Hollywood Park on Its Last Legs?

Los Alamitos Race Course could be getting into the thoroughbred racing business, and Hollywood Park could be getting out.

The dramatic change in the sport’s Southern California landscape is still at least two years away, but Los Alamitos, the Cypress track that races quarter horses, announced on Thursday a bold plan to reconstruct its plant for thoroughbreds while rumors continued to indicate that Hollywood Park might be sold and commercially redeveloped.

With no guarantees -- racing licenses belong to the state and are issued by the governor-appointed California Horse Racing Board -- the new Los Alamitos is expected to be ready by 2007, said Ed Allred, who owns the Orange County track. Allred and his new partner, noted thoroughbred owner Mike Pegram, said they were prepared to apply for a license at that time. Allred said that even if Los Alamitos obtained a thoroughbred license, quarter horses would continue to run there.

Officials from Hollywood Park and its parent company, Churchill Downs Inc., have been close-mouthed about whether its 240 acres in Inglewood are being sold, but several industry sources believe that a deal is imminent.

During a teleconference with financial analysts Thursday, Tom Meeker, chief executive of Churchill, said that the company that runs the Kentucky Derby would announce more specific plans regarding Hollywood Park in a few months. Later in the day, Julie Koenig Loignon, a corporate spokeswoman, said, “Something will happen sooner rather than later.”

A site the size of Hollywood Park would be desirable to property developers who specialize in large urban projects, real estate sources said.

“It’s very rare that you can find such a mass of land in an infill location,” said Bobby Turner, managing partner of the Canyon-Johnson Urban Fund, one of the country’s largest investors in inner-city development. “Here you have a clean slate.”

Turner said his company might be interested in partnering with developers such as Vornado Realty Trust or Related Cos. to develop Hollywood Park into a new residential and retail complex. Both are heavyweight New York developers. Related built the 2.8-million-square-foot Time Warner Center that opened last year in New York’s Columbus Circle and is the front-runner to build the planned $1.2-billion Grand Avenue project in downtown Los Angeles.

Los Angeles developer Jerry Snyder, who has more than $1.5 billion worth of retail and residential real estate under construction or in planning stages, said he too might like to get a crack at Hollywood Park.

“I don’t want to get involved in a beauty contest,” he said, “but if they came to me and said, ‘Would you buy it?’ I would. To be able to assemble that much acreage in the middle of a dense population area is pretty damn exciting.”

Drew Cuoto, president of the Thoroughbred Owners of California, believes that Hollywood Park is not only being sold, but Churchill Downs Inc. might be getting out of the racing business in California. Hollywood Park runs 20 weeks of racing a year, most of it during a spring-summer meet that opens April 22.

“What Meeker said during that call was Wall Street-speak for a sale,” Cuoto said. “If Churchill Downs gets no assurances of getting a ‘racino’ in California, I’d say the chances are slim that they’d stick around.”

Racinos are race tracks that also offer casino gambling, such as slot machines. Referendums that might have allowed slots at Hollywood and other California tracks were soundly defeated last year. The card club at Hollywood Park is operated by Pinnacle Entertainment Inc., which signed a 10-year lease when Churchill bought the track for $140 million in 1999.

During Thursday’s call, Meeker referred to Indian casinos when he said: “Without slots [at race tracks], there’s not a level competitive playing field in California.”

Pegram, 53, said that he was making a $40-million investment in joining Allred at Los Alamitos. Pegram, who owns 13 McDonald’s franchises in Arizona, started in racing with quarter horses before switching to thoroughbreds in 1988. He raced Real Quiet, who came within a nose of sweeping the Triple Crown in 1998 after wins in the Kentucky Derby and Preakness.

Los Alamitos plans to expand its dirt track from five furlongs to a mile and will also build a seven-eighths-mile grass course. Allred said that 3,000 new grandstand seats would be added to the existing 9,000 seats and 700 additional barns would be built. Los Alamitos, which sits on 200 acres that Allred said is worth more than $1 million an acre, already has 1,500 barns.

