Exhibit 8.1
September 26, 1997
Santa Anita Realty Enterprises, Inc.
301 West Huntington Drive
Arcadia, California 91007
Re: Santa Anita Realty Enterprises, Inc. and
Santa Anita Operating Company -- Joint
Registration Statement on Form S-4
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Ladies and Gentlemen:
In connection with the above-referenced joint registration statement
(the "Joint Registration Statement") regarding the proposed merger or Meditrust,
a Massachusetts business trust ("Meditrust"), and Meditrust Acquisition Company,
a Massachusetts business trust ("MAC"), into Santa Anita Realty Enterprises,
Inc., a Delaware corporation ("Realty", which after the Effective Time will be
named Meditrust Corporation), and Santa Anita Operating Company, a Delaware
corporation ("Operating Company"), respectively, pursuant to the Third Amended
and Restated Agreement and Plan of Merger, dated as of April 13, 1997, by and
between Realty, Operating Company, Meditrust and MAC (the "Merger Agreement"),
you have requested our opinion regarding certain federal income tax matters
related to Realty. Capitalized terms used in this letter and not otherwise
defined herein have the meanings assigned to such terms in the Joint
Registration Statement or the Merger Agreement.
The opinion set forth in this letter is based on relevant provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
thereunder (including proposed, temporary and final Treasury Regulations, the
"Regulations") and interpretations of the foregoing as expressed in court
decisions, administrative determinations, and the legislative history as of the
date hereof. These provisions and interpretations are subject to change, which
may or may not be
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retroactive in effect, that might result in modifications of our opinion.
In rendering our opinion we examined such records, documents and other
materials as we considered necessary or appropriate as a basis for such opinion,
including the following: (1) the Merger Agreement, (2) the Joint Registration
Statement (including all amendments made through the date hereof), (3) the
Pairing Agreement, dated December 20, 1979, as amended, between Realty and
Operating Company, (4) the Articles of Incorporation and Bylaws of Realty and
Operating Company, each as of the first taxable year for which Realty elected to
be a REIT, and as amended to the date hereof, (5) a copy of the Annual Reports
on Form 10-K for each of the years 1994-1996 for Pacific Gulf Properties Inc., a
Maryland corporation of which Realty was a shareholder (the "Pacific Gulf Annual
Reports"), (6) a letter from Realty's financial advisor, dated May 15, 1997,
advising Realty of the relative values of Realty Common Shares and Operating
Common Shares as of April 13, 1997, (7) the private letter rulings, dated
October 16, 1979 and January 11, 1980 (the "Private Letter Rulings") relating to
the qualification of rent receipts received by Realty from Los Angeles Turf
Club, Incorporated, a wholly-owned subsidiary of Operating Company, as "rents
from real property" for REIT purposes, and (8) such other documents and
information provided by Realty as we deemed relevant to our opinion.
In addition, Realty and Meditrust have each provided us with a certificate
(the "Officers' Certificates"), executed by duly appointed officers of Realty
and Meditrust, respectively, setting forth certain representations relating to
the manner in which Realty and Operating Company, and Meditrust and MAC, have
been owned and operated prior to the Mergers, and will be owned and operated
after the Mergers. We have also relied on the statements in the Joint
Registration Statement, the Merger Agreement and other documents relating to the
Merger (the "Documents") regarding the operation and ownership of Meditrust,
MAC, Realty and Operating Company, and on statements in the Pacific Gulf Annual
Reports regarding qualification of Pacific Gulf Properties Inc. as a REIT under
the Code. We have neither independently investigated nor verified such
representations or statements, and we assume that such representations and
statements are true, correct and complete and that all representations made "to
the best of the knowledge and belief" of any person or party or with similar
qualification are and will be true, correct and complete as if made without such
qualification and that no action will occur from the date hereof until the
Mergers that is inconsistent with such representations.
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We have assumed for the purposes of this opinion that (1) the Mergers and
related transactions contemplated by the Documents will be consummated in
accordance with the Documents and as described in the Joint Registration
Statement (including satisfaction of all covenants and conditions therein
without amendment or waiver thereof) and (2) Realty, Operating Company,
Meditrust and MAC, and any affiliated entities, have operated and will operate
consistent with their governing documents and applicable laws. We confirm to
you, however, that we are not aware of any facts that would lead us to believe
that any of these assumptions is false in any material way.
We have also assumed in rendering the opinion set forth herein (1) the
genuineness of all signatures on documents we have examined, (2) the
authenticity of all documents submitted to us as originals, (3) the conformity
to the original documents of all documents submitted to us as copies, (4) the
conformity of final documents to all documents submitted to us as drafts, (5)
the authority and capacity of the individual or individuals who executed any
such documents on behalf of any person, (6) the accuracy and completeness of all
records made available to us, (7) the factual accuracy of all representations,
warranties and other statements made by all parties, and (8) the continued
accuracy of all documents, certificates, warranties and covenants on which we
have relied in rendering the opinion set forth below and that were given or
dated earlier than the date of this letter, insofar as relevant to the opinion
set forth herein, from such earlier date through and including the date of this
letter. No facts have come to our attention, however, that would cause us to
question the accuracy of any such documents, certificates, statements,
representations, warranties or covenants in a material way.
Based upon and subject to the foregoing, we are of the opinion that:
1. For the calendar year 1996, Realty met the requirements of the Code for
qualification as a REIT, and if Realty continues its operations in the same
manner as it has in such year, Realty will continue to so qualify.
2. Assuming Realty and Operating Company will conduct their operations in
accordance with the Private Letter Rulings, the consummation by Realty and
Operating of the transaction contemplated by the Merger Agreement will not
adversely affect the qualification of Realty as a REIT or its ability to retain
its status as grandfathered from the application of Section
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269B(a)(3) of the Code pursuant to Section 136(c)(3) of the Deficit Reduction
Act of 1984.
Realty's continuing qualification and taxation as a REIT after the Merges
will depend upon Realty's ability to meet on an ongoing basis, through actual
operations, the various requirements of the Code and the Regulations described
in the Joint Registration Statement with regard to, among other things, its
income, assets, distribution, ownership and certain administrative matters.
O'Melveny & Myers LLP will not review Realty's compliance with these
requirements. Accordingly, no assurance can be given that Realty will continue
to satisfy the requirements for qualification and taxation as a REIT for any
particular taxable year.
Other than as expressly stated above, we express no opinion on any issue
relating to Realty or to any investment therein. Meditrust and Operating Company
may rely on this opinion as though it were addressed to them.
We hereby consent to the filing of this opinion as an exhibit to the Joint
Registration Statement and to the use of the name of our firm therein and under
the captions "Material Federal Income Tax Treatment of the Mergers" and "Legal
Matters" in the Joint Registration Statement.
Respectfully submitted,
O'MELVENY & MYERS LLP