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Casino Pitch for Downs Draws Criticism

By Charles D. Brunt
Copyright © 2010 Albuquerque Journal
Journal Staff Writer

          A proposal by Downs at Albuquerque president Paul Blanchard to extend the racino's lease at Expo New Mexico for up to 40 years —and build a new multimillion-dollar casino on the aging fairgrounds — is drawing fire from a state senator and a neighborhood association that didn't know a deal was in the works.
        "I knew their lease was coming up for renewal ... but I had no idea about building a huge new casino on the corner of Louisiana and Central," said state Sen. Tim Keller, D-Albuquerque, whose district includes Expo New Mexico.
        The proposal would put a new casino several hundred feet northwest of the intersection, with access by existing entrances, and State Fair Manager Craig Swagerty said Monday it's a good deal for Expo New Mexico.
        Keller, however, said the contract to run the racino should be put out to bid instead of being routed through the Legislature, where it would go for approval if it clears the State Fair Commission on Wednesday.
        The seven-member commission is appointed by Gov. Bill Richardson, and Blanchard is a major political ally and financial supporter of the governor.
        "I think it's just a matter of good business to let the contract out to bid every five or 10 years," Keller said.
        Ike Eastvold, president of the Fair Heights Neighborhood Association, said his group's long opposition to slot-machine gambling at the fairgrounds will continue.
        "Of course, we've gotten no notice about this at all," Eastvold said Monday morning after learning of the proposal. The Fair Heights neighborhood is northwest of Expo New Mexico.
        The State Fair Commission reviewed the full proposal for the first time last week, Expo general manager Craig Swagerty said Monday.
        The proposal calls for a 25-year extension of the Downs' lease at the fairgrounds, with an optional 15-year extension, and construction of a new 40,000-square-foot casino that could easily accommodate a doubling of the racino's current 300 slot machines and accompanying revenues.
        Swagerty said the proposal, drafted by the Downs, state General Services Department Secretary Art Jaramillo and Expo attorney John Meyers, eventually boosts the annual rent the racino pays Expo and relieves the fairgrounds of having to maintain the leased property.
        The proposal also would give Expo an escalating percentage of the Downs' gross revenues in excess of $43.8 million. But a similar provision in the Downs' current contract has never resulted in additional funds because the benchmark — $3.5 million in net income — has never been achieved. The proposal puts the Downs' "current casino revenue" at $16. 5 million.
        Swagerty has said that the $2 million-plus the racino pays Expo is necessary to keep the fairgrounds operating in the black.
        "This is an excellent deal for the State Fair," Swagerty said Monday. In addition to higher rent, the fairgrounds will no longer have the expense of maintaining the 96-plus acres covered by the Downs' lease.
        Latest attempt
        Swagerty said the public will have an opportunity to weigh in on the proposal when it goes before the Legislature, where it would have to be introduced as a bill.
        "This is one step of the process to take this from here, move it to the Legislature and then try to move on from there," he said, adding that the proposal must also be considered by the New Mexico Gaming Control Board and the New Mexico Racing Commission. Members of both panels are appointed by the governor.
        "The citizens are going to get a new casino" and Expo New Mexico gets a stable revenue stream, Swagerty said.
        The proposal is the latest attempt by Blanchard to get a new casino at the fairgrounds.
        When opposition killed a similar proposal in 2005, Blanchard threatened to move the racino to Moriarty.
        But less than a year after the Racing Commission approved the move to Moriarty, Blanchard sought, and received, a one-year extension on his lease at Expo plus an optional one-year extension. The first extension ends Jan. 11 , and the second, if granted, would extend to Jan. 11, 2012.
        The Moriarty deal has never materialized.
        Keller said that when Blanchard's current two-year extension was debated on the Senate floor in 2009, "there was clear consensus that there should be a competitive bid going forward. That message was loud and clear."
        Blanchard's office said he was en route from the National Finals Rodeo in Las Vegas, Nev., to Albuquerque on Monday and would be unavailable for comment until Wednesday evening.
        Second time
        In the 2005 proposal, Blanchard wanted to build a new casino on the southwest corner of Louisiana and Central;
        Given past opposition to a new casino at Expo, Keller said he doesn't give the new proposal much hope.
        "If the community doesn't want it — and it was clear in 2005 that they didn't — I'd say the chances (for passage in the Legislature) are close to zero."
        He also said he was sorry the proposal was kept under wraps from the public.
        "In the last two years, we've really made a lot of progress with the community, the fairgrounds and the Downs," he said. "So this is particularly disappointing. We've had a great relationship and hopefully we can get back to that."

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