The Horseshoe Club, one of Gardena’s three poker clubs, is being sold to a partnership headed by the former president of the Commerce Casino, who said he plans to close the club temporarily for extensive remodeling.
Herbert Stern, former president of a group of investor-owners at the Commerce Casino, is a general partner of the newly formed limited partnership that has made an agreement to purchase the 42-year-old club. Escrow on the property is scheduled to close in mid-April, Stern said.
Stern said the new owners will spend $4 million on the purchase, which includes the building and three-acre site at Vermont and Rosecrans avenues. It will invest another $4 million to modernize the club, which he described as “well-worn.”
Although the group is looking for additional investors, Stern said the partnership has sufficient financing to complete the purchase and needs only city and state approval of its applications for gaming licenses.
Mike Broderick, manager of the gaming registration program in the attorney general’s office in Sacramento, said Stern and a partner, Leonard Baum, have already received conditional approval for a state license to operate the Horseshoe Club.
Conditional approval is given when applicants have submitted a complete application and passed a cursory background check, Broderick said. Applicants must also pass a more thorough investigation, including employment and financial background checks and Federal Bureau of Investigation checks, Broderick said.
Before a state license is issued, the prospective owners must receive a permit from city officials, Broderick said.
City Manager Kenneth Landau said Gardena is conducting a separate investigation of the partnership’s application for a gambling permit from the city.
If the deal goes through, the Horseshoe will be closed for about three weeks in April during expansion and renovation, including the removal of walls and redecoration of the main gaming room as well as the club’s coffee shop and dining room, Stern said. Other decorating changes will be done while the club is open, including new carpeting, ceilings, chairs and gaming tables, he said. All of the work should be completed by August, he said.
After the renovations, the buyers plan to expand the club’s 250-employee work force, Stern said.
“We want to give it a face lift,” Stern said. The changes “will make it more comfortable for the players, and consequently we hope we can attract more business.”
With monthly revenues averaging about $400,000, the Horseshoe Club is the least profitable of the city’s three clubs, which together earn about $2.3 million a month, city records indicate.
The Normandie Club is the most profitable, followed by the Eldorado Club.
The three clubs provided $3.7 in revenue to the city from taxes and licensing fees in fiscal year 1987-88.
The Horseshoe Club was established in 1947 and has been owned since 1951 by a limited partnership of about 100 investors, said club spokesman Milt Corwin, general partner of the selling partnership.
Corwin would not disclose details of the group’s original investment or return. He said the group was “interested in selling, because the active partners are up in years and wanted to step down.”