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Friday, Jun 14, 2024

Slow Ride

The bumper sticker slogan “Go broke – buy a horse” used to be an inside joke with the horsey set. That was when equestrian sports, ever popular in the greater San Fernando Valley region, were still considered “recession-proof.” The Los Angeles Equestrian Center and its onsite businesses are trying to revive those salad days. The 550-horse facility at Griffith Park, which for decades had a several-month waiting list to board a horse, today has a 15 percent vacancy rate in its barns, which normally generate $3 million of its $5 million in annual revenues. And with no financial support from the city, state or private investors, the Burbank facility is hard-pressed to compete against other major horse centers in the United States that have the means to attract those precious equestrian dollars. Traditionally, horsemen had plenty of expendable income, and a considerable chunk of it went to bejeweled bridles and tailor-made riding togs, not to mention the imported steeds themselves. Many were purchased in Europe for six to seven figures and imported to the West Coast on an average travel tab of $10,000 per horse. Once they arrived, they were sent to live at the finest stables, with the L.A. Equestrian Center at the top of the list. George Chatigny, the center’s general manager, is trying to turn back the clock to that paradigm, as he has done so many times before when horse sports found themselves threatened by the economy. He has created other income streams, apart from the center’s bread-and-butter equestrian income, by renting portions of the grounds. The center has attracted the entertainment industry for location shoots and other businesses for corporate events and overflow parking. Individuals have selected the site for family picnics, weddings and other functions that make use of the center’s full banquet facilities. “The facility was so well thought out,” Chatigny said. “The design still stands today and works perfectly.” Ups and downs Chatigny has seen the good times come and go and come back again in varying degrees, including the center’s rebound from Chapter 11 bankruptcy, during his 30-year career there. The center leases the 72-acre property from the City of Los Angeles and has about 15 years remaining on the contract. It operates under a concession agreement with the City’s Parks and Recreation Department and pays a portion of its income to the City. The center charges onsite trainers $40 per month for each horse in training and collects board from horse owners. Ranging from $483 to $630 per month, board generates the center’s largest revenues. With a 15 percent vacancy rate, the facility is losing out on about $550,000 annually, on average. The facility is only allowed to increase board rates once a year, unlike private facilities that are not regulated, and board increases at LAEC cannot exceed those of the consumer price index. Despite the challenges, Chatigny clearly loves his job. “Having a large boarding facility here (on city land) was cutting-edge,” he said, reminiscing about when the center was built in 1982 with $10 million from private investors and a $10 million bank loan. The showpiece facility initially blossomed but soon faltered financially. A few years after it opened, lenders foreclosed and the center filed for Chapter 11 bankruptcy. In 1990 a new group purchased the center, incorporated and reorganized it, and quickly put it back on track. The 1995 Dressage World Cup Final was held there — the first time the prestigious event had taken place outside Europe — and to this day the center hosts World Cup grand prix show jumping qualifying competitions and other major events. Given its stature, few are aware that the equestrian center lacks the financial backing of many of its counterparts. The Kentucky Horse Park, for example, is supported by state funds and a wealthy private foundation. WestWorld, owned by the City of Scottsdale, Ariz., in March was awarded a $40 million municipal bond for expansion. That makes it difficult for an aging 30-year-old facility to compete when bidding for top-tier equestrian events that generate major revenue. This year the Del Mar Fairgrounds, which receives State of California funding, hosted the official selection trials for West Coast riders seeking a seat on the U.S. equestrian team for the London Olympics. In 2010, among strong bidding, the Alltech FEI World Equestrian Games were awarded to the Kentucky Horse Park; the event generated a statewide economic impact of more than $200 million. “We’re trying to run a business and be profitable,” said Chatigny. “Horses are an expensive activity, so there’s only minimal profit in it. And when you run a large company today in the City of Los Angeles, there are a lot of expenses.” Running ‘a city’ The center’s largest expense, Chatigny said, is workers’ compensation insurance for its 75 employees. Premiums have risen dramatically, driving up the center’s costs, he said. In addition to the management team, its three main departments are: stabling (20 to 25 stable attendants, who clean the stalls); maintenance and repairs (15), and events and technical support (8 to 10), who prepare the facilities before and after horse shows and other events. In a recent interview at the center, Chatigny motioned to the hubbub as trainers worked their horses, tractors conditioned the grounds and customers strolled in and out of the retail shops adjacent to the indoor riding arena, known as the Equidome. Dozens of sub-licensees operate on the grounds, including about 20 horse trainers, along with a panoply of riding instructors, store owners, a horse rental (trail riding) operation, and a horse feed and supply company. “This is a city. We’re open 24 hours,” he said. “The horses are our residents, the riding arenas are our parks, the horse stalls are our hotel rooms and the Equidome is our convention center.” The retail stores on the property – the city’s shopping mall, so to speak – pay monthly rent to the equestrian center. L.A. Saddlery, which sells riding equipment and clothing, moved to the center when the company formed almost five years ago. Co-owner Tabitha Knaub said, “The first couple years of the economic downturn were fine. This year it seems more noticeable.” She noted that people are giving away horses because they can’t afford to support them, while “five years ago our customers were still buying a new horse for Christmas,” along with new equipment. Glenda McElroy, owner of Cornerstone Event Management and Glenroy’s Gifts, established her businesses at the center in 1995, when she organized and managed the Dressage World Cup Finals for the first time. She considers her business “well situated” and has never considered moving from what she deems “one of the premier showcase facilities in the state.” Her equestrian-themed gift boutique and coffee shop benefit from foot traffic by horse show competitors and spectators, riders who board horses there, trainers, and local residents who walk or bike in on a regular basis. She has had “a little struggle” remaining profitable the past few years, she said, because consumers don’t have a lot of upfront money and “the horse business is all about disposable income.” Still, she said, the future looks better. “I see the middle ground coming back.”

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