Despite a last-minute challenge, the New Jersey Sports and Exposition Authority (NJSEA) ruled last week that the New Jersey Thoroughbred Horsemen’s Association (NJTHA) will remain as lessee for Monmouth Park in Oceanport.
During an April 19 board meeting, the NJSEA accepted the recommendation of NJSEA interim President and CEO Mark Stefanacci to reject Florida racetrack owner John Brunetti’s challenge to the award of the park’s lease to the horsemen based on several counts, including that Brunetti did not participate in the rebidding process after an initial lease agreement fell through.
Stefanacci recommended the NJSEA let stand a 35-year lease agreement with the NJTHA, which gives the group rights to offtrack wagering facilities and development of the racetrack as a venue for other events.
John Forbes, president of the NJTHA, was critical of Brunetti’s last-ditch effort to gain control of the racetrack, during a Monday interview. “We think that it is pretty clear that the horsemen did everything correctly, the sports authority did everything correctly,” he said. “That being said, Mr. Brunetti’s protest is typical of the way Mr. Brunetti does business.
“It’s disgraceful and it is absolutely without merit,” he added.
“We decided enough is enough, the gloves are off,” he continued. “He is a spoiler, obstructionist trouble maker and it’s a shame because he is threatening an industry.” The NJSEA ruling solidifies the 35-year lease for the park awarded to the NJTHA in March after a previous lease deal with developer Morris Bailey fell apart in 2011.
However, on March 28, Paul Josephson, of Hill Wallack, Princeton, who is representing Brunetti, submitted a letter of protest to the NJSEA disputing the bid award to the horsemen.
The notice of protest filed on behalf of Hialeah Inc. claims the lease violated the original terms of the bid by including a state subsidy for purses and reducing the race dates from 141 days to 71 days and was fundamentally different from the agreement with Bailey.
A hearing was held on April 16, with Stefanacci serving as the hearing officer.
Forbes criticized the timing of Brunetti’s complaint.
“He had an opportunity to bid on this; he declined,” he said. “He changed his mind, and in order to get back into the deal, he started making all these wild accusations so that he could reinsert himself.
“He waited until everybody else did the work.”
While Josephson could not be reached for comment, Forbes said he would not be surprised if Brunetti appeals the NJSEA ruling.
“My advice is he should go ahead in the appellate court and let them look at this,” he said.
According to Sen. Jennifer Beck (R-11th District), if an appeal is filed, it wouldn’t have an impact on the 2012 racing season.
“My guess is the courts are going to want to see Monmouth Park functioning,” she said. “The debate is going to be whether or not the bid process was followed properly and awarded properly.
“When you lose a season, you lose the momentum. You lose the people that follow horse racing that will go to other venues; you will lose your customer base.”
Beck, who has been involved in the effort to keep Monmouth Park in operation, went on to say the NJSEA ruling was expected.
“I know it wasn’t a certainty, but I kind of suspected that was the way it would go,” Beck said. “There wasn’t anything about the process, in my eyes, that was missing.
“He was given a fair shot and chose not to file an application to take over Monmouth Park,” she added. “It is just sort of odd that he came back months later and argued that he should have the right to bid.”
According to Stefanacci’s recommendation, all original bidders were asked to submit detailed financial information, a proposed plan for operation of the track, and disclosure of both rent payments and political contributions.
However, Stefanacci stated in his findings that Brunetti failed to submit financial information; proposed that the state pay for losses incurred; and failed to provide a plan for off-site wagering sites in the original 2011 bid.
Also, according to Stefanacci, Brunetti is barred under the state’s pay-to-play laws from the lease award because of political contributions in both Middlesex and Camden counties.
“ELEC contribution reports show numerous contributions, generally to county political party committees, from John Brunetti and entities controlled by John Brunetti that bar the Brunetti applicant from entering into the lease with the
NJSEA,” Stefanacci’s letter states.
However, he found that the NJTHA was not barred from making contributions due to its status as a nonprofit entity.
Stefanacci also said the NJSEA is given by law “broad discretion in making its determination as to whether a bid is most advantageous.”
Stefanacci said
Brunetti’s original bid was not the most advantageous, and Hialeah declined interest in continuing the RFP process once Bailey withdrew.
“Neither the Brunetti organization nor Hialeah challenged this decision by the NJSEA, nor did they, prior to March 28, 2012, challenge the NJTHA’s participation in this process, notwithstanding having actual knowledge of the NJTHA’s participation for more than a year,” Stefanacci states.
According to the recommendation, Brunetti expressed initial interest in operating the track in January, but in a Feb. 1 letter he “declined participating in continuing the process.”
Because he did not immediately object to the RFP, Brunetti was disqualified from future objection.
“To the extent that Hialeah is challenging the RFP, it is precluded from doing so because the Brunetti organization submitted a proposal in response to the RFP and did not object to the RFP at the time,” Stefanacci said.
Stefanacci also said that any lessees had the option to run 141 racing days or negotiate the number down, and negotiate other aspects of the lease.
Brunetti also challenged the involvement of the former chairman of the New Jersey Racing Commission, Dennis Drazin.
The complaint filed on behalf of Brunetti claims that Drazin, who is slated to serve as a track consultant, should have recused himself from the negotiations due to his previous position.
In a letter made public last week, Drazin said the process was carried out correctly.
“The horsemen submitted a proper responsive bid,” he said. “Brunetti declined to bid and even when he later changed his mind, failed to ever submit a proposal.
“On the merits of the proposals, the NJSEA had every right to choose the horsemen who have a valid interest in preserving live racing in New Jersey as opposed to a racetrack operator from Florida.”
According to Drazin’s letter, Brunetti protested the sale of Monmouth Park in 1985 and has a history of litigation.
“He protested the sale of Monmouth to the state in 1985,” he said. “He protested the DelMar racetrack lease in California.
“He has a long history of disputes, litigation and controversy with horsemen and other racetracks,” he added.
Drazin also questioned Brunetti’s motivation for wanting to take over the track.
“Monmouth is scheduled to lose $8 million this year and most likely will continue to do so until [off-track wagering] sites are built out under the operator’s business plan and state law,” he said. “The failure to build out this system to provide revenue has been the near-fatal blow to the industry.
“The Hialeah plan didn’t even offer to build out the OTW system as required,” he added.
Beck said she is relieved to be able to focus on the opening of racing season.
“I am really happy because that means we can focus on opening day and really look into making Monmouth Park a special venue for horse racing in the tradition that we’ve always known it,” she said.
“Nothing is going to get in the way of May 12 being opening day at Monmouth Park,” said Beck, adding that she will be in attendance.
After the NJTHA was awarded the Monmouth Park lease, Drazin said future plans for the racetrack call for amenities including a hotel, restaurants, indoor water park and miniature golf course to make the 327-acre park an entertainment venue for families and non-racing fans.