INGLEWOOD, Calif. - The Bay Meadows Land Company, which operates Bay Meadows racetrack in northern California, has agreed to purchase Hollywood Park from Churchill Downs Inc. for $260 million, officials from the two companies said Wednesday.\nThe deal, which is expected to be completed in the coming months, could lead to commercial or residential development of the 240-acre site on which the 67-year-old racetrack sits. The agreement was announced jointly by Churchill and Bay Meadows.\nIn a statement, Bay Meadows said it would assume management of racing operations at Hollywood Park and would seek legislation to "improve the racing climate in California." But there is widespread speculation that Hollywood Park will likely cease to operate as a racing venue in the near future.\nTerrence Fancher, the president of Bay Meadows Land Co., said in the statement that the company "will seek alternative uses for the current racetrack site, in collaboration with the city of Inglewood, in the event that our best efforts are unable to improve the underlying economics of the horse racing industry and to stem the tide of horses leaving the state."\nTo shore up the sport's finances, California racing interests have sought to add slot machines at racetracks. Last year, California voters soundly defeated a referendum that would have allowed slot machines to be installed at racetracks and card clubs.\nIn recent months, California racing officials have held wide-ranging discussions with officials from California Native American tribes, with proposals including an economic agreement that would lead to a payment to the racing industry in exchange for dropping the pursuit of slot machines at racetracks. Such a scenario would lead to greatly increased purses in the state.\nAccording to Wednesday's statement, Churchill Downs will have the option to reinvest in Hollywood Park if "significant alternative gaming or gaming subsidies occur."\nPinnacle Entertainment, whose former chairman, R.D. Hubbard, led Hollywood Park in the 1990's, will continue to operate the Hollywood Park Casino, which is adjacent to the track, under a long-term lease.\nAlso, the statement said, Churchill Downs' simulcast network will distribute the simulcast signals for Bay Meadows and Hollywood Park for a three-year period.\nThe announcement of the sale ends months of speculation about the future of the racetrack. Churchill Downs chief executive officer Tom Meeker said in March that the company was "exploring its options" regarding Hollywood Park, but declined to be more specific at the time.\nIn recent weeks, Bay Meadows, which is owned by the Stockbridge Real Estate Fund of San Mateo, Calif., emerged as the leading contender to buy Hollywood Park. Earlier this spring, several major development companies submitted bids for the property with the intention of building homes and shopping areas, according to published reports.\nChurchill purchased Hollywood Park for $140 million in 1999. At the time, Churchill said it wanted a West Coast presence to expand its simulcasting network.\n \nThe sale to Bay Meadows comes at a time when Churchill is exploring the possibility of bidding on the franchise to operate the New York Racing Association's three racetracks, which would require a large cash payment.\nFrom 1991 to 1999, Hollywood Park was owned by a group led by Hubbard, the owner of Ruidoso Downs in New Mexico.\nUnder Hubbard's direction, Hollywood Park underwent a major facelift to its grandstand and grounds. Churchill Downs did not make significant changes in the years that it operated the track.\nDevelopment is already encroaching on the area surrounding the racetrack.\nProperty south of the stable area, owned by Hollywood Park as recently as the 1990's, is now the site of a major shopping center. A housing development is under construction north of the stable area.\nThe absence of racing at Hollywood Park in coming years would set off a battle over racing dates in Southern California. Del Mar and Santa Anita are likely to ask the California Horse Racing Board for more dates for their respective meetings.\nMike Pegram, the prominent owner-breeder, has proposed a $40 million expansion of Los Alamitos Race Course in Orange County that would include the construction of a one-mile dirt track, a turf course, and renovations to the backstretch and grandstands.\nUnder Pegram's proposal, Los Alamitos would essentially replace Hollywood Park on the calendar, offering Thoroughbred racing in the afternoons and Quarter Horse racing in the evenings.\nHollywood Park has enjoyed a rich history since it opened in 1938. Seabiscuit won the first Hollywood Gold Cup, the track's signature race, which will be run for the 66th time on Saturday. Convenience beat Typecast in an $250,000 winner-take-all match race in 1972, and the pick six was introduced to the American racing audience in June 1980. The track ran the first $1 million race for 2-year-old Thoroughbreds when it staged the 1983 Hollywood Futurity.\nHollywood Park hosted the inaugural Breeders' Cup in 1984, as well as in 1987 and 1997.