Quay County Sun - Serving the High Plains

Racing commission holds off on license


December 12, 2018

Ron Warnick

Tom Krumland, center, chats with a fellow Coronado Partners principal as he and principal Warren Frost, right, await word Thursday at the African American Performing Arts Center auditorium in Albuquerque on whether the New Mexico Racing Commission will award a horse-racing license. The commission delayed its decision.

ALBUQUERQUE - The New Mexico Racing Commission said it still wants to award a sixth horse-racing license, but that process unexpectedly was placed on hold Thursday afternoon after one of the applicants in Lordsburg requested a preliminary injunction to stop it.

Commissioners were expected to vote Thursday on which applicant in Tucumcari, Clovis or Lordsburg would receive the coveted license that would lead to a racetrack, a casino and hundreds of jobs. Instead, New Mexico chief deputy attorney general Tania Maestas recommended the commission table any action until legal issues brought up by Lordsburg were resolved. Commissioners unanimously tabled the decision without discussion.

About 80 people, including about a dozen from Quay County, had gathered in the African American Performing Arts Center in Albuquerque to hear the license announcement. The announcement to table the decision brought mostly stunned silence and a smattering of exasperated laughter.

The partners for Hidalgo Downs LLC, applicants for a "racino" in Lordsburg, filed the request for an injunction Nov. 28 in 2nd Judicial District Court in Albuquerque. Hidalgo Downs stated in its filing a feasibility study by Convergence Strategy Group of New Orleans of the five license applicants was "flawed" and "failed to adequately consider the proposals."

Maestas, who helped the commission with awarding previous licenses to Raton and Hobbs, said it would seek an expedited decision on the injunction within 30 days from Judge Carl Butkus.

Maestas explained why the commission delayed its action. "They've worked hard on this, and they don't want it to be tainted," she said. The racing commission had hoped to award a license before the end of the year. That goal was thrown into doubt Thursday, with the possibility of more complications from governor-elect Michelle Lujan Grisham taking office in early January.

Maestas also advised commissioners not to comment until the legal matters are resolved. License applicants weren't bashful about giving their opinions on Thursday's development, however.

Warren Frost, a Logan attorney, after the announcement huddled with his fellow Coronado Partners to discuss strategy. Afterward, he described the Lordsburg group's move as "Hail Mary" and "frivolous."

"We're going to file to intervene in this lawsuit immediately and demonstrate to the judge they should dismiss this," he said. "In my opinion, (the commission) should have voted on it. No one's been damaged yet to form the basis of the lawsuit. If Lordsburg had lost today, they would've had a basis for a suit. They don't have one yet."

Frost said Coronado Partners likely would file a legal briefing, urging a dismissal of the lawsuit, as early as this week.

"We were surprised to learn of this injunction and intend to thoroughly review it," stated Tom Garrity, a spokesman for the proposed $200 million La Posada del Llano in Clovis, adding the group was "disappointed with the delay."

Scott Fisher, one of the principals for Convergence Strategy Group, stated in an email Thursday "it is not prudent for us to publicly comment" on the legal issues brought up by Hidalgo Downs.

The Convergence report criticized the Lordsburg application for being "light on details" and noted its location had "insufficient regional population" compared to other parts of the state. Hidalgo Downs also trailed in many metrics used by Convergence.

In an affidavit filed with the injunction request, Hidalgo Downs principal Denis Floge stated "both my clients and I were shocked, dismayed and perplexed by these findings" in Convergence's report.

"This study appears to be more of a marketing plan in support of Clovis NM locations," Floge stated. "The study also appears to particularly promote the proposed La Posada de Llano project," adding it is "likely to be the least feasible of all projects."

Floge said the feasibility study should have been done by a New Mexico firm because Louisiana-based Convergence principals "do not know or understand the New Mexico market." He also faulted Convergence for not contacting or interviewing any Hidalgo Downs representative and for not attending the commission hearing in Lordsburg.

"Petitioners also note the media has alluded to possible conflicts of interests of some members of the New Mexico Racing Commission and at least one of the propose projects in the Clovis, NM area," the affidavit states.

The Santa Fe New Mexican reported earlier this year commission Chairman Ray Willis owned racehorses with Shaun Hubbard and Johnny Cope – both investors in a proposed Clovis racino. Willis, denying a conflict, said he may have owned horses with Hubbard years ago but no longer does. As for Cope, Willis said "we own part of a horse. I make no decisions on the horse. ... I've been able to rule as a regulator on many, many people who were my friends and my neighbors."

Frost, who acknowledged his own criticisms with Convergence, particularly with its estimates on how much a new racino in Clovis would cannibalize from existing racinos, implied it partly was Hidalgo Downs' fault for its poor showing in the report.

"The didn't present any financial information with their application," he said. "The reality is it won't work in Lordsburg because it's not next to Texas. Arizona has gaming, so it's not going to work there."

Frost said the commission was being "overly cautious" in delaying its decision.

"They're just trying to make sure everything's done right," he said. "We're disappointed, but with all we've been through, this is another tree in the road to step over."


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