A Sacramento harness racing group appears to have beaten an Orange County-based racing group by a nose in efforts to purchase Los Alamitos Race Course, sources close to the negotiations told The Times.
The buyers will pay close to $75.5 million for the 300-acre Cypress property that Hollywood Park purchased five years ago for $58 million, the sources said. Hollywood Park's parent company obtained a $100-million loan when it made the purchase in 1984, and will reportedly use the money from the sale of the track to service this debt.
The Sacramento group is headed by Lloyd Arnold, general manager and president of a harness racing organization that runs at Cal Expo, the capital's fairgrounds and race track.
The competing group was led by Dr. Edward Allred, owner of family planning and abortion clinics in Orange County and elsewhere in the state; R.D. Hubbard, owner of race tracks in New Mexico and Kansas City, Kan., and Pacific Telesis. Allred is also president of the Horsemen's Quarter Horse Racing Assn., which runs at Los Alamitos.
The Arnold group plans to split the year evenly between harness racing and quarter horse racing, sources said.
The deal has not been signed and some issues remain to be resolved, according to the sources. The groups will continue to talk over the next few days.
"The track has not been sold--that's all I can say," said Bob Forgnone, the attorney representing Hollywood Park. "I can't comment on anything else."
Allred said he and Hubbard--who owns Ruidoso Downs in New Mexico and the Woodlands, a combination horse and dog racing track that is scheduled to open next week in Kansas City, Kan.--had offered $31 million for the track facility. He said PacTel had agreed to buy the accompanying land, bringing the total offer to $76 million.
This wasn't the first time Allred and Hubbard had attempted to buy the track. Last year they joined SDC Corp. of Newport Beach to sign a deal for the track worth $95 million. The arrangement was later canceled when the track failed to persuade Cypress residents to approve a rezoning proposal that would eliminate an adjoining golf course for commercial development.
The real value of the track lies in the undeveloped property, about 60 acres. But both Arnold's and Allred's most recent offers include plans to keep the golf course.
"I'm feeling pretty bleak about things now," Allred said Wednesday night. "I'm not feeling very encouraged."
But he added: "They may be able to make an announcement, but that's still a lot different than actually closing on the place. And, it's not impossible that something might happen to change all this."
Allred's group still holds an option on the facility and has placed a lis pendens on the property, meaning that the courts will at some point have to approve any transaction dealing with the land.
Allred, while admitting he hasn't formulated a secondary plan, does see a lot of litigation before the matter is settled.
Marje Everett, chairman and chief operating officer at Hollywood Park, declined comment, citing fear of doing anything that would be in violation of Securities and Exchange Commission regulations. Hollywood Park is a publicly held company.
Arnold, whose partners include Sacramento attorney Chris Bartus and Buzz Oates, a warehouse developer, could not be reached for comment Wednesday.
New Grandstand Planned
Arnold, however, told The Times on Monday that if he gets the track, he plans to raze the grandstand and build a new one. That is estimated to cost more than $15 million.
Allred said his group would have put $6 million to $8 million into improvements, but that the track would mainly be used for quarter horses.
The sale of Los Alamitos has been viewed as a quick fix for Hollywood Park's parent company, Hollywood Park Realty, which is servicing a $100-million debt. Most of the money was borrowed for the purchase of the Los Alamitos track property.