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Who Exactly Is Deluded?

By Greg L | 24 February 2007 | Rack & Roll Scandal | 9 Comments

Today’s rather amusing Manassas Journal-Messenger article on the Rack & Roll scandal tiptoes towards the question of the degree to which referenda in 1996 and 2004 on whether to allow Colonial Downs to operate an off-track betting facility in Manassas Park might figure into this strange tale. Predictably, a host of public officials assert that this a bizarre fantasy, just as they asserted that the consistent pattern of well-documented official abuse directed at Dave Ruttenberg is simply a case of the consequences of Dave’s business decisions, somehow. I’ve dug into this story enough to understand just how desperate a smokescreen this all really is, and now that public officials are on record on this question, it’s time to confront these outrageous statements.

During the first referendum Colonial Downs clearly didn’t understand Manassas Park or have a lot of good contacts in the city. Their plan at the time seems to have been to locate their facility at “parcel O”, near where the Town Center project is currently being developed and the current site of Yappie Cuttery, a small location sure to create a firestorm from adjacent homeowners, one which would require a rezoning, has no through-traffic, and which would require significant road upgrades in order to deal with the traffic that would be generated. Dave Ruttenberg had a better idea, to use the Manassas Park Shopping Center. It works much better as a location, would be a by-right zoning, and already has the road infrastructure in place. Colonial Downs thought so much of the assistance Dave Ruttenberg and a few other businessmen could bring, they agreed to sign a deal (pdf file) to secure that help in return for over five million dollars, which would be executed as soon as the referendum passed. That put Dave Ruttenberg in the driver’s seat for the biggest commercial real estate redevlopment project Manassas Park had ever seen, provided the referendum was successful.

But that referendum failed, and by only 74 votes. In 2003 Colonial Downs came back for another try, which was only announced a month after the raid at Rack & Roll. This time the local establishment had figured out what a bonanza this could be for them, and went in for their piece of the action. Councilmember Noreen Slater’s son gets a job lobbying on behalf of the referendum. The owner of the incongruously-named “Fat Punks”, who is now on the city council, obtained the food & beverage contract agreement for the facility. There’s more here, which I’ll talk about soon. And then there’s the land deals.

As I’ve related before, the public was told that the betting facility would replace the Capitol Furniture store. The real plan was to demolish the entire shopping center and the adjoining properties on Scott Drive and create a mammoth gambling operation complete with a parking garage, entertainment, restaurants, and whatever gambling operations that Colonial Downs could manage to wrangle. The president of Colonial Downs is on tape admitting to this (listen), and a former planning commissioner for Manassas Park described to me in an interview how he saw the plans. What the voters were told was not what Colonial Downs was planning, and what some city officials were hoping for.

Chief John Evan’s nephew Gary is on record saying that Chief Evans stood to make a lot of money from land deals in Manassas Park sometime before the 2004 referendum. We only have his word on this, as documentation such as the blueprints that were seen in the planning office have mysteriously disappeared and much of the paper trail that should appear in the public record somehow isn’t there. The documentation we do have are generally private agreements between individuals, which relies on them being leaked by insiders. Some of that may be forthcoming in the future, and I am following up several leads which I hope to develop into substantive posts in the near future.

Then there’s “clause fifty one” which had been quietly inserted into the leases of many of the tenants at the Manassas Park Shopping Center, except for the one paying enough attention to have noticed it. Clause fifty one (pdf file) says that if a gambling referendum passes in Manassas Park, the tenant has 90 days to vacate. Not that they may be requested to leave, but that they pack their stuff and get the heck out. If this had only been on the lease for Capitol Furniture, this would have been consistent with the public story. To have this in all of the long-term leases at the property pretty much confirms that whoever was telling the story about this just being a tenant replacement at the furniture store location was deliberately lying to the voters.

