Santa Anita Cos. Post Loss of $16 Million for Second Quarter : Big Writedown Blamed on Poor Performance at Minnesota Track

The Santa Anita Cos. of Arcadia posted a second-quarter loss of $16.15 million stemming from an unprofitable investment in a Minnesota race track.

Santa Anita’s performance reflects the combined results of Santa Anita Operating Co. and Santa Anita Realty Enterprises, a profitable real estate investment trust. The operating company conducts thoroughbred horse racing at Santa Anita Park in Arcadia, while the trust owns the race track property and 50% of the Santa Anita Fashion Park shopping center.

The operating and real estate companies have operated separately since 1980, but Santa Anita shares trade on the New York Stock Exchange as a single listing. The second-quarter loss is the first since the operating and real estate companies began operating separately.

The second-quarter loss compares to net income of $1.15 million in the same period a year ago. Revenue totaled $15.93 million, up from $14.41 million.

$14.2-Million Writedown

Santa Anita officials said the loss resulted largely from a $14.2-million writedown taken by Santa Anita Operating for its investment in Canterbury Downs in Shakopee, Minn.

The operating company also set aside a reserve of $2 million in the second quarter to cover possible losses at Canterbury Downs during the 1988 session. Santa Anita officials said the race track’s attendance has been hurt by high state taxes.

Royce B. McKinley, president of Santa Anita Realty Enterprises, said Sunday that the quarterly defict is “a one-time loss” that now is “behind the operating company.”

The company’s racing business in California is “sound and profitable,” he said. Company officials also said that the loss will not affect the dividends paid by Santa Anita Realty.

For the six months ended June 30, Santa Anita reported a loss of $9.63 million, against earnings of $7.9 million a year earlier. Revenue totaled $75.75 million, up from $70.01 million last year.