Hollywood Park to Back Compton Casino : Gaming: The racetrack firm will contribute up to $10 million, showing its expansion plans are not dead despite a setback with Bicycle Club deal.
A controversial Compton card club that was approved for construction but has not been built for lack of funds received a boost this week when backers announced a new deal with Inglewood’s Hollywood Park.
Hollywood Park will provide up to $10 million for construction of Compton’s Pyramid Club, both parties said. Compton Entertainment, the corporation applying for the state club license, hopes the cash will attract $20 million in additional financing needed so construction can begin in December.
The deal also shows that Hollywood Park’s expansion plans are not yet dead even though its bid to buy into the Bicycle Club card casino in Bell Gardens was recently denied.
“We have certainly expressed an interest in partnership,” said Michael Finnigan, chief financial officer of Hollywood Park and president of its gaming and entertainment division. “We see this as a good long-term investment.”
What is keeping Hollywood Park from becoming a full partner with Compton Entertainment is the same law that blocked it from buying into the Bicycle Club. State law says no publicly traded company, such as Hollywood Park, can operate a card club in California. The $25-million card casino that opened last month at Hollywood Park is leased to another company, which runs the gaming operation.
That law could be changed if legislation to create a state gaming commission and allow public companies to own casinos is resurrected in Sacramento. A measure that would have accomplished that died last week in the final hours of the legislative session.
Because Hollywood Park cannot yet claim partnership in the planned Compton casino, the company is putting $10 million into construction of the Pyramid Club building, which will be leased to Compton Entertainment. This is similar to its relationship with Pacific Casino Management, operator of the club at Hollywood Park.
Hollywood Park will provide an additional $5 million to help defray startup costs, Finnigan said.
The deal may seem as though Hollywood Park is helping create stiff competition for the card club at the track because the Pyramid Club in Compton would be easily accessible from the Redondo Beach Freeway and Hollywood Park’s club is more difficult to reach. But the participants said they are not concerned.
“They understand there is a greater market out there than is currently being tapped,” said Jerold B. Neuman, attorney for Compton Entertainment and architect of the Hollywood Park deal. “Besides, if you’re going to have competition, you might as well be involved in all of it.”
What remains to be seen is whether Compton City Council members, who fought bitterly over the Pyramid Club before narrowly approving it, will accept the involvement of Hollywood Park.
Compton Entertainment President Rouben Kandilian will probably seek the council’s permission to add Hollywood Park’s name to the development agreement sometime this month, Neuman said.
After that, there are several other bureaucratic hurdles, such as state licensing, that the Pyramid Club must navigate. A license is not granted until all investors pass state background checks. So far, Kandilian is the only investor.
And although the club was given a city license in December, 1992, strong anti-casino feelings remain in the community and on the City Council.
“This adds a new twist to the whole project,” said Councilman Ronald J. Green. “I’m waiting for our staff to bring back a full report.”
Green, who was not on the council when the casino vote was cast, is considered a possible Pyramid Club ally because of his political alliance with Mayor Omar Bradley, the proposal’s chief supporter.