The future of Heartland Park Topeka in Kansas hangs on a May 5 vote by city councillors over whether to buy the financially-troubled facility. The former NASCAR Truck Series venue is in need of a debt-restructuring programme and new ownership in order to meet a deadline for foreclosure set by the bank of its current owners, Jayhawk Racing.
Should a deal fail to go ahead and the track closes, Topeka City Council would be left with at least an $8 million hole in its finances, since it had previously issued sales tax revenue bonds (known as STAR bonds) to pay for previous circuit upgrades. STAR bonds work by allowing public authorities to claim back tax revenues from the State over a designated area, in order to fund capital projects that will boost the local and wider economy. The 2005 bond issue was supposed to attract new retail development in the area around the track, with the increased sales taxes generated by those developments paying off the bonds. Instead only $200,000 was recovered each year, instead of an anticipated $1 million and leaving a considerable shortfall.
The downturn in the world economy plus the loss of major sanctioned events at the circuit led to mounting debts for Jayhawk Racing and total closure of the facility looked possible. However, the city council agreed in principle in August last year a deal with Jayhawk boss Ray Irwin to buy back the circuit, with the funding provided by a new STAR bond issue, this time over a much bigger area which included an established retail presence.
However, the proposition proved extremely controversial, with a local group organising a petition to try an force a local referendum on the deal, though this was subsequently ruled invalid by a Shawnee County judge.
The council moved forward with identifying potential new buyers or operators for the circuit, with a new firm founded by former drag strip operator Chris Payne being the favoured bidder. Payne was part of an investment group that owned the former Kansas City International Raceway, which was sold in 2011 for $1.5 million to Kansas City to build a public park.
However, as time moved on and the deal was still up in the air, local elections shook up the membership of the council and it was decided a further vote would be needed before the deal could finally be sealed. The governing body will take that vote on May 5, ahead of which two town hall meetings have been scheduled to allow the public to have their say.
The previous vote was resolved seven to three in favour of issuing the STAR bonds, but four of the councillors on the governing body have changed – three previous yes votes and one no vote – and indications are that their replacements will lead to a 5-5 deadlock on the issue. This would mean the vote would fail and the STAR bond issue would be ruled out.
Quite what this would mean for the circuit is unclear, although Chris Imming, who organised the petition against the sale, suggested an alternative solution to the council. He proposed that the CoreFirst bank takes the deeds of the facility to sell off to the highest bidder, on the basis that the Kansas Department of Commerce would likely still give approval to expand the original STAR bond district. This would allow the city to pay off the remaining debt, without needing to issue new bonds.
See more on this from the local WIBW 13 News bulletin: