections, mostly from creditors concerned that their interests be protected. Some have also questioned the wording of Magna’s motion to authorize the action, arguing that it gives the company too much leeway in dealing with bidders.

A hearing on the matter scheduled for late last week was postponed until at least April 17.


Potential buyers

Caruso recently reaffirmed that he is seriously considering a bid.

“My interest is to preserve the project we have,” he said, referring to his proposed Shops at Santa Anita development, which would span 820,000 square feet, and include shops, restaurants and a multiscreen theater.

The project has been on hold since the Westfield Group, which owns a shopping mall next to the track, won a recent court order forcing the developer to revise his project’s environmental impact report.

“We’re looking, if it makes sense, to buy the whole track and participate in the auction,” Caruso said last week. “We’re still in due diligence, trying to understand the financial model and whether it makes sense for us to buy it.”

The chair of the Thoroughbred Owners of California expressed similar sentiments. “We’re in the exploratory stages,” said Marsha Naify, “and haven’t really decided” whether to bid.

Churchill Downs Inc., the Louisville, Ky., owner of several tracks including the famous site that hosts the Kentucky Derby, is also seen as a potential buyer given its industry status.

Arcadia City Manager Don Penman said he had received no inquiries regarding the track’s future, but the city’s main goal is to assure that whoever buys the facility continues using it for horse racing.

Despite the fact that the sport has been losing business in recent years to Las Vegas, American Indian casinos and even local card clubs, Santa Anita, according to Magna’s bankruptcy filing, still has “one of the highest daily attendance figures for all North American race tracks” about 8,900 per live racing day in 2008. The track also has one of the highest total handles the amount waged both on and off the track at various gambling venues with about $1.1 billion last year.

Even so, experts said, selling it may be a tall order.

“It certainly will take the right kind of buyer, especially in this market and economy,” said Byron Malso, a Beverly Hills attorney specializing in bankruptcy and insolvency. “Horse racing is a difficult business right now; I would think selling Santa Anita will be a challenge.”