The Yavapai Downs horse racetrack is set to go on the auction block Tuesday, April 3.
U.S. Bankruptcy Court Judge Redfield T. Baum will take bids at the hearing in the bankruptcy court building in Phoenix at 10 a.m. Bidders must bring $50,000 cashiers checks as security deposits.
The judge agreed Wednesday with the bankruptcy trustee's request to expedite the hearing and schedule it 13 days out instead of the usual required 21 days.
"The sooner a sale can be scheduled, the more likely it is that a horse racing season will result, and the more value the real property has to the estate," the trustee noted in his request.
The track used to open on Memorial Day Weekend.
"A delay in getting the track sold could cause difficulty in getting enough horses up there," Arizona Horseman's Benevolent & Protective Association President Gary Miller said.
Horsemen might be forced to go elsewhere or lose that option, although many would prefer to stay in Arizona, he said.
So far the court has received three bids in letters of intent, but two contained contingencies unacceptable to the court, said George Cunningham, whose Phoenix-based Cunningham & Associates company is conducting the auction with National Commercial Auctioneers.
Court records show the third bid was for $1.5 million, but the records don't reveal the bidder's identity.
The auctioneer's asking price is $12.7 million. The Yavapai County Assessor's Office valued the facilities at $20 million in 2010, then dropped the value to $5.4 million in 2011 when it used a different valuation method at the request of the Yavapai County Farm & Ag Association. The association declared bankruptcy last July after failing to operate its summer 2011 races.
The April 3 high bid must be approved by the judge as well as the U.S. government, since it still holds $14.7 million in loans on the track facilities. The U.S. Department of Agriculture has 48 hours to accept or reject a bid. The original loan was to the Yavapai County Fair Association to build the new track facilities in Prescott Valley 11 years ago.
Cunningham said about a dozen groups have expressed interest in purchasing the track, including track owners from other states, but he couldn't reveal their names.
Turf Paradise General Manager Vincent Francia said Turf Paradise owner Jerry Simms won't be one of the bidders. But Turf is interested in helping get Yavapai Downs back open since that helps get more horses to Turf in Phoenix during the winter. Turf kept the off-track betting sites open in Arizona last summer.
The facilities for sale include 125 acres housing the one-mile horse racetrack, the 93,328-square-foot grandstands, at least 862 horse stalls and a neighboring car racetrack.
Those interested in keeping up with auction information can follow Cunningham's website at auctionaz.com.
The sale includes contracts and leases outside of the car racetrack, since the bankruptcy trustee rejected that lease. Included is the lease with Yavapai County to use its events center next to the track.
The sale does not include government permits such as the Arizona Department of Racing racetrack permit. The Department of Racing notified the court Feb. 20 that it plans to consider renewing the Yavapai County Fair Association permit at its April 11 meeting. The Fair Association submitted the renewal request back in August 2009 before it turned its assets over to the Farm & Ag Association so the track could get another federal loan.
Gov. Jan Brewer recently appointed Bill Walsh, chief steward/senior supervisor of wagering and officials at ADOR, as its new director after Lonny Powell resigned late last year. Miller said HBPA is happy with the appointment.
The HBPA has been trying to help potential Yavapai Downs buyers but they wanted contingencies, such as making the sale contingent upon the buyer's acquisition of a state racing permit, Miller said.
The HBPA represents the horsemen in Arizona. The track's bankruptcy filing estimated it owes $500,000 to unsecured creditors including $26,036 to horsemen. These creditors are likely to get something out of the sale.
"Our interest as horsemen is to get the track sold and Yavapai running," Miller said. That means jobs for horsemen as well as many others, he noted.
The bankruptcy's court's draft sale agreement says buyers will have a chance to inspect the track property before closing.
The sale agreement also says the buyer won't assume liability for lawsuits against the Farm & Ag Association board for alleged breach of fiduciary duties. Trustee Brian Mullen filed such a suit against the Farm & Ag Association last September.
"If people did something wrong, they need to pay the price," Miller said.