Oak Tree stays at Santa Anita

Oak Tree Racing will run at Santa Anita Park this fall as scheduled after all, but unless something dramatic changes thereafter, the owner of Santa Anita Park parent MI Developments said he has no intention of housing Oak Tree or any other tenant at Santa Anita in the future.

MID owner Frank Stronach came out swinging this morning (Tuesday, June 22) at the California Horse Racing Board, challenging and arguing with board members, one of whom at one point yelled at him to be quiet.

Frank Stronach, courtesy AndreasTischler.com

Later in the session, Stronach said he had no intention of salvaging Oak Tree at Santa Anita this fall but later said he would grant a one-year reprieve only if it would benefit everyone involved.

In a bizarre sequence of events that amounted to the CHRB acting as negotiating agent on a compromise deal with Oak Tree Racing, five board members of Oak Tree quickly huddled just outside the back of the room and came back with the pronouncement that they accepted the one-year offer to run the Oak Tree meet at Santa Anita this fall.

Stronach appeared at the regular monthly meeting of the CHRB to address his concerns about the state of the horse racing industry and his desire to loosen regulations on track owners that would need to be approved by the CHRB and potentially the state legislature.

The meeting began at 9:30 a.m. but the Stronach item on the agenda did not get called until shortly before 12 noon. His initial part of the agenda and the subsequent agenda item relating to Oak Tree ran nearly two hours until 1:45 p.m.

Based on a live audio feed of the meeting provided online by the CHRB, Stronach opened by responding to what he called recent “misconceptions” and “slanderings” by board members and others in the horse racing community following his canceling of contracts with Oak Tree Racing at Santa Anita, rumors that he might be angling to close Santa Anita, and reports of his reluctance to replace the track surface yet again (he later said he has found a new silica sand-based material that that he plans to install at Santa Anita in summer 2011), and that he may be considering a dramatic change of rules for tracks in Southern California to allow year-round and weekend-only racing, among other things.

“I was never threatening to close Santa Anita,” he said. “I’m not threatening to close Santa Anita. I’m not threatening but making a plea that we should do everything we can to ensure Santa Anita and Golden Gate Fields (another track he owns in San Francisco) remain racing entities.”

Stronach said he has invested $250 million in his tracks and yet “we haven’t brought out a cent.”

He said MID is prepared to invest further but only if it makes business sense. “A business that doesn’t make a profit is a burden to society.”

He went on to address criticisms about him being a California track owner who was born in Austria and whose business is based on Canada.

“Our two race tracks have always been managed by Californians.” he defended.

Stronach said horse racing competitors are casinos and lotteries, the latter of which he said has grown from a $5 billion business when horse racing was $20 billion business, to become a $70 billion lottery business while horse racing has shrunk to $13 billion.

“We are trapped in laws but laws are made and changed by people. It’s very urgent. It’s gotta be free enterprise.”

Board members then quickly became exasperated as they were unable to coax him into providing any specifics about his planned changes or recommendations. Tempers ignited as Stronach’s only specifics came as he interrupted board members to complain about their comments towards him in recent weeks. That’s when one of the board members interrupted him by saying loudly, “Hey, Hey, Hey, I’m talking now!”

Shortly thereafter the tone finally softened though there was no ground gained on anything specific.

When a female CHRB member charged that Stronach “drove away the Breeders’ Cup (with the uncertainty of the future of Oak Tree Racing) — I find that so detrimental to California Horse Racing,” Stronach responded by saying, “That’s a completely wrong statement. We’re happy to have Breeders’ Cup; we didn’t drive it away; we wanted it.” When he blamed the CHRB for not approving dates for Breeders’ Cup, a board member said Stronach never requested any dates for the CHRB to consider.

When a board member came back by suggesting that the loss of Breeders’ Cup to Churchill Downs in 2011 was due to canceling the Oak Tree lease, Stronach said, “I canceled the lease to Oak Tree because it doesn’t make business sense. You cannot operate like a club.”

One board member suggested that Stronach not look at horse racing as a business but as public trust, but Stronach said that sounded like socialism if he is suggesting that the state take over control of horse racing.

“It would be nice if someone would buy Santa Anita but no one can afford it, not even close,” he said.

After nearly an hour, as the first-round of questioning was winding up to allow for visitor comments, Stronach’s indignation reared again when he said, “I’m very resentful when you trash my reputation. I need this like a hole in the head. I’m of a certain age and there are things I would like to do — I want to go skiing but I spend so much time on this.”

After public comments Stronach suggested his comments directed at a couple of board members were perhaps too strong, to which one of them responded by saying that he wanted to make it clear that he has no animosity towards immigrants since his father is an immigrant and the board member is first-generation. There are no problems here about that — this is not Arizona,” he said.

As the board meeting continued they took up the issue of Oak Tree Racing, with Director and Executive Vice President Sherwood Chillingworth saying they are still waiting to have a conversation with MID/Santa Anita since May 17, though they have had very constructive conversations with Del Mar and Hollywood Park and are prepared to “go that direction.”

“We would rather stay at Santa Anita, which has been our home for 41 years,” Chillingworth said. “The City of Arcadia will be terribly impacted.”

Chillingworth challenged Stronach’s assertion about the Oak Tree deal with Santa Anita not making good business sense. “We have given them over $50 million in payments over the last 11 years; I don’t understand how the economics don’t work on that level.”

It was shortly thereafter that Stronach made it clear that Santa Anita is no longer interested in “having a tenant in our house.”

But he did offer an olive branch to compromise by allowing Oak Tree to go ahead with its meet at Santa Anita this fall.

Chillingworth said the original demand by Oak Tree was that the length of the lease be honored per the contract that was canceled, which would have extended Oak Tree’s lease for five more years, but in the interest of compromise, he asked the board for a few minutes to caucus with five Oak Tree board members to consider going ahead with Oak Tree this fall at Santa Anita.

He returned a few minutes later announcing Oak Tree agreed to run one more meet at Santa Anita under the terms of the previous contract, and he extended an apology and thanks to the people at Hollywood Park and Del Mar for their offers and patience.

So Oak Tree will hold its 42nd annual five-week meeting at Santa Anita beginning Sept. 29.

The CHRB concluded on a note of hope that perhaps the compromise for this fall will result in a long-term solution to keep Oak Tree Racing at Santa Anita.

Oak Tree, which conducted its first meeting in 1969, is a not-for-profit, non-dividend-paying group of active California owners and breeders whose directors serve without compensation.

Since 1969, the Oak Tree Racing Association has contributed more than $26 million to projects benefiting the racing industry and Oak Tree has hosted the Breeders’ Cup World Championships on five different occasions, in 1986, 1993, 2003, 2008 & 2009.

— By Scott Hettrick