Allred said that Los Alamitos would be capable of racing thoroughbreds in the afternoon and quarter horses at night. There would be a theoretical overlap of 20 weeks a year. Los Alamitos currently races quarter horses year-round on a Thursday-through-Sunday schedule.

“It’s hard for me to believe that Los Alamitos is making this investment with no assurance of racing dates,” said Ron Charles, executive director of Magna Entertainment Inc. in California, where the Canadian-based company owns Santa Anita and Golden Gate Fields. “It’s hard to speculate what might happen. I think it’s unlikely that Churchill would sell the Hollywood Park property and then just walk away from racing in California.”

Charles said that Santa Anita would eventually be interested in racing Hollywood Park’s dates at its Arcadia plant.

“That would be like drilling a dry hole,” said Pegram, who has been discouraged by the state of racing in California, where workers’ compensation costs have skyrocketed for horse owners and tracks are battling steep business declines.

“Everything is happening so fast that it’s scary,” said Alan Landsburg, former chairman of the California Horse Racing Board and recently elected chairman of the Thoroughbred Owners of California. “It’s really too early to see where any of this is taking us. I think we’re looking down a longer road than 2007. What’s going on at Los Alamitos could be a saving grace for the sport, or it might be something that won’t ever happen.”

Marje Everett, who ran Hollywood Park from 1972 until she lost out in a proxy fight in 1991, said that she would not be surprised if the Inglewood plant is shuttered.

“Look at New York -- 2,000, 3,000 people in the stands on weekdays, and Hollywood Park is not any better,” Everett said. “Racing is in a very difficult position everywhere. I miss it, but in a way I was lucky I left when I did, because I don’t think I would be capable of handling the frustrations that track operators have now.”

Like Landsburg, Richard Shapiro, a current member of the racing board, feels that it’s premature to judge the Los Alamitos project.

“I welcome any investment of this sort,” Shapiro said. “It could bring new energy to the sport, and could lead to other investors. But I wonder if a racing surface could absorb all the punishment a track might take running two cards a day.”

Shapiro has been a frequent critic of Hollywood Park, which began racing in 1938 under the aegis of Jack L. Warner of filmdom’s Warner Brothers studio.

“It seems like Churchill has let the place just sit there since they took over,” Shapiro said. “As for the sale of the place, I think the track’s definitely in play, and it’s just a matter of time before a deal is announced. There’s way too much smoke on this one, and the deal is nearly done, from what I hear.”

Shapiro’s grandfather, L.K. Shapiro, raced Native Diver, winner of three Hollywood Gold Cups in the 1960s.

“Native Diver is buried at the track,” Richard Shapiro said. “So there would be a lot of personal sadness if Hollywood Park closed down.”

Drew Cuoto said that the Los Alamitos plan might be the start of a new era in California racing.

“It might give us the opportunity to get very creative with a new racing calendar, one that’s different and better than the traditional one we’ve been locked in to,” Cuoto said. “We need to re-think the calendar, and come up with something that’s appealing to the fans and better for the participants. If we are indeed entering a new era, we’ve leaving one that’s had a lot of bumps and bruises.”

Richard Mandella, a Racing Hall of Fame trainer whose horses are stabled at Santa Anita, is intrigued by the possibilities.

“A presence in Orange County might bring in some fresh fans,” Mandella said. “I like the people who are involved in this. I train for [Allred], and he’s a top horseman and sharp businessman. They tell me the quarter horses wouldn’t have survived in California if it hadn’t been for him. I don’t know Mike Pegram nearly as well, but everybody I talk to speaks very highly of him.”

Pegram, who lives in Paradise Valley, Ariz., races most of his horses in California. Last year, he lost out to Churchill Downs in a bid for the Fair Grounds, the New Orleans track that was sold to the Kentucky company for $47 million.

“Without Ed Allred’s support, I wouldn’t even consider this venture,” Pegram said. “Also, if I didn’t feel we could build a first-class thoroughbred facility, I would not move forward. People might say I’m crazy, trading New Orleans for a shot at this, but take one walk around Los Alamitos and you can see the potential.”

Times Staff Writer Roger Vincent contributed to this report.