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SAN MATEO, CA-Stockbridge Real Estate Fund has tapped Colliers International to go hunting for land to replace the existing Bay Meadows Racetrack here that is slated for a transit-oriented mixed-use redevelopment. Stockbridge owns Bay Meadows Land Company, which in turn owns the racetrack.

With help from Colliers’ executive Phil Arnautou, Stockbridge has said it will be looking in outlying Bay Area communities where land is relatively less expensive. No more specifics were immediately available. Arnautou was not immediately available for comment.

Bay Meadows race track was built in the 1934. In the mid-1990s, with interest in horse racing declining and San Mateo having voted down the idea of adding a card room to the racetrack, ownership decided to begin selling and redeveloping portions of the property. A decade later, with voters turned down a statewide ballot measure to legalize slot machines at some racetracks, ownership is seeking to redevelop the main racetrack. The proposal calls for as much as 1.5 million sf of office space, 1,250 homes and three blocks of upscale commercial buildings built around a proposed CalTrain “express stop.” The City Council is set to vote on the project Nov. 7.

Paine Webber acquired 173 acres that included the racetrack in 1997. It broke off 90 acres that held a practice racetrack and stables and began selling off pieces to owner-users and developers. Franklin Templeton Investments built its world headquarters on some of the acreage. Texas-based JPI built a 575-unit apartment complex on another big chunk, and Ryland Homes acquired some of the acreage for a mix of town homes and single-family residences.

United Bank of Switzerland acquired the remainder as part of its Paine Webber purchase in 2000. Spearheaded by Terry Fancher, who worked for Paine Webber, Stockbridge took over the property two years ago in a $500-million transaction funded largely by a group of mostly pension-fund investors. The largest is believed to be Pennsylvania Public School Employees, which reportedly has a $368 million stake.

In January 2003, across from the JPI-built apartment complex, Stockbridge opened Park Place, a 7.2-acre mixed-use development with 190,000 sf of office, about 85,000 sf of retail and 19 live-work condominiums. In May 2004, Stockbridge took out a $50-million loan on the 83-acre racetrack to help run the track, seek entitlements for the redevelopment and lobby for passage of the aforementioned ballot measure, which was known as Proposition 68. At the time, Stockbridge VP Kristin Gardner called the financing “a process used in place of investor equity.”

Last month, Stockbridge acquired the 238-acre Hollywood Park racetrack property 11 miles south of Downtown Los Angeles in Inglewood, CA. Stockbridge paid Kentucky-based Churchill Downs Inc. $257.5 million for the property, which offers live racing during traditional spring/summer and autumn meets. The track opened in June 1938. Ownership at the time included Jack Warner of the Warner Brothers fame, Al Jolson, Walt Disney, Bing Crosby and Sam Goldwyn, among others.

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