Charles D. Brunt
Dec. 01–Santa Fe art dealer and businessman Gerald “Jerry” Peters, who has twice tried to become a partner in New Mexico racinos, has his foot in the door on yet another: the long-stalled La Mesa Racetrack and Casino in Raton.
Peters, a close political ally of Gov. Bill Richardson, said Tuesday he has discussed the possibility of helping Las Vegas, N.M.-based builder Jim Franken develop the partially built Raton racetrack and casino if Franken manages to obtain the necessary racing and gaming licenses from the state.
Franken, the lead contractor on the planned horse racing track and casino owned by Canadian investor Michael Moldenhauer, holds more than $500,000 in liens against the facility. It is supposed to be a $50 million complex, but right now it consists of a partially built temporary casino, basically a tent-like structure on a concrete slab.
Speaking by telephone Tuesday from his art gallery in New York, Peters said he has discussed partnering with Franken, but no deal has been struck.
“Franken discussed this with me, and I said I would not get involved unless he (Franken) had the (racing) license. If he had the license, I would discuss helping him develop a track,” Peters said.
Last week, Moldenhauer’s Albuquerque attorney, Sam Bregman, called for New Mexico Racing Commission Chairwoman Marty Cope, who also sits on the New Mexico Gaming Control Board, to resign both posts.
Bregman claims Cope has a conflict because Franken — a friend of Cope’s — “has partnered with Gerald Peters in an attempt to force the ownership of La Mesa Racetrack to sell its rights in the racetrack to Franken and Peters.”
Cope, whose husband, Johnny Cope, serves on the New Mexico Transportation Commission with Franken, has said no conflict exists.
To operate in New Mexico, racinos must obtain a racing license from the state Racing Commission and a gaming license from the Gaming Control Board.
Although Moldenhauer has held a racing license since January 2008 and a gaming license since June 2009, he has missed a number of deadlines for opening the casino, let alone a functioning racetrack. Citing Moldenahauer’s failure to get the racino up and running, the Gaming Control board revoked his gaming license in May. The revocation has been appealed.
A repeatedly postponed disciplinary hearing on Moldenhauer’s racing license has been pushed back to Dec. 21.
Franken has considerable leverage in the La Mesa racetrack: As of Tuesday, more than $1.2 million in liens — the majority of which apply to Franken’s claims — have been filed against the racino, according to the Colfax County Clerk’s Office.
A lien is one way a contractor can try to ensure payment for work, materials and services. The contractor can release the lien once payment is received or a settlement is reached, but the owner is precluded from selling the property to which the lien is attached. None of the liens has been released.
Peters is an old hand at trying to get into the casino business.
In 2003, Johnny Cope and Peters partnered on a proposal to build a racino in Cope’s hometown of Hobbs. Cope later sold his interest to Peters, saying the project had gotten too expensive.
Peters’ bid to open the Hobbs racino failed: In a three-way competition, it went instead to a group headed by R.D. Hubbard, owner of Ruidoso Downs/Billy the Kid Casino in Ruidoso Downs. Hubbard and fellow investors — including Downs at Albuquerque president Paul Blanchard, another key Richardson ally — sold the $46 million racino two years after it opened to a gaming conglomerate for $200 million.
In 2004, Peters and Jemez Pueblo officials announced plans to build a $55 million offreservation casino in southern Dona Ana County, 300 miles from the pueblo. That plan ran into opposition from federal officials, gaming tribes and Sunland Park Racetrack and Casino, which sits less than 15 miles south of the proposed casino’s site in Anthony.
Moldenhauer has hit snags with another casino proposal.
Moldenhauer was CEO of Baltimore City Entertainment Group LP, an investment group that unsuccessfully sought to build a $212 million slots casino near downtown Baltimore.
In December 2009, the Maryland Slots Commission rejected Moldenhauer’s proposal, saying it was frustrated by his group’s failure to meet deadlines and provide financing information. Moldenhauer is appealing the rejection.
Five companies that were part of the Moldenhauer proposal in Maryland filed suit against him for nearly $1 million in alleged unpaid fees.