July 31, 2011 at 10:56 PM
"Want to operate a horse race track and casino in the middle of New Mexico’s largest city?"
Want to operate a horse race track and casino in the middle of New Mexico’s largest city? Then you better hurry and get your proposal submitted.
The New Mexico State Fair (NMSF) has issued a “request for proposals”, or RFP, for 93 acres of prime real estate located on the fairgrounds located at Central Avenue and Louisiana Boulevard in Albuquerque, NM. The RFP was issued in late July with all proposals due on August 25, 2011.
The property would include the racetrack, the grandstand and 1500 horse stalls. The successful bidder will get a whopping 25 year lease and must guarantee the NMSF a minimum of $2 million per year. The NMSF, which is also called “Expo New Mexico,” is a State of New Mexico enterprise agency, meaning it must generate its own dollars.
Pari mutual horseracing paid the bills at the NMSF for many years and eventually the task was turned over to private enterprise. With new laws allowing for a slot machine operation, the horse racing-casino combinations, or racino, proved beneficial to both operator and the NMSF.
Paul Blanchard has been operating the Downs at Albuquerque for years. In 2010 the Downs generated $26.7 in revenues, most of it from the 300 slot machine casino operation ($17.5 million from casino; $8.2 million from horse racing; $1.2 million from food and beverage). Of that $2.2 million went to the NMSF. But Blanchard, who was a major supporter of former Governor Bill Richardson, knew Richardson’s term would be over and his lease would be up and applied for a license to build and operate a racino in Moriarty. The New Mexico Racing Commission awarded him the license but the project never materialized.
Then in late 2010 news reports surfaced that the Richardson-appointed NMSF management and board members were on the verge of a new 40 years lease. There was a public outcry and the NMSF commission took no action. Now it is in the hands of the Susana Martinez administration and they will decide who gets the 25 year lease.
The RFP allows for a non-gaming proposal for the use of the 93 acres, and there may be some businesses out there that could generate big money, but if I were a betting man, I’d bet that the successful bidder will be for a gaming operation.
The short 30-day window from the time the RFP was issued to the submission date is surprising considering the breadth of the project. This favors the current operator, although I’m sure there are other suitors who have been involved.
Look for the successful bidder to over more than $2 million a year and provide for capital improvement projects or other incentives to sweeten the pot. With a lease that expires around 2038, it shouldn’t be too hard to spread out the costs.