I can say from experience... do it right the first time. Don't attempt to do this unless you have the proper equipment or are prepared to rent some. You'll have to dig up a top layer of soil over a large surface area.. a regular tractor or even a bobcat is too small for the job. It will take you FOREVER.. trust me I know. You'll need a giant loader/bulldozer. 1" gravel base and then stone dust on top.. You'll need a box blade for spreading it all out. You'll also need a transit to make sure its level. It's best to make the center of the arena slightly higher (a degree or two) for quick drainage. If you slope it all in one direction (like ours) all your sand will end up at the low end of your arena quickly.
After you level your stone dust.. mist it with water while you roll it... it may take a few passes over a few days.. let it sit until rock hard. Lay sand on top as desired.
ALWAYS do it right the first time. Trust me it will save you alot of headaches in the future.