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Saturday, March 13, 2010
$50 Million Racino Plan Stuck in Mud
By Thomas J. Cole
Journal Staff Writer
RATON — In August 2008, the state Racing Commission hitched its wagon to Canadian developer Michael Moldenhauer and his plans for a $50 million horse-racing track and slots casino in Raton.
The questions now are how long the Racing Commission is going to ride this horse and how the ride will end.
Since the commission selected a group headed by Moldenhauer to build the state's next racino, there have been repeated construction delays and questions about the group's finances.
The last racino to be built, Zia Park & Black Gold Casino in Hobbs, opened less than a year after commission approval. With Moldenhauer, it's 18 months and counting.
Raton was promised a field of dreams. So far, all it's gotten is a big tent in a patch of mud.
The tent is to house a temporary casino, which originally was supposed to open six months ago but remains under construction.
Meanwhile in Maryland, the state slots commission has decided it has had enough of Moldenhauer,
The commission in December rejected a casino proposal by a group headed by Moldenhauer, saying it was frustrated by the group's failure to meet deadlines and provide financing information.
Sound familiar?
Five companies that were part of the Moldenhauer proposal in Maryland are now suing him for alleged unpaid fees.
Moldenhauer, who is about 43, is from the Toronto area and develops commercial, industrial and residential properties. He is a well-polished salesman but has no experience in the casino business.
Moldenhauer said in a telephone interview Thursday that he has been "full speed ahead" on the Raton track and casino. He said his group didn't get formal approval of the project until last June, when it was licensed by the state Gaming Control Board to have slot machines.
"There are things that go beyond our control, and we have to stay on top of them," he said of the construction of the temporary casino.
Moldenhauer said his group is appealing the decision by the Maryland slots commission to reject its casino proposal. He said the group has backing from a large institutional investor but declined to name the investor.
He said repeated stories in The Baltimore Sun about the group missing deadlines and failing to provide financing information to the state slots commission were inaccurate.
Moldenhauer first proposed in September 2005 to build a racino in Raton.
He later took on former Santa Fe broker Marc Correra, whose father is a pal of Gov. Bill Richardson, as a minority partner.
The Racing Commission, which is controlled by Richardson, selected the plan for the Raton track over proposals by others for racinos in Tucumcari, Lordsburg and Santa Fe.
Who knows whether Moldenhauer would have gotten the deal without Correra as a partner?
Correra was forced to end his involvement in the racino in June after it was disclosed that he collected millions of dollars in fees for helping investment firms get business with the Richardson administration.
The Moldenhauer group had until the end of last year to buy out Correra, but Moldenhauer declined to provide terms of the deal.
The Racing Commission isn't alone in the wagon hitched to Moldenhauer. The Gaming Control Board, also controlled by Richardson, is aboard because it is the regulator for the casino operations at the racino.
The Long Ride
The Moldenhauer trail of broken promises and unanswered questions in New Mexico is a long one. Here's a recap:
• Moldenhauer said in November 2008 that the target date for opening the permanent casino was New Year's Eve 2009.
• The Gaming Control Board chairman said in May last year that Moldenhauer's group had failed to provide sufficient information that it could fund the racino.
• Moldenhauer said in May last year that the temporary casino would be "a really nice facility. We're going to convert it to another use when we're done. So, we're investing a little more money in the architecture, the theme and the concept."
• The Gaming Control Board decided in June last year to license the Moldenhauer group to run the casino but said it still wanted more financial information. One board member opposed the decision, saying she wasn't convinced of the accuracy of the financial information that had been provided.
• Moldenhauer said in September last year that the temporary casino would be opened by the end of January.
• The Gaming Control Board chairman said in December that Moldenhauer had still not provided proof of being able to finance the project.
• Moldenhauer said in January that the temporary casino would open before Feb. 25.
• Moldenhauer said this month that his group is "going to work diligently to be open for the first of May."
The Gaming Control Board has threatened to impose sanctions for the delays in opening the temporary casino but recently backed off a threat to pull the casino license if it isn't opened by May 1.
The Ride's End
How the story of the Raton track and casino will end is anyone's guess.
Work was continuing on the temporary casino this week. Prefab restrooms and offices still have to be connected to the tent, which is reinforced with metal wall studs and sits on a concrete slab. The parking lot, now a muddy mess, hasn't been paved.
Moldenhauer has said the track would have 60 days of racing this year beginning May 28, but the site has no track, grandstand or horse stalls.
In the interview Thursday, he hedged on the number of race days this year and the start date for racing but said racing would begin in 2010.
In Raton, you hear chatter about the racino just about anywhere you go in town. Will it still happen? If so, when?
Locals say the town needs the jobs, the boost in its tourism business and the other economic benefits of the track and casino. They still hope the dream will come true.
"It's got nothing to do with faith. It's going to open soon," Moldenhauer said.
UpFront is a daily front-page news and opinion column. Thom Cole can be reached in Santa Fe at (505) 992-6280 or at tcole@abqjournal.com.
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