07/23/2010 10:55AM

California Horse Racing Board presses Magna on Oak Tree lease

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Magna International Developments, the parent company of Santa Anita, must sign a lease agreement with the Oak Tree Racing Association for Oak Tree's fall meeting at Santa Anita by Friday afternoon, or risk losing its license to operate Santa Anita, Golden Gate, and the XpressBet account wagering service, the California Horse Racing Board mandated on Thursday.

Officials with Santa Anita and Oak Tree said the deal could be finalized by the deadline, and possibly by the end of business on Thursday.

Last month, Magna International, chaired by Frank Stronach, and Oak Tree reached a verbal agreement for Oak Tree to race at Santa Anita this fall. Oak Tree's lease was voided in the spring after Magna International took over management of Santa Anita following the bankruptcy of Magna Entertainment, another Stronach-controlled subsidiary.

When the lease was voided, Oak Tree began discussions with Del Mar and Hollywood Park about relocating its meeting to those tracks. Oak Tree decided to stay at Santa Anita after reaching a verbal agreement with Magna International at a racing board meeting in June.

The deal had not been finalized between Magna International and Oak Tree by Thursday's racing board meeting because Magna International did not have a necessary waiver from the racing board to operate the two racetracks and the account betting service. A single entity is not allowed to own more than one racetrack in California without a waiver from the board.

After a lengthy discussion revealed that the absence of that waiver was holding up the lease, the racing board's chairman, Keith Brackpool, introduced a motion that Magna International would be granted existing license waivers as long as the Oak Tree agreement was reached.

Initially, Brackpool gave the two groups until July 30 to reach an agreement but then moved the deadline to Friday at the urging of Oak Tree's executive vice-president, Sherwood Chillingworth.

"I think it should be done immediately," Chillingworth said. "We've got contracts to sign. Why wait?"

When Santa Anita official Scott Daruty told the racing board that he and other executive had the authority from Magna International officials to sign a lease with Oak Tree immediately, Brackpool moved the deadline to Friday.

At Thursday's meeting, Magna International was scheduled to present to the racing board a report on plans for its California tracks and the company's future in California, but company officials informed the racing board earlier this month that it would not issue the report, citing the need to keep some business plans confidential.

Brackpool told the Magna officials that the information would remain confidential, and not made public record. He scolded Magna officials, however, for not having the report completed.

"This has to be resolved," Brackpool said. "I don't think I can make myself any clearer. If we can give you a confidentially agreement, then send it. To send me a letter on July 6 saying we don't have a confidentially agreement is in the 'dog ate my homework' category.

"I want to know what MI Developments will do with this multiple ownership. What's the management structure? What's the business structure? Will you invest in capital expenditures?"

During the discussion, commissioner Bo Derek asked Magna executives if a business plan existed. "Not in a final form," Magna California president George Haines said.

There was testimony before that board that the absence of an extensive business plan from Magna or an agreement between Magna and Oak Tree was detrimental to California racing.

"What we really need is stability," said Guy Lamothe, the chief operating officer of the Thoroughbred Owners of California. "We need stability for owners and breeders to know that the anchor racetrack in California will be here. We're not sending that signal today, and we haven't for some time. We're doing nothing here today to attract owners back in California when we hear this."

Haines also told the racing board that Santa Anita will undergo renovation of its Pro-Ride brand synthetic track this summer while the track is closed. The renovation begins on Monday and will focus on an area near the finish line that has failed to drain sufficiently during significant rain storms in recent years, Haines said.