Mike Pegram Looks to ‘Steal’ Del Mar with a 55-year Lease?

This week’s LET IT RIDE.COM HOT TOPIC comes from Pat Maio of North County Times…take a read and VOICE AN OPINION!

HORSE OWNERS EMERGE IN BID TO PURCHASE DEL MAR

ARCADIA, CALIFORNIA β€” DEL MAR —- A who’s who triumvirate of horse owners has emerged as a key investment group behind the city of Del Mar’s effort to buy the Del Mar Fairgrounds and racetrack for $120 million, according to owners interviewed Wednesday.

Famed thoroughbred owner Michael Pegram, 58, has recruited successful automobile dealership owners from the Tucson, Ariz., area who have been friends for years, and are co-owners of several horses and have posed together in the winner’s circle of some of horse racing’s premier events.

Karl Watson, 60, owner of Chevrolet and Infiniti dealerships in Tucson, and Paul Weitman, 68, owner of Lexus, Jaguar, Land Rover and other dealerships, confirmed that they are involved in putting together an ownership group with Pegram to help in the bid for Del Mar.

Both of the auto franchise owners said that their auto empires in Arizona are among the largest in the Southwest, and each generates north of $100 million in revenue annually. Pegram, who confirmed his interest in the Del Mar property last week, owns several McDonald’s fast-food franchises in the Phoenix area and casinos in Nevada.

“We want to try and keep horse racing in California,” said Weitman, who is looking to buy a summer home in the nearby Rancho Valencia resort community if the deal comes about.

“A lot of people don’t realize how tough horse racing is these days,” he said of the industry. “It’s not in as good a shape as it could be.”

Watson, who has a summer home in Solana Beach, expressed similar concerns about the industry.

“Horse racing has the potential to get in trouble if something doesn’t happen to save it,” Watson said. “I don’t want to go back east on a regular basis, and I don’t want to spend summers there. We are cautiously optimistic that the politics can get ironed out, and everyone can make some compromises and do what’s best for the horse industry.”

The Del Mar-led effort to buy the Fairgrounds and racetrack is contingent upon a two-thirds vote in the state Legislature to wrestle the 400-acre property away from its state agency owner, the 22nd District Agricultural Association. The legislative gambit, pushed by state Sen. Christine Kehoe and Assemblywoman Lori Saldana, both Democrats, nearly came to pass earlier this month as part of a secret deal to help close a $20 billion deficit in the state budget.

Pegram and his partners are co-owners of the 2010 Preakness Stakes winner, Lookin’ At Lucky, and other successful thoroughbreds.

The Pegram group’s role is one part of a three-pronged plan to fund the purchase of the Del Mar fairgrounds and racetrack property from the state.

Details still must be worked out, but the city could finance part of the deal by borrowing upward of $40 million by issuing new revenue bonds. Second, the city has proposed that Pegram’s group pay $30 million for a 55-year right to run the racetrack and commit significant funding to improve the property. The Pegram group would pay the city a portion of the revenue stream generated from running the track —- a kind of lease payment —- pocket the rest as profit, and invest up to $10 million or $15 million to improve the fairgrounds and racetrack.

Finally, city officials said the state has offered to lend money to the city to make the acquisition. The 55-year lease payments that it collects from the Pegram group would be used to repay the state.

“The city of Del Mar is working regularly with the governor’s office finalizing the details of the agreement. At this point, I am waiting to see what needs to be done,” said Kehoe in a prepared statement.

WHAT’S YOUR TAKE?

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