RIO RANCHO — Attorneys representing the city of Rio Rancho and the company that previously managed the Santa Ana Star Center have agreed to ask a mediator to help settle a dispute stemming from financial problems at the arena.
At a recent hearing, the city’s attorney Randy Bartell said he expects mediation talks could take place in early spring, with Paul Bardacke of Sutin, Thayer and Browne likely acting as facilitator.
The hearing pertained to a breach of contract lawsuit Global of Rio Rancho filed in June 2009, claiming the city undermined the company’s ability to run the Star Center profitably. The city countered that the Arizona-based company’s predictions about the Star Center’s potential success constituted fraud and negligent misrepresentation, causing the city financial harm.
The hearing before Sandoval County 13th Judicial District Chief Judge Louis P. McDonald focused on documents the city requested from Global. The city wanted Global to produce the evidence on which it based projections that convinced the city to sell $36 million in bonds backed by tax revenue to build the center.
City officials signed a 10-year contract with Global Entertainment in 2004. The company predicted Star Center activities would bring in $1.6 million in its first year. Instead, the center has lost money each year since it opened in 2006, forcing the city to pay out millions to cover the bond payments. The city terminated Global’s contract in early 2009.
Global’s attorney Michael Cadigan told McDonald he was unable to find the requested documents despite an extensive search of the company’s storage rooms in Arizona and asked the judge to grant more time to search. He also suggested pursuing a settlement with the help of a facilitator.
Bartell expressed frustration, saying Global had initially said it would provide the documents and was now saying they may not exist. He conceded that mediation could be a good way to resolve the case.
McDonald agreed to allow Cadigan two more weeks to search for the requested documents.
After consulting with Bartell and Cadigan, the judge also said he would ask Bardacke to facilitate mediation talks.