Monday, November 21, 2011
Will Barela Real Estate Woes Keep Him Sidelined? State Econ Boss Mired In Lawsuit Mess, Plus: Another Mess: Susana & The Dicey Dealing On Downs At ABQ
Barela & ABQ property
Republicans already seeking the ABQ GOP congressional nomination are on pins and needles to see if Jon Barela, the 2010 nominee and current economic development secretary-designate, will join the race and cut them off at the pass. Speculation that he is getting in has already dried up money for Dan Lewis and Janice Arnold-Jones. Retired Army Veteran Gary Smith is largely financing his own effort. But Barela, if he gets in, could face a more difficult path than two years ago when he narrowly lost to Dem Martin Heinrich. One of our longtime Alligators is on the case and says Barela has major financial issues that could keep him on the bench or--if he gets off--create a firestorm of criticism. Here's his report:
Barela, along with a small group of investors, is being sued in State District Court on behalf of the now-defunct Charter Bank for approximately $3.5 million dollars. The suit (CV 2010-06377) can be searched for here and centers on a failed development at the corner of Tramway and Montgomery in Albuquerque’s far Northeast Heights that had been called Villa Loma Estates (the advertised website has been taken down but the architect’s depiction is available here.)
Charter alleges two different promissory notes are in default, that the contract between Charter and the Barela group is in breach and is moving to foreclose on the property and collect financial damages. Charter was a locally-owned and operated bank that was closed by the Office of Thrift Supervision in early 2010 and put into receivership with the FDIC.
Bad loans. Failed banks. Development deal gone sour. None of this bodes well politically for Barela and the legal landscape isn’t much better.
On October 14, 2011 District Court Judge Alan Malott rejected Barela’s request that the case be dismissed, ruling that “the loans, notes, mortgages and guarantees are not otherwise disputed, nor the fact that they are in default.”
Barela’s woes could potentially benefit both sides of the aisle. Democrats now have a high-profile target they can point to as the Governor and the state GOP talk about the importance of jobs and the economy. If the Governor’s own head of Economic Development can’t manage a development himself, what’s he going to do for the rest of the state? And it goes without saying that already announced GOP candidates Dan Lewis, Janice Arnold-Jones and Gary Smith have got to be feeling that Barela’s “To be or not to be” ambivalence toward another bid for Congress is now leaning toward “not to be."
Of course, Barela may have an explanation that resonates with voters. He could argue no one understands tough economic times and a plunging real estate market than someone who is dealing with it first-hand.
The difficulty is, outside of court filings Barela has never talked publicly about this development or this lawsuit before. He may be talking about development in far different terms than he would like to in the days and weeks to come...
A number of heavy-hitting R's here and in Washington still like Barela for the US House nomination, especially so because they believe his presence on the ABQ area ballot could boost Hispanic support for Heather Wilson who they see as the likely GOP nominee for the open US Senate seat. But these new developments certainly add a wrinkle to that analysis. Meanwhile, the Democrats are sitting back and taking all of this in, waiting to serve Barela with a political subpoena if he decides he can raft these wild waters.
DIRTY DEALING AT DOWNS?
A Senior Alligator has a simple summation of the questionable activities going on over the awarding of a new racino and a 25 year lease to the Downs at ABQ at the NM Expo. He notes this newspaper report and wonders: "Problems ahead?" First, the news:
As chairman of the State Fair Commission from 1997 through 2002, Albuquerque businessman Tom Tinnin was passionate about the fair. Tinnin apparently hasn’t lost that fire. Upset with the Martinez administration’s handling of a new lease for the racetrack and casino at the state fairgrounds, Tinnin resigned his seat on the state Board of Finance. The resignation is just the latest fallout from the administration’s troubled attempt to award a new lease, and Tinnin’s resignation is further damage to the credibility of the process.
Governor Martinez decried "pay to play" during her campaign. The dicey Downs deal is now raising that question on her watch. Some of the players:
GOP National Committeeman and Republican attorney Pat Rogers is now representing the Downs. Former ABQ Public Safety Director and GOP Bernalillo County Sheriff Darren White landed a consulting agreement with the Downs when he was forced to resign from the city. He cut campaign commercials for Martinez. Dan Mourning, a former ABQ restaurant manger and close friend of White's, manages the state fairgrounds upon which the Downs is located.
And, as always, lurking in the background and connected to all the players is Jay McCleskey, the Guv's powerful political consultant as well as Republican activist and attorney Mickey Barnett. In addition, the three members of the panel appointed to evaluate proposals for a new racino at the Fairgrounds and a 25 year lease are all tapped in Republicans:
Gov. Martinez appointed three people to evaluate the confidential proposals and make a recommendation to fair general manager Mourning, a Martinez appointee... The three appointees are Chuck Gara, director of the Property Control Division of the state General Services Department; John A. Garcia, director of the city of Albuquerque’s Economic Development Department; and Garrett Hennessy, former intergovernmental affairs liaison for Mayor Richard Berry....
Top sources say there was a move to have a larger panel evaluate the proposals that would have included members not so tightly connected with the administration, but it didn't happen.
Laguna Development corporation--which runs an Indian casino--was the only other bidder to build a new racino, but the request for proposals was only out there for a month. The three member panel recommended to the fair commission that the Downs get the deal.
The extremely tight timeline for putting in a proposal to build a racino served to exclude bidders, especially for those from out of state, say sources following the action. That's where the concern about the deal being wired for the Downs comes in.
RED FLAGS FOR GUV
All of this and more has given Tom Tinnin pause. He's a highly respected businessman and longtime player in the state GOP whose name has often been floated as a possible party chair. And the State Fair Commission--all of whom are not Martinez appointments--are worried enough that they have delayed until December a final decision on giving the Downs permission to replace the current dilapidated racino.
Tinnin's resignation and the trepidation over this deal at the commission are major red flags for this new Governor who may be unaware of the long ties among the players involved. This deal signals the return of what we've often referred to over the years as the lobbying/consulting wing of the GOP that has warred with other factions. It started when the GOP lobbyists-consultants committed heresy by joining with GOP Governor Gary Johnson in supporting the legalization of drugs and picking up lucrative contracts as a result. That wing still operates, as illustrated by the machinations over this racino. It's more evidence that this new Governor needs to grab the reins and call on competing political and legal advice to keep her on the straight and narrow. In other words, what does Tom Tinnin know that this Governor should know?
From Santa Fe, the Legislative Council Service has news for you redistricting junkies:
Maps and data for most of redistricting plans offered in the litigation are now available here. Maps and data for the remaining plans will be posted as soon as they are available.
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