Rode charges political deals in Downs at Albuquerque lease

July 12, 2012 • Local News

New Mexico State Fair Commissioner Charlotte Rode, a Republican, has long criticised the awarding of a 25-year lease to the Downs at Albuquerque to operate a racino and construct a casino at the New Mexico State Fairgrounds as being a product of back-door deals between Gov. Susana Martinez’s administration and members of the Downs management. But she is also questioning the Downs as a qualified bidder for the lease.

Rode, who was appointed to the State Fair Commission by Martinez last August, voted against awarding the lease to the Downs.

Rode says the original lease, awarded to Santa Fe racing in 1985, was slanted toward benefitting the State Fair. Now through political connections and the like, she said the lease has evolved to one that benefits the Downs and is a detriment to the State Fair. She cited a 2011 audit of the State Fair conducted by the Legislative Finance Committe as proof of this contention. A paragraph of the executive summary from the LFC audit reads, “The New Mexico State Fair failed to properly manage two contracts: the lease with the Downs at Albuquerque and the carnival [auth] concessions contract. It appears that decisions have been made to benefit the contractors to the financial detriment of the New Mexico State Fair and a lack of strategic planning has led to a rushed request for proposal for a renewed racing lease.”

When Rode first came on as a commissioner, she asked for a fiscal impact report for the lease. She said the request went to the manager and lawyer of the Downs and to Martinez’s Deputy Chief of Staff Ryan Cangiolosi, but was never responded to. “My goal was to try and establish a net revenue for that lease. We were paying a lot for utilities, for maintenance and upkeep, we were providing manpower and equipment … We weren’t actually benefitting $2 million from that lease,” Rode said. “We were getting quite a bit less because of our participation in the property itself in paying for the utilities and things like that.” Even now, Rode said the commissioners were not provided with a fiscal impact report for the new lease.

“All we had were gross revenue numbers and even with gross revenue numbers it was evident that we were going to be receiving less money for the first several years of this contract,” she said. As it stands now, the Downs is to pay $2 million annually for the first three years of the contract. The lease amount has not changed since 2003, Rode said.

Yet with ongoing construction of the estimated $20 million casino, Rode says the Downs is not paying its fair share. “There’s also other considerations especially during the construction process that is going to cost the State Fair additional revenue over and above what they were paying before. Some of the cost of construction is actually being borne by the State Fair,” she said.

As of June, when Rode asked during a commission meeting whether the Downs was still not paying all of utilities, the response was no.

Additionally, she said the Downs has been consistently late on its lease payments and has not paid interest on those late payments.

“When you’re talking about fiscal impact, there’s a huge amount of considerations that were not detailed or discussed or even revealed during the planning process for the RFP, or during the process in which we were voting,” Rode said.

Rode said as a state entity, the commission should look for the highest and best use of the property, and rent it in a way that is a benefit to the State Fair.

“If you owned a home and you had somebody renting your home, you wouldn’t let the renter tell you what the terms were going to be. You wouldn’t let the renter decide when and how they were going to pay, or what you should be able to provide for them. That would be something that you as a homeowner would determine as to what’s in your best interest … If you had a renter for 20 years abuse that lease, then certainly you would look for other renters in the future so that you didn’t have to deal with that abuse,” Rode said.

Rode filed an 18-page complaint to the Office of the State Auditor in reference to the lease on June 28.

Neither Martinez’s office, nor Pat Rogers, an attorney for the Downs, responded to queries made by the Record.

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