Board to Study Rent Cuts for Equestrian Center

The Los Angeles Board of Recreation and Parks Commissioners agreed Monday to consider a proposal by the owner of the financially troubled Los Angeles Equestrian Center to reduce its rent on the center from $30,000 a month to a flat fee of $50,000 for 1990.

The board agreed at its regular meeting Monday to consider the proposal after hearing from Dean W. Harrison, general counsel for Gibraltar Savings, which operates the equestrian center, located on 70 acres of city property in Griffith Park.

Harrison told the panel that additional cutbacks in services at the center would be necessary if Gibraltar does not get rent relief.

Last month, Gibraltar laid off 40 employees when it closed the center’s polo school and scaled back operations at its restaurant indefinitely. Harrison declined to say Monday what other services might be cut.

Harrison also told the commissioners that Gibraltar, which was seized by federal regulators in March in the wake of heavy financial losses stemming in part from its commercial real estate troubles, has been informed by the federal government that Gibraltar cannot continue putting money into the center.

The equestrian center has been run by Gibraltar, the center’s largest creditor, since April, 1988, when the savings and loan foreclosed on J. Albert Garcia, the facility’s previous operator. Since the takeover, the savings and loan has lost more than $1 million in operating costs, Harrison said.

The board ordered its staff to prepare a report on the rent reduction proposal, which the five-member panel will vote on at its next meeting, Jan. 22. If approved, the rent change would be retroactive to Jan. 1. It would be good for one year or until a buyer for the center is found, at which time the city’s lease agreement would be renegotiated, said Sheldon Jensen, assistant manager of the Recreation Department’s Griffith Park region.

Commissioner Dominick Rubalcava was the only board member to speak out Monday against lowering the rent. “I don’t believe in corporate welfare,” Rubalcava said, adding that Gibraltar has an obligation to live up to the contract it inherited until a buyer is found.

The savings and loan has been trying for nearly a year to sell the equestrian center to a group of businessmen headed by Gene Harmon, a retired Burbank banker.

Harmon on Monday would not disclose the details of his offer to buy the center, but said his group would meet with city officials within the next two weeks to discuss a purchase. Harmon said that purchase offer “is in no way connected” to a rent reduction.

If the board approves the most recent proposal, it would go before the City Council for final approval, which could take two to three months, Jensen said.