Then there’s this curious SEC filing by Jacob’s Entertainment, the legal entity which would operate the betting facility, from 10-K Exhibit 10.7, filed on 3/29/2004:

Page 20-21, of the “Standard Horeman’s Contract”:

E. Efforts in Northern Virginia. Because the parties agree on the importance to Virginia racing of a Northern Virginia [sattelite wagering facility] SWF, they further agree to undertake the following, in consultation with the MVRC and its parent, the Maryland Jockey Club:

(1) Political advance work with local government officials and business leaders in Northern Virginia;

(2) Interest polling in Northern Virginia;

(3) Periodic meetings between the principals of Colonial Downs and MVRC and their respective staffs to discuss and consider the feasibility of referenda and SWF construction in Northern Virginia; and

(4) Not later than January 1, 2004, presenting to the Board of Directors of the VHHA a report by the principals of Colonial Downs and MVRC setting forth the feasibility and cost of referenda and SWF construction in Northern Virginia, including handle estimates for all SWF sites considered by Colonial Downs and MVRC. Such report shall give due consideration to providing meaningful information to the VHHA without jeopardizing the chances for success by premature disclosure of strategic non-public information. (emphasis added)

I suppose there are a number of ways this could be read, but it comes across to me that there was a substantial amount of “strategic non-public information” involved here which, if it became public, would have seriously harmed the chances of the referendum being approved by the voters. Now I think we have an idea about what that information might have been — that the proposed facility was a complete hoax, and the real intent here was to build Northern Virginia’s little Reno. I’ve looked through some other contracts of this type that have been filed, and I can’t seem to find any of them with a clause like this in them. It’s about as unusual as “clause 51″ is in a lease agreement as far as I can tell.

The statements by public officials in the article are entirely devoid of any documented evidence, and in many cases are entirely irrelevant to the issues discussed. Instead they casually dismiss the evidence in hopes that the voters will be dumb enough to accept their contention that the documented harassment, secret agreements, and deliberate misstatements of the truth in support of a gambling referendum never occurred. If voters swallow this whopper, democracy in Manassas Park is truly in grave danger. I’ll give them more credit than this, and am pretty sure they’ll realize who really is suffering from delusion in Manassas Park. It’s the one’s whose names have been appearing on the ballot for so long.

Coming up next: Which city officials were secretly consulting for Colonial Downs in 2004?. Stay tuned.

(Read Part 2)

UPDATE: audio link fixed.



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9 Comments

  1. 1200 miles from Manassas said on 25 Feb 2007 at 9:00 am:
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    Thank god for Google Alerts.
    I have one on Manassas, where I grew up and then left 25 years ago with another Manassas boy to a place far far away from the rednecks of Virginia.
    Glad we don’t live there anymore. Visits are bad enough.
    Thank you BVBL for your website and all the juicy news from Manassas.
    Seems like the more things change, the more they stay the same!
    I eagerly look forward to the blog and the MJM everyday.
    ya know, when we lived there, we called it “Prince Nazi County”
    instead of William and it seems like it is still the same.
    I plan on going into the Rack & Roll, not to be confused with the Wok & Roll, next month when we come into town for a visit again, even if it is just to be on the cam outside and see what I can see inside, maybe even shoot some pool.
    Keep up the good work BVBL, I appreciate it very much & look forward to more.
    ~~Question authority~~
    and remember: Police acting on their own, can NOT BE TRUSTED.
    Thanks, 1974 Graduate of Gar-Field High School & 1975 Graduate of Osbourn.

  2. park'd said on 25 Feb 2007 at 7:15 pm:
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    Haha are you in for a surprise. It’s now called “Prince Mexi County”. My kingdom to move out of this town or even better away from the east coast.

  3. Greg L said on 25 Feb 2007 at 7:43 pm:
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    park’d, consider staying and helping to pick up the pieces. The park could be a good place, if only it had leadership that would work to help that happen.

