Plans for Topeka City Council to buy the financially-troubled Heartland Park Topeka circuit in a bid to repay millions of dollars in bond obligations have been voted down by councillors, throwing the future of the venue into further doubt.
On Tuesday night, councillors on the city's governing body rejected a resolution to allow the city manager to implement a plan which would see new sales tax revenue, or STAR, bonds issued, with an estimated value between $4.8 million and $5.5 million to buy the track. The plan was an effort by the council to stave off an $8.9 million hole in its finances caused by a previous bond issue, which paid for circuit upgrades and 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.
The yield from the original bonds was much weaker than anticipated, leaving the difference to be made up by increased property taxes – understandably to the chagrin of local residents and businesses. In a further twist, the economic downturn hit track operator Jayhawk Racing hard, with debts accrued leading Jayhawk owner Ray Irwin putting up the for sale signs to stave off possible foreclosure by the CoreFirst bank.
The new plan would have seen the bonds issued over a wider area with a more guaranteed yield, allowing the council to cover the debts from the original bond issue, while either selling on the track or leasing it to a new operator.
The council actually voted in August 2014 to buy the racetrack and expand the redevelopment district but that decision drew strong criticism from the public. A petition drive seeking to force a public vote, which was ultimately ruled invalid by the Kansas Court of Appeal, delayed the deal going ahead until after council elections in April. With four of the nine-member governing body newly-elected, the decision was taken to reconsider the STAR bond issue. That resolution was voted down 6-4, despite having the backing of the city mayor.
In a statement following Tuesday night's vote, Shelby Development, LLC, the company which was in talks with the council to operate the track, said it was now considering its options: "We are disappointed in the City's decision, but respect that those voting against the issuance of the STAR bonds believe they were acting in the best interests of the constituents. We will step back, weigh our options and move forward accordingly."
The National Hot Rod Association, which is due to hold a drag meeting at the end of the month, also expressed its disappointment at the news, but said it was still planning to go ahead with the annual Kansas Nationals at Heartland Park from May 22 to 24. Further scheduled drag meetings in August and September – the only other significant motorsport planned for 2015 – were now in doubt, the organisation confirmed.
"Where we go from here we really don't know," Rob Parks, Director of NHRA Division 5 told the local WIBW News network. "We still have to get an operator in there and our August event and September event are now in question but we'll have to see. The weeks to come are really going to tell us what path the city, the bank and everybody's going to take."