Golden Gate Fields Auction Set for April 3

By Richard Brenneman
Thursday March 12, 2009 - 05:09:00 PM

Albany’s Golden Gate Fields goes on the auction block April 3 as part of a court-mandated sale of properties owned by ailing Magna Entertainment. 

Magna, the Canadian-based firm that emerged as the world’s largest owner of race tracks, is in bankruptcy actions on both sides of the U.S.-Canada border. Three of its tracks will be auctioned off in the sale. 

But the ultimate winner may well by the company’s parent firm, MI Developments (MID), which holds liens against the company and has entered a so-called “stalking horse bid” for three tracks—Golden Gate, Pimlico and Lone Star—as well as Magna’s odds-processing firm, a betting service and other real estate. 

If MID wins its $195 million bid it will move immediately to commercially develop the site, a move certain to ignite a political firestorm in Albany. 

In an announcement from corporate headquarters in Aurora, Ontario, MID announced that if it wins the Albany track, “it intends to immediately commence seeking all requisite approvals to develop the property for commercial real estate purposes.” 

But some of the company’s minority investments are alarmed, including New York-based Greenlight Capital, and they will get a hearing in bankruptcycourt March 13. 

Greenlight has been highly critical of Frank Stronach, the Canadian auto parts magnate whose Magna International originally owned the tracks before investors forced him to spin them off into a separate company because of ongoing losses. He controls the bulk of voting shares of both MID and the entertainment company, one of the reasons for the rising investor discontent. 

Another critical shareholder closer to home is Farallon Capital Management of San Francisco, which has been highly critical of MID’s funding of the entertainment company, according to filings at the Securities and Exchange Commission.  

Albany City Councilmember Robert Lieber said Stronach’s development plans sound “horrible.” 

“I hope we can keep racing for at least a couple of years,” he said. The city’s share of the betting revenue contributes about a half-million-dollars annually to the city’s coffers. 

Lieber said he hoped that the East Bay Regional Parks District would be able to obtain at least some of the site with the help of revenue bonds approved last year by voters in both Alameda and Contra Costa counties. 

Calls from Albany officials to Magna offices haven’t been returned, he said.