Hearing nears on track incentives
Thursday, May. 27, 2010
As fans descend on the Charlotte Motor Speedway for the races this weekend, track officials and local governments are preparing to resume another contest: their long-running stand-off over incentives.
The speedway and its parent company, Speedway Motorsports Inc., sued the city of Concord and Cabarrus County in September, demanding, among other things, that the governments pay them back faster for $4 million worth of road work and other improvements around the Concord track and nearby zMax Dragway.
The city and county filed motions to dismiss the suit shortly after.
A Cabarrus County Superior Court hearing on those motions is scheduled for Wednesday..
The court battle stems from an agreement in late 2007. Speedway owner Bruton Smith had threatened to move the sprawling track out of the county after the city voted to block his plans for the new zMax drag strip, citing noise and traffic issues.
In response, city and county officials offered an incentives package, and the two sides agreed that Smith would build the $60 million drag strip and complete $200 million in speedway upgrades in exchange for road and other improvements estimated at $80 million.
In 2008, government officials proposed a formal agreement with more detailed terms, including a payback period of up to 40 years. Smith, insisting the money was due within three to five years, rejected it.
To date, Speedway Motorsports has made about $4 million worth of road improvements and sound mitigation work, according to its lawsuit.
City and county officials have said they have not reimbursed him for the work because the parties have not reached a formal agreement about who should pay for what – or even which projects are part of the incentives package.
They say paying all the money over such a short period would severely damage their budgets and drive local taxes sky-high.
City and county officials and their attorneys declined to comment this week. Speedway spokesman Scott Cooper referred questions to attorney Jared Gardner of Charlotte, who declined to comment on the case.
Cabarrus County economic development officials, too, declined to comment, though some said the suit was not a major issue among local leaders.
One tack the governments are taking is arguing that the court cannot force terms of an incentives agreement on the parties, because there was never a formal contract between the two.
In response, speedway officials said the original deal was a contract itself – that the governments proposed it as a way to keep the speedway in town, and the speedway accepted.
Despite the fact that specific terms have not been decided, the speedway claims that the governments are still contractually bound to deliver the $80 million in a “reasonable” time.
The speedway also claims negligent misrepresentation, saying the governments made track officials believe they would and could pay $80 million over three to five years and should have told them at the beginning if that wasn’t possible.
The promise was what prompted Smith to keep the speedway in town, turning down other incentives offers, the court filing said.
“The Local Governments have conjured every conceivable excuse to avoid liability,” the filing said. “(They) made a firm promise to induce SMI to remain in ‘partnership’ with them … and thereby continue generating hundreds of millions of dollars for the local economy. SMI stayed. The Local Governments need to step up and do their part.”
In a response filed in April, the Concord officials offered this: “Although the Plaintiff’s claims are barred, they are not without a practical remedy. They can resume the negotiations that they stopped so abruptly in 2008.”
Kirsten Valle: 704-358-5248.