Fiscal Plan for Equestrian Center Rejected

A City Council board rejected a plan for financial reorganization of the debt-ridden Los Angeles Equestrian Center at the close of a stormy hearing Wednesday.

However, a U.S. Bankruptcy Court is scheduled to evaluate the same plan today and could force the city to accept it, city officials said.

After the decision by the Board of Referred Powers, an attorney for Gibraltar Savings of Beverly Hills--which lent the center $18 million over the past several years--said the firm plans to foreclose on the facility Friday. Clifford J. Meyer said Gibraltar, the center’s largest creditor, plans to take over the lease of the 70-acre center in Griffith Park until a new operator is found.

But Meyer stressed that the facility will not be closed. He said horses boarded there will be cared for until there is a new operator. The city, which owns the center, would have to approve the new operator.

The foreclosure would end a tumultuous era for the center’s operator, J. Albert Garcia. Under Garcia’s leadership, the center has amassed $27 million in debts.

But Garcia noted that the bankruptcy court has not evaluated the reorganization plan. “The fat lady hasn’t sung yet,� he said.

Board members said they fear that Garcia’s reorganization plan--which calls for construction of a medieval-theme restaurant and conversion of stalls into horse “condominiums�--would make the center less of a public facility.

Boarders Optimistic

After the hearing, during which opponents and supporters of the plan debated bitterly, boarders at the facility said they were optimistic about the center’s future.

“We’ve got a lot of work to do, but I’m quietly hopeful,� said Peggy Stout, one of the plan’s main opponents.

The board, made up of five City Council members, voted 4 to 1 to reject a bailout plan under which the center would have received a $12.3-million loan from Trafalgar Holdings Ltd., a Los Angeles financial firm. About $9 million of that loan would go to Gibraltar to settle the debt.

Trafalgar had stipulated that the loan would be contingent on the conversion of 300 rental stalls into the horse condos, which could be purchased for $30,000 apiece, and on the building of the restaurant, from which diners could watch jousting matches.

Boarders vehemently opposed the plan, saying that their horses would be forced into less desirable stalls if they did not purchase the condos. They said the restaurant would rob them of exercise space for the horses.

Two weeks ago, four board members said they were opposed to the proposals, saying the condos and restaurant would constitute an improper use of parkland. Although the panel asked Garcia and the creditors to work out alternative plans for saving the center, Garcia returned to the panel Wednesday with basically the same proposal.

The atmosphere at the hearing was further charged by a protest by several stable workers, who had staged a walkout early Wednesday, complaining that they had not been paid for three weeks.

Garcia said he was unable to pay most employees on the last scheduled payday because investors were reluctant to put more money into the center.

Long-Term Leases Weighed

Garcia and Lawrence Taggart, Trafalgar president and chief executive officer, agreed Wednesday to work on an alternative plan--the building of new horse stalls that could be leased on a long-term basis. Such a plan would assure that current renters would not be displaced and that there would be no reduction of rental stalls in the future.

But George Turpin said he and other investors had no assurance that such a plan is viable. He said he and two other investors had lost more than $5 million on the center and were unwilling to invest more money.

“If they can’t come up with some plan that’s at least equal to this one, that will generate some income into the center, then I’m not going to put any more money in,� Turpin said.

Meyer then said that Gibraltar plans to go through with the foreclosure.

Councilman Richard Alatorre was the only member of the board to vote in favor of Garcia’s plan.

The Board of Referred Powers considers issues that may pose a conflict of interest for other city agencies. The Board of Recreation and Park Commissioners normally would have handled the matter, but had a conflict of interest because one of its members is an attorney for an equestrian center creditor.