L.A. Rent Decision Irks Horse Center’s Operator

The Los Angeles Board of Recreation and Park Commissioners’ failure to lower the rent on the financially troubled Los Angeles Equestrian Center in Griffith Park could make it more difficult to sell the center’s lease, operators say.

But a park commissioner said Wednesday that lowering the rent would only benefit the center’s operator, Gibraltar Savings of Beverly Hills, and not the city.

“Any modification of the existing contract would be a gift, in my mind, of public assets. And that is morally wrong,” said Commissioner Dominick Rubalcava, who voted against the proposal.

Rubalcava agreed that lowering the rent would make the center more attractive to a buyer. But he said only Gibraltar would profit from such an arrangement. “The little guy has to take his lumps . . . and the big guy has to take his lumps,” Rubalcava said.

The board deadlocked 2 to 2 Monday on Gibraltar’s request to reduce the center’s rent for five years. The proposal would have extended the center’s 20-year lease with the city to 50 years.

Concessions Needed

Dick Post, Gibraltar senior vice president, said the concessions are needed to attract buyers for the 73-acre complex. “Any buyer is going to need the things we requested” because “anybody buying the center is going to have to put money into it” to make it profitable, Post said.

The equestrian center has been run by Gibraltar, the center’s largest creditor, since April, 1988, when Gibraltar foreclosed on J. Albert Garcia, the facility’s previous operator. Since the takeover, the savings and loan has lost between $80,000 to $100,000 a month in operating costs, Post said.

The new contract provisions would have lowered the center’s rent for five years, beginning at $50,004 in the first year and increasing to $125,004 in the fifth year. At the end of the fifth year, the rent would have been equal to 5.5% of the center’s gross receipts, which were $6.6 million in 1987-88, according to city records. Gibraltar pays about $250,000 a year in rent, Post said.

“We were extremely surprised and disappointed” at the board’s vote, Post said, noting that the commissioners had tentatively approved the rent proposal in April.

“We had come this far thinking we were going to get approval,” Post said. “We were caught off guard.”

Post said he had not yet discussed the board’s vote with Gene Harmon, a semi-retired Burbank banker who has expressed interest in buying the center’s lease.

Seeking Cooperation

Harmon could not be reached for comment Wednesday.

“We may talk to the city staff or the city attorney to see if we can present this to the commission again or see under what basis it can be reconsidered,” Post said. “We’re still willing to work with the commission, but we really don’t know if they are willing to work with us.”

Park Commissioner Richard J. Riordan, who voted for the rent reduction, said Gibraltar should work on a new proposal for the board to consider.