Posts Tagged ‘city of hialeah’

By Ray Paulick
Thoroughbred owner and Internet entrepreneur Halsey Minor showed he isn’t willing to take “no” for an answer from John Brunetti in his efforts to revitalize South Florida’s dormant Hialeah Park, claiming in a lawsuit filed Monday against Brunetti and the city of Hialeah that Brunetti is not the rightful owner of the historic racetrack.

Click here for a copy of the lawsuit, which was filed in Circuit Court of the 11th Judicial Circuit for Miami-Dade County.

The complaint, filed by Minor and Save Hialeah Racing Inc., a Florida not-for-profit corporation that Minor said includes Hialeah residents and members of South Florida preservation groups, is seeking to nullify the 2004 property deed transfer from the city to Brunetti. The suit claims the city had no lawful authority to transfer ownership because Brunetti failed on several counts to live up to terms of the lease-with-an-option-to-buy agreement and that residents of Hialeah were never given an opportunity to vote on the property transfer in a city charter-mandated referendum.

Minor was rebuffed after first approaching Brunetti last summer with a proposal to purchase and restore the track to its former condition as the “grand dame” of South Florida racing. Brunetti had operated the track since 1977, when a Brunetti company, Hialeah Inc., and the city of Hialeah entered into a lease-purchase agreement. The agreement, the suit claims, required Hialeah Inc. to offer live Thoroughbred racing, hold a pari-mutuel permit from the state, and “maintain the property and to make all repairs necessary to keep the property, buildings, fixtures, and improvements in the same condition as on the day the least agreement was signed.”

Hialeah has not run a live race since May 22, 2001, after which it lost its pari-mutuel permit, and its stable area has been torn down. Significant damage occurred when Hurricane Wilma hit Florida in 2005. The suit does not address who would be entitled to any of the insurance claims Hialeah Inc., or an affiliated real estate company, Bal Bay Realty, may have received following Wilma.

Minor, who has residences in Virginia and (like Brunetti) California, is president of Save Hialeah Inc., which a press release said was formed to “educate the public regarding the value of continued Thoroughbred horse racing in South Florida.” Restoration of the track and resumption of live Thoroughbred racing will be to the “benefit of the citizens of Hialeah and the rest of Florida, as well as the millions of annual visitors to Florida," the press release states.

Hialeah Park is listed on the National Register of Historic Places, and in 2007 the National Trust for Historic Preservation listed Hialeah Park as one of the 11 most endangered historic places in the United States.

Included in the suit is a claim the charter for the city of Hialeah “provides that the city shall not give, donate, sell or otherwise dispose of city real property, parks or recreational areas without approval of the electorate in a referendum held at a general or special municipal election.”

No referendum was held when the city transferred the deed to Brunetti’s company in 2004, which the suit claims occurred after Brunetti’s company “ in 2002, made clear, that it intended to abandon thoroughbred racing and undertake residential development on the property.”

Questions about the city’s role in deeding Hialeah Park to Brunetti’s company were first raised in an article in the Paulick Report last October, which discussed, among things, Brunetti’s relationship with city officials.

By Ray Paulick

While the racing industry has been a clear loser in the demise of South Florida’s Hialeah Park, the city of Hialeah may have been dealt the greatest setback after the dormant track held its last race on May 22, 2001. It turns out, however, that city officials may be in part to blame for Hialeah’s current plight.

Hialeah is a proud city, and for much of its history the civic pride of the heavily Hispanic populace has centered on Hialeah Park. The fifth-largest city in Florida with a current population of 250,000, Hialeah has lost jobs and tax revenue due to the track’s closing. But there are intangibles that can’t be measured in dollars and cents.

“It’s been said and I believe it to be very true that Hialeah Park is the very soul of Hialeah,” said Alex Fuentes, who has led the Save Hialeah Park grass roots effort to bring Thoroughbred racing back to the place many refer to as the “grand dame” of the sport. “The track was the catalyst for the beginning of the city. The park was operational before the city was incorporated. It’s the coffee table the entire city was built around. Even the high school mascot is a Thoroughbred. Everything here had to do with the racetrack.”