  4. Empire Stater said on 25 Feb 2007 at 8:19 pm:
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    I’m an amateur sleuth and sitting snowbound in the Northeast, I googled Manassas Park (where friends were visiting), and I ended up seeing this blog and a lot of stuff about David Ruttenberg. I read all the documents used as back up and I think I know what happened. As usual, I think the truth to all of this he said/she said lies somewhere in the middle of what the City officials are saying and what Ruttenberg is saying.
    I don’t like conspiracies because it means people have to coordinate their activities and most people can’t even find their keys, let alone figure out how to nail someone. I think people react to events.
    So here’s my take. I think Ruttenberg was operating a pool hall in less than the most efficient way. Pool halls attract an assortment of straight and weird people and I would bet my last pay check of $14.25 that some activity going on even without Ruttenberg’s knowledge. And I bet that Ruttenberg was thinking about getting out because who wants to be stuck in Manassas Park his whole life.
    Along comes Colonial Downs and Ruttenberg sees his ship coming in with the horses and off-track betting. He tries to convince everyone, including the Colonial Down yahoos that his shopping center is the best place for the betting. But he makes sure that Colonial Downs can’t get his lease without giving him something big. He negotiates with the landlord to keep out of provision that lets the landlord throw him out if the voters of MP okay the off-track betting.
    Then he goes to Colonial Downs with that whacko document that’s almost extortion. Ruttenberg says, “You hire me for $5 million and I’ll get you the lease and the vote. You don’t give me $5 mllion and you won’t ever get into the area.”
    Colonial Downs doesn’t like the game because it’s already talked to the local politicians and they’ve told Colonial Downs they’ll win the vote. Besides, everyone who has inside information could make a killing by buying up property or betting (pardon the pun) on the development. Anyway, Colonial Downs tells the Ruttenberg to forget about it, but maybe there will be something if the vote is favorable. The vote isn’t favorable.
    So the city decides they’ve had enough of the Ruttenbergs and they try to figure a way to get them out the way so there’s no more extortion. Since the place is a little shady anyway, they decide to exploit the situation by sending in undercover people. And after a few attempts and enough to create some sort of probable cause, they send in the marines. Except the marines don’t find anything much.
    Now the city is pissed. Ruttenberg knows that he’s the one that set things off with Colonial Downs and he knows that some of the local officials are corrupt and it’s a game of chicken. If the City goes after him, he’ll go after them.
    So all of this is now playing out with Ruttenberg accusing the city officials of corruption and the city officials accusing Ruttenberg of sleaze.
    Now, I’m basing all of this on just the stuff I’ve read so I could be way over my head. But standing way back in the woods in New England, this is what it looks like.
    I’m watching this just to see what happens.
    Is the rest of Virginia like this?

  5. Greg L said on 25 Feb 2007 at 8:48 pm:
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    An interesting theory, but there’s a couple of pieces you might be missing in order to refine this into something solid:

    - At the height of his business, in 2004 before the raid, David was making a killing. Rack & Roll was very busy, and was a place where all the girls that are easy on the eyes would gather. It was busy enough that the security team alone was six people, there was a DJ every night, and a handful of good waitresses. Dave even had a company limo. When you’re doing this well, getting out isn’t something you think about.

    - The deal with Ruttenberg for $5 mil is pretty reasonable when you consider that the real OTB to be developed might have pulled in about $30-100 million or more annually in profits.

  6. I LOVE TV said on 25 Feb 2007 at 10:38 pm:
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    Response to Empire Stater:

    I think that you have a really good overall take on the situation. I have been following this from the beginning, and would like to give you my take on all of this.

    “So here’s my take. I think Ruttenberg was operating a pool hall in less than the most efficient way“.
    No - Dave had a true cash cow.

    “Pool halls attract an assortment of straight and weird people…”
    Absolutely.

    “…and I would bet my last pay check of $14.25 that some activity going on even without Ruttenberg’s knowledge.”
    Nobody knows everything.

    “And I bet that Ruttenberg was thinking about getting out because who wants to be stuck in Manassas Park his whole life.”
    Not at that point - he really liked his job and income at that time (pre-raid).

    Along comes Colonial Downs and Ruttenberg sees his ship coming in with the horses and off-track betting. He tries to convince everyone, including the Colonial Down yahoos that his shopping center is the best place for the betting.
    Absolutely - he was right - he had THE location for Colonial Downs for geographical reasons.

    But he makes sure that Colonial Downs can’t get his lease without giving him something big. He negotiates with the landlord to keep out of provision that lets the landlord throw him out if the voters of MP okay the off-track betting.
    Smart business.

