SANTA FE STUDIOS: Part 2: Questions remain about Javier Gonzales role.
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In Part 1 of the Watchdog investigation into the development of the Santa Fe Studios the Watchdog promised to look into current Democratic Party Chairperson, Javier Gonzales, and his role in making the nearly $25 million dollar film and media production facility south of Santa Fe a reality.
On the Democratic Party website, under Mr. Gonzales’s bio, it states, “currently, he is leading the effort to bring a state-of-the-art film studio to Santa Fe.”
NOTE TO THE DEMOCRATIC PARTY WEBSITE WEBMASTER:
Time to update Mr. Gonzales’ resume. In an article appearing in the The New Mexican on September 28th, 2011, the reporter points out that Mr. Gonzales was previously a consultant for the Hool Brothers, “but that Mr. Gonzales said recently that he is no longer involved with the project.”
So which is it Mr. Gonzales, Are you in or are you out? Do you have anything to gain personally if the Santa Fe Studios should become a financial success?
WATCHDOG Public records requests.
In financial documents the Watchdog obtained from the EDD (Economic Development Department) and the County of Santa Fe weeks ago, there are no mentions of Mr. Gonzales either on signed papers or in the numerous emails the Watchdog reviewed in the correspondence between the State, the County, and the Hool Brothers.
Yet many questions regarding ownership and the financial involvement of Mr. Gonzales in the Studios remain unanswered. And Mr. Gonzales and the Hool Brothers aren’t providing answers to those questions.
The Watchdog sent Mr. Gonzales an email asking if he would provide a brief chronology of his involvement with the project and if he were still playing any role in the ongoing operations of the Studios. The Watchdog left several voicemails backing up the same request for clarification of Mr. Gonzales’ current association with the Hool Brothers and the Santa Fe Studios.
As of this posting, Mr. Gonzales has not returned requests for comment. The Watchdog doesn’t take this brush off personally as both The New Mexican and the Journal have had trouble getting Gonzales or the Hool Brothers to return media inquiries.
Typically, media inquiries to the Santa Fe Studios are referred to the Director of Operations, Mark Walter, who says any financial questions (which the Watchdog has plenty) must be answered by Jason Hool (Lance’s son) who is the president of the Studios. His phone number is a Southern California area code and of course Watchdog voice messages get the one-way boomerang treatment: never to return.
Gonzales served as a Santa Fe County Commissioner from 1994 to 2002.
In an article appearing in the Journal in late 2009, Gonzales was described as “a minority owner and spokesperson for Santa Fe Studios.”
In the same article, Gonzales said the Hools invited him into the project in 2007 as a “consultant” to help them navigate the rocky shoals of securing public financing for a private development as big as the Santa Fe Studios – which involve the State (through a Local Economic Development Grant) and the County of Santa Fe through a guaranteed loan, a land transfer mortgage loan, and infrastructure costs.
Gonzales does have a background as a consultant, having worked four years with the worldwide consulting firm Accenture.
But perhaps more valuable to the Hool Brothers at that time was Gonzales’ family connections and longtime association with Santa Fe County politics.
Gonzales, son of a former Santa Fe mayor and elected twice to the County Commission, was also appointed by then-Gov Bill Richardson to the board of regents of New Mexico Highlands University and, currently, New Mexico State University.
The financial components of the deal.
Originally, the Hool Brothers’ business plan called for getting much more private investors to participate in financing the Studios. Then the 2008 financial meltdown had private investors disappearing faster than Enron stock.
The final finance package ended up a lot different than what Gonzales at the time called a “public-private co-investment dream deal.”
The Hool Brothers investment is minimal compared to the amount of public funds that financed the Studios’ construction.
As cited in Part 1 of our investigation the people of New Mexico have a lot more skin in the game than the Hool Brothers:
• $10 million state grant from the EDD which only gets paid back if the Hools are successful in creating the jobs they’ve promised in their business plan
• $6.5 million loan from the Los Alamos National Bank to the Hool Brothers to drawdown as needed – a loan that has been guaranteed by the County of Santa Fe
• $3.6 million in upfront infrastructure costs paid for by Santa Fe County
• $2.6 million of appraised land consisting of 65 acres off of Highway 14 that was purchased by the County from the State Land Office and deeded to the Hool Brothers to build the Studios and media complex
Gonzales may or may not be gone from the deal, but the payback schedules aren’t.
The Watchdog’s next installment takes a look at the contractual obligations and payback schedules upon which the Hool Brothers must deliver.
Spoiler Alert: If you think the Project Participation Agreement (which is the controlling legal agreement between the State, County, and the Hool Brothers) is written in favor of the taxpayers of New Mexico, think again.