It’s not widely known that the city actually held the deed to the track property and leased it to Brunetti throughout the years he operated Hialeah. A pass through lease-purchase agreement had the same terms as the mortgage, according to a source.

The 201-acre track had been owned by John Galbreath, the late sportsman who owned Darby Dan Farm and major league baseball’s Pittsburgh Pirates. Galbreath paid roughly $21.5 million to buy the track from the estate of Eugene Mori in 1972, but wasn’t able to operate at a profit, reportedly losing several million dollars before trying to sell Hialeah’s pari-mutuel license and racing dates to Gulfstream Park in 1974.

That deal failed to go through, and Brunetti stepped in and arranged to buy the track in 1976 for a reported $13.3 million. It was termed a “complicated deal” by Audax Minor, who wrote a regular column called “The Race Track” for The New Yorker magazine. (For more on Audax Minor, whose real name is George F.T. Ryall, see this article in the Mid-Atlantic Thoroughbred.)

Minor reported the city of Hialeah paid $9 million, with Brunetti paying the remaining $4.3 million to acquire the racetrack. Before the deal was done, Bill McCollum, Florida’s attorney general wrote an opinion giving the city the right to purchase the track. Some of the terms of the agreement between the city and Brunetti were disclosed in McCollum’s opinion (which said the seller would receive only, $12.3 million, not the $13.4 million reported in The New Yorker). He wrote: “The terms of the agreement provide, among other things, that during the life of the agreement, the track will be used as a Thoroughbred racing facility and for other municipal-public ‘recreational and educational purposes.’”

At the end of the 30 years, provided he lived up to the terms of the agreement and kept up with his monthly payments to the city, Brunetti would be able to purchase Hialeah Park for a nominal fee of $100. However, sources have told the Paulick Report that other conditions of the agreement required Brunetti to maintain a pari-mutuel license permit.

Hialeah Park stopped operating as a racetrack in 2001 and Brunetti lost his pari-mutuel license in 2003. Yet the city of Hialeah handed him the deed to the track in late 2004 or early 2005 at the end of the lease agreement.

The relationship between Hialeah city officials and Brunetti can be called “cozy,” at the very least. For many years, a man named Esteban Bovo, who was a member of the city council and eventually council president, worked for Brunetti as his “asset manager.” Bovo recused himself on any council votes related to the racetrack.

The longtime mayor of Hialeah, Raul Martinez (whose 1991 racketeering and fraud conviction was appealed and defeated in a second trial), was a member of a Hialeah Park “advisory board” and said to be extremely close to Brunetti. (Martinez is currently running for Congress). It’s believed that it was near the end of Martinez’s 24-year run as mayor in 2005 that the deed was transferred to Brunetti, despite the terms of the agreement apparently not being met.

The current Hialeah mayor, Julio Robaina, is subject to term limits, which restrict him to two four-year terms in office. He is up for reelection this year and thought to be very motivated to bring racing back to Hialeah Park as part of his legacy. Halsey Minor, the Internet entrepreneur whose interest in buying Hialeah Park has so far been rebuffed by Brunetti, has met with Mayor Robaina on at least one occasion.

One option Robaina may want to explore, considering Brunetti’s intransigence to sell, is eminent domain – a government entity taking over private property for public use. That may not be a popular concept in a town populated with exiled Cubans, many of whom had their personal property seized by the government of Fidel Castro, but there may not be many other options. Brunetti seems stuck on a price that far exceeds the appraised value of the property as a racetrack, and commercial development does not seem to be a near-term option for Hialeah Park.

It is in the city’s best fidicuary interests to have Hialeah Park operating as a racetrack again. It will create jobs and tax revenues and help the local economy. By forcing the sale of the track to the city, Hialeah could reclaim the land it once owned and lease the track under a long-term agreement to someone like Halsey Minor, who wants to restore the track to its former glory.

The city owned and leased the property before; why not do it again?

“An economist can measure what this has cost us,” Alex Fuentes said of the loss of Hialeah Park as an operating racetrack. “But the city has lost a lot of pride and sense of place and respect. There is no other city like Hialeah. The people here have lost a sense of their own identity.”