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Downs Protest Says Bid Leaked

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Laguna Development Corporation says officials from the Downs at Albuquerque likely had access to Laguna’s confidential bid for a 25-year lease to operate a racetrack and casino at the Expo New Mexico fairgrounds.

The Downs was awarded the lease, and Laguna has filed a protest that includes the allegation that the Downs had improper access to its supposedly confidential information.

Laguna, the only entity other than the Downs to submit a bid, also claims in the protest that its proposal was a better deal for Expo and that the Downs should have been disqualified for failing to prove its financial viability.

In its protest, Laguna Development says the Downs “may have had access to the contents of (Laguna Development’s) proposal prior to submitting its best and final offer,” and “was allowed improper involvement in the procurement process.”

In support of that, Laguna Development questions how Downs’ officials arrived at a benchmark of $43.8 million in annual slot revenues to trigger a revenue-sharing provision of the lease – the identical benchmark Laguna Development offered in its supposedly confidential best and final offer.

Laguna Development says it can’t prove some of its claims because Expo officials have refused to make needed documents available, despite repeated attempts to obtain them under the state’s Inspection of Public Records Act.

A call seeking comment from Expo interim general manager Dan Mourning was not returned Thursday.

A phone call seeking comment from Downs at Albuquerque vice president Traci Wolf on Thursday evening was not immediately returned.

Laguna Development also claims that, under conditions set out by the RFP and state Procurement Code, the Downs “did not fully disclose its financial condition, or the State Fair failed to properly investigate the Downs’ qualifications.”

As such, the Downs should have been disqualified, the protest says.

The Downs at Albuquerque has leased a large segment of the state fairgrounds since 1985. With its lease set to expire within six months, Expo issued a “request for proposals” in late July and gave interested parties 30 days to respond.

A three-member “evaluation committee” appointed by Gov. Susana Martinez reviewed the proposals and recommended the Downs’ bid.

Mourning – a Martinez appointee – then negotiated a contract with the Downs that includes construction of a new multimillion-dollar casino near Central and Louisiana.

A divided State Fair Commission, whose members are appointed by the governor, approved the lease on a 4-3 vote, and the state Board of Finance, chaired by the governor, approved it on Dec. 20.

Critics have said the process was rushed.

Laguna Development, which operates Route 66 and Dancing Eagle casinos west of Albuquerque for Laguna Pueblo, notes in the protest that it offered to invest $30 million, entirely self-funded, in a new casino as opposed to the Downs’ $20 million, which would require some financing.

Laguna also offered $41 million in capital improvements over the life of the lease, as opposed to the Downs’ “history of minimal investment and continued operating losses.”

Laguna Development is asking that all actions related to the lease be suspended until its protest is fully resolved, and that the State Fair rescind the award of the lease to the Downs and give it to Laguna Development.

In lieu of that, the protest states, the procurement should be canceled and a new RFP that adheres to the State Procurement Code should be issued.

It also requests that a hearing on the protest be held after “reasonable discovery” – or time to obtain needed documentation and testimony – is given.

The protest is handled by the state General Services Department.

Through a spokesman, State Purchasing Agent Lawrence Maxwell said any entity that is dissatisfied with the results of a bid protest can seek remedy through state District Court.
— This article appeared on page A1 of the Albuquerque Journal

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