LV bidders lose out on N.M. track, casino

Pete Herrera

Thursday, Nov. 20, 2003 | 10:25 a.m.

ALBUQUERQUE -- The state Racing Commission on Wednesday picked Ruidoso Downs owner R.D. Hubbard and his partnership to build and operate a new horse racetrack and casino at Hobbs.

"There's going to be a diamond in the desert created by this process," said Commission Chairman Jack Cole, quoting a comment made by Commissioner Arnold Rael during the commission's last visit to the southeastern New Mexico city.

The commission conducted two days of hearings last week to give the four applicants a chance to present their proposals for the track and casino.

The bidders: Hubbard, bidding under Zia Park Partners; Santa Fe art dealer Gerald Peters, under a partnership known as Hobbs Downs; Ken Newton, former owner of The Downs at Santa Fe, whose SaddleBrook Park partnership included the owners of the Riviera hotel-casino in Las Vegas; and Las Vegas businessman Shawn Scott, who proposed a track complex under the name Lea Downs.

One of Hubbard's partners, Paul Blanchard, and Peters are considered close friends of Gov. Bill Richardson and both contributed thousands of dollars to Richardson's political campaign. Richardson had said the commission's actions would not be influenced by personal or political ties and he reiterated that Wednesday.

"Personal, political and financial relationships were not a factor in the decision making process," Richardson said in a statement issued by his office. "The Racing Commission, not my office or me, made the final decision."

During his campaign, Richardson promised residents of Hobbs and Lea County he would support their efforts to get a new track.

"This action means millions of dollars in new economic activity for eastern New Mexico and hundreds of new jobs for the people of Lea County," Richardson said Wednesday.

The license was granted conditionally, which means the Zia partners must be able to obtain a gaming license from the state Gaming Control Board and must fulfill the promises they made in the winning proposal as well as meet any other requirements imposed by the Racing Commission.

"The big winners are the citizens of New Mexico, the city of Hobbs and Lea County, and of course, the New Mexico horsemen," Cole said.

Hubbard and his partners at Ruidoso Downs argued during their presentation last week that they should be awarded the contract -- or the existing Ruidoso Downs and surrounding Lincoln County would suffer. They said having both tracks would benefit both Lea and Lincoln counties.

Hubbard said Wednesday there are a lot of benefits to having Ruidoso Downs and the new track under the same ownership and management.

"It would have been a disaster to have a third party running against us," he said. "Now we can work on racing days and cross promotions."

The partnership hopes to have a casino in operation as early as November 2004 and plans to run a 53-day live race meet starting in October 2005.

The Hubbard group also said its background in racing gave it an edge.

"The main thing was we are horse people and we convinced them of that," Hubbard said after the commission's decision. "We didn't just come in and want to build a casino. I've been involved in racing in New Mexico for 40 years."

The chairman of the New Mexico Horsemen's Association, Eddie Fowler of Ruidoso, said he was elated with the commission's decision.

"Hubbard is the best thing that's happened to racing in New Mexico," Fowler said.

Cole commended the work of all four applicants.

"What a mountain of work, what a mountain of money and effort went into this," Cole said. "All of the applications had a lot of merit."

Racing Commissioner Ken Corazza said before voting for Hubbard's group that the commission had received 51 letters of recommendation for Hubbard "from the elite of thoroughbred racing."

He also said he was impressed that Hubbard had contributed $11 million to charities and projects in the Ruidoso area since his purchase of Ruidoso Downs.

"Hobbs will be very pleased with the partnership you are creating with them," he said.

With the Hobbs license, Hubbard will be majority owner of two of the state's five racetracks, and by teaming up on the Hobbs track with Blanchard, owner of The Downs at Albuquerque, the pair will control three of the state's tracks.

Three of the four Hobbs applicants were present, with only Scott missing. In a preview to how the announcement would go, the Hubbard partnership and its supporters took up two of the front rows. Newton and his partner from the Riviera Hotel and Casino, Ron Johnson, sat near the back of the room, and Peters stood against the back wall with some of his supporters.

The commission voted 3-1 to award the license to Zia Park, with Commissioners David "Hossie" Sanchez, Rael and Corazza voting for it and Commissioner Al Lucero voting against it. Cole did not vote because the chairman votes only in case of a tie.

Peters left the meeting moments after the decision was announced and declined to comment.

Newton's only comment was that he was disappointed.

Earlier this year, the commission expressed concern about possible lawsuits from the unsuccessful applicants.

Cole said Wednesday the commission was "comfortable" with its decision, adding, "We're thoroughly at ease that the process was done correctly."

In Las Vegas, Riviera Holdings Corp. said it will write off its $1.3 million investment in the New Mexico track bid and take a charge against earnings of 37 cents per share in the fourth quarter ended Dec. 31.