Equestrian Center Bail-Out Proposed : Agreement Lowers Rent, Envisions Hotel to End Financial Skid

Officials of the Los Angeles Equestrian Center and its main creditor have agreed on a plan that they said Monday would put the center on a sound financial footing for the first time.

The plan calls for lower rent payments to the city and the construction of a hotel for horsemen. Both need approval of the Los Angeles City Council.

The 4-year-old center in Griffith Park is a playground for polo players, horse-jumpers and owners of show horses. It is owned by Equestrian Centers of America, a company headed by J. Albert Garcia. Its chief creditor is Gibraltar Savings of Beverly Hills.

Despite the wealth of many of its users, the center has never made a profit. Put simply, its officials say, it cannot be supported solely by equestrian events and doesn’t have a wide enough variety of shops and restaurants.

The center has been losing $100,000 a month and has lost more than $7.5 million since it opened. It still is only partly built. Center officials in 1984 filed for relief under Chapter 11 of the federal Bankruptcy Code to block Gibraltar Savings’ attempt to foreclose on a $10-million loan.

The Los Angeles consulting firm of Pannell, Kerr & Forster, which, as a consultant to one of the center’s creditors, wrote the bail-out plan, recommended that the city reduce its rent of $2,500 a month or 5% of gross receipts, whichever is greater.

Reduction Urged

The rent reduction has already been requested by the center and recommended to the City Council by the Recreation and Parks Commission. The plan proposes payments for equestrian revenue of 3.5% of gross receipts; retail revenue, 2.5%; and food revenue, 2%. Five years of lower rent would “allow us to get back on our feet,” Garcia said.

By September, 1984, when the Equestrian Center applied for Chapter 11 protection, it had withheld at least $850,000 in payments to Gibraltar, seven months’ worth, because of a disagreement over the terms of the loan, Garcia said.

The center filed a lawsuit in October, 1984, against Gibraltar, claiming it had withheld $2 million of its loan in an effort to take the center away from Equestrian Centers of America. Gibraltar counter-sued, demanding its money.

With the city’s cooperation, both sides said Monday, their dispute will be over.

Garcia said he will present the city next week with plans to upgrade and expand the center. The plans include a 300-room lodge with conference rooms, a swimming pool and tennis courts for center members and visiting riders.

“This is not intended as a commercial venture,” Garcia said. “There are already a whole lot of lodges in Griffith Park. This would just be for horse people, and it would be completely intergrated into our present facility.”

Garcia also wants to put a new restaurant and more stores on the premises, plus 250 to 300 horse stalls in the northeast corner of the center. He said the agreement also called for Gibraltar to advance funds to complete the southwest corner of the center by adding lighting, parking and drainage.

He also wants the city to extend the Ventura Freeway off-ramps to Forest Lawn Drive so motorists would have direct access to the center. The only freeway access to the center now is off Riverside Drive in Burbank.

“The people of Burbank have always said they feel harassed by our center, and so we should separate entirely from Burbank because they have harassed me,” Garcia said. “This would take us away from the people who want to shut us down.”

People who live next to the center have criticized the noise and traffic they say it generates. The dispute between Burbank residents and center officials was heightened last summer when Garcia staged a series of music and rock concerts in the center’s Equidome.