Commercial Development Predicted for Hollywood Race Track

The horse track where Hollywood heavy hitters once came to bet is changing ownership, and likely soon to become extinct altogether. In a $260 million deal announced today, Churchill Downs Inc. announced its intentions to sell the storied 238-acre Hollywood Park in Inglewood, Calif., to Bay Meadows Land Co. in a deal scheduled to close in mid-September.

As part of the agreement, Bay Meadows will run Hollywood Park as a horse track for three more years and invest $5 million in capital improvement. Beyond 2008, however, that may be all she wrote about Hollywood Park. If the park's money woes continue, as sources expect they will, Bay Meadows says it will close the track and redevelop the area. Bay Meadows is currently in the process of redeveloping its own 83.5-acre horse track in northern California for commercial and residential properties.

"There's hasn't been a lot of retail development in the city of Inglewood for a really long time," said Jesse Laikin, senior vice president & principal at Lee & Associates. Laikin predicts an infusion of mixed-use properties, including some industrial development, given Inglewood's proximity to Los Angeles International Airport.

Although residential properties are a possibility, Laikin said the city could use the tax dollars that commercial real estate would generate. "(Inglewood is) a little bit blighted. It needs a new injection of commerce more than anything else," he noted.

Churchill Downs bought the 67-year-old track six years ago for $140 million, but since then has had to endure the public's waning interest in horse racing brought on particularly by economic competition from off-track betting and the national proliferation of local casinos. Another hit came in 1999 when Inglewood's Los Angeles Forum lost the Lakers and Kings pro sports teams to the Staples Center in downtown Los Angeles. The recent development of a casino on the Hollywood Park property has given some hope to residents of an Inglewood revival. But the lack of restaurants, retail and other commercial property has stifled any serious growth.

A Hollywood Park development could change that for consumers, Laikin expects. "If there was more there, I think they would spend their money."