    “Then he goes to Colonial Downs with that whacko document that’s almost extortion. Ruttenberg says, “You hire me for $5 million and I’ll get you the lease and the vote. You don’t give me $5 mllion and you won’t ever get into the area.”’
    It never reached that point - this was supposed to be an negotiation.

    “Colonial Downs doesn’t like the game because it’s already talked to the local politicians and they’ve told Colonial Downs they’ll win the vote.”
    Most likely

    “Besides, everyone who has inside information could make a killing by buying up property or betting (pardon the pun) on the development.”
    That is true.

    “Anyway, Colonial Downs tells the Ruttenberg to forget about it, but maybe there will be something if the vote is favorable.”
    Correct. They agreed to give him a food & beverage contract in exchange for the pool hall.

    “The vote isn’t favorable.”
    Yes

    “So the city decides they’ve had enough of the Ruttenbergs and they try to figure a way to get them out the way so there’s no more extortion.”
    I assume that you’re being sarcastic - when somebody has something that you want for more than you want to pay, that is not extortion, but good old capitalism

    Since the place is a little shady anyway,…”
    Shady is in the eye of the beholder, but this place was no “Deadwood.“

    “…they decide to exploit the situation by sending in undercover people. And after a few attempts and enough to create some sort of probable cause, they send in the marines. Except the marines don’t find anything much.”
    Absolutely true.

    “Now the city is pissed.”
    Oh they’re real pissed

    “Ruttenberg knows that he’s the one that set things off with Colonial Downs and he knows that some of the local officials are corrupt and it’s a game of chicken. If the City goes after him, he’ll go after them.”
    On the money

    “So all of this is now playing out with Ruttenberg accusing the city officials of corruption and the city officials accusing Ruttenberg of sleaze.”
    Absolutely

    “Now, I’m basing all of this on just the stuff I’ve read so I could be way over my head.”
    Actually a very astute interpretation

    “But standing way back in the woods in New England, this is what it looks like.”
    Let’s just say, that it really looks like there have been some serious atrocities committed here. And when you look around and see things like eminent domain being used to confiscate personal property to give to developers at pennies on the dollar…all of this takes on a very scary real life view on what it is like to get steamrolled.

    “I’m watching this just to see what happens.”
    So am I, and a lot of others as well

    “Is the rest of Virginia like this?”
    I hope not, but with the incredible lack a help from county &state agencies to really find the facts and not gloss over them, I don’t know. You know what they about fighting city hall….

    And I think that you get to collect on your $14.25

  7. Lars Wiechmann said on 26 Feb 2007 at 5:19 am:
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    Empire Stater — at least you read the archives. Dig deeper. Keep drawing your own conclusions — that’s a good thing. You are definitely smart enough to find the documentation that has been compiled by good research. After a while it will all fit together and you might start drawing some of the same conclusions that many have already known for a while…..if not…it’s refreshing that you have obviously read alot of this evidence posted (hear that Mom)?

  8. Neil Ruttenberg said on 26 Feb 2007 at 8:44 am:
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    Empire Stater:

    My name is Neil Ruttenberg. I’m David Ruttenberg’s father. I have a JD from Columbia, I’ve practiced law for more than 40 years and I drafted that “wacko document that’s almost extortion.”

    So let me take a look at this. We have a good business, operating at that time (1996) for 10 years and, with respect to Colonial Downs, we establish a partnership with the business next door, a large furniture store. We have exceptionally good lease terms with prospects of helping Colonial Downs also get a favorable lease. We explain all this to Colonial Downs in a meeting at their facility and they ask me to draw up a proposal (which you now describe as “almost extortion”). You’ll excuse me, but one empire stater to another, we’d have been nuts not to try to work out the best possibile deal would could under the circumstances. As someone has said above, that’s capitalism.

    Your criticism of our business acumen is a cheap shot. Its not unlike the Manassas Park officialdom. They didn’t like the idea that David might prosper either. They thought that Manassas Park belonged solely to them and a born “empires stater,” like David, should be taught his place. Well they were right. This whole thing has taught David his place. It’s his place to fight and I’m proud of him. Stay in New York.

  9. Loudoun Insider said on 26 Feb 2007 at 8:52 am:
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    The Ruttenbergs are obviously class people.

Comments are closed.


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