Shifting Terrain

Frank Stronach can be excused if he’s going through non-buyer’s remorse.

Stronach, the head of Magna Entertainment Corp., the racetrack conglomerate that includes Santa Anita and Golden Gate Fields, could have bought Hollywood Park several years ago for $110 million.

After that, instead of paying $24 million for a four-year lease to run races at Bay Meadows, Stronach could have bought the San Mateo track for $50 million.

Woulda, coulda, shoulda -- the racetracker’s lament. For $160 million, Stronach would have theoretically controlled every thoroughbred track in California except Del Mar, if the California Horse Racing Board had let him -- a big if indeed.

Instead, Churchill Downs Inc. bought Hollywood Park for $140 million, and five years later, on July 6, sold the track to the Bay Meadows Land Co. for $260 million. Meantime, Bay Meadows, having disposed of Stronach as a tenant, is running race meets after redeveloping non-racing land in an $80-million mixed-use deal. The remaining acreage at Bay Meadows, should the owner choose to get out of the racing business, is said to be worth more than what it cost the land company to buy Hollywood Park.

“I don’t know anything about the history, I haven’t been with the company that long,” said Ron Charles, who is interim president of Santa Anita and executive director of Magna’s racing interests in California. Those interests include Santa Anita, Golden Gate in Albany and a Stronach racetrack project that has never been anything but a blueprint in Dixon, northeast of San Francisco.

Charles was an interested observer as the sale of Hollywood Park played out. For a tight-lipped company like Churchill, the unloading of the track was the worst-kept secret in town.

“I haven’t seen the terms of the final agreement,” Charles said, “but whatever it is, at the end of the day I hope racing is the beneficiary.”

Had Bay Meadows bought Hollywood for immediate commercial redevelopment, Santa Anita would have been ready to step in and apply for the vacant racing days. Santa Anita still might get its chance; Bay Meadows has promised no more than three years of racing, and skeptics wonder if Hollywood Park’s survival window will be even smaller.

“We would have been very interested in adding racing dates,” Charles said.

That might have led to a dates battle with Los Alamitos Race Course, where Mike Pegram and his partner, Bob Lewis, were prepared to convert the quarter horse track into a thoroughbred facility as well.

The sale of Hollywood Park to Bay Meadows introduced a new player in this ongoing game of racetrack buy and sell. One of the underbidders for Hollywood was The Dynasty Group, headed by Ron Volkman, a Bay Area resident.

“There were closed bids,” Volkman said, “but our offer was right up there with the one that was accepted. We’re not bitter. Our hat’s off to Bay Meadows. They’ll do a sterling job, but we’re not going to go away.”

Volkman, one of the owners of Wild Again, winner of the first Breeders’ Cup Classic, is a real estate executive, an inveterate bettor and a former Magna director. Ex-Magna officials -- and there’s a carload of them around -- keep showing up with new agendas. Jack Liebau, once hired by Stronach to run Santa Anita, is now calling the shots at Hollywood as the president of Bay Meadows.

Volkman wouldn’t identify the other investors in Dynasty.

“Some of them are not necessarily in the racing business,” he said.

Volkman believes that Bay Meadows has the right plan, combining racing with commercial development of adjacent land. Stronach had the same grandiose plan for Santa Anita when he bought the track in 1998, but nothing’s happened and now Magna is no longer the free-spending company it once was.

“You keep hearing that the sport’s going downhill, but I don’t agree,” Volkman said. “There are ways. It will take a combination of alternative real estate use, additional gaming and reviving fan interest by making it easier for people to bet.”

Part of the Dynasty team is Todd Stinson, a horse owner in Lincoln, Neb., who started a company called E-C Logix in 2001. E-C Logix develops financial software and has introduced E-Cash, an alternative to credit cards.

Stinson said he has applied for patents for a betting system that would enable a Dynasty track to operate phone and Internet betting systems without sharing commissions with the ubiquitous middleman.

“We’re still interested in finding a track, and if we get one, we think we can turn things around,” Volkman said. “We’ve got some high-tech ideas and marketing themes that will work.”