|Charlotte Motor Speedway sues over $80M deal||| Print ||
|Written by EMERY P. DALESIO, AP Business Writer|
|Monday, 08 April 2013 06:53|
RALEIGH, N.C. (AP) — The mogul behind one of the country's largest auto racing track operators is trying to resurrect a lawsuit claiming local officials reneged on an offer of $80 million in incentives to land a new drag strip and upgrade the Charlotte Motor Speedway.
A three-judge state Court of Appeals panel will hold a closed-door discussion Tuesday to determine whether the lawsuit will be heard by a jury. A judge last year dismissed the lawsuit against Cabarrus County by Speedway Motorsports Inc. and Charlotte Motor Speedway, both based in Concord and headed by magnate Bruton Smith.
At issue is whether Smith can enforce what his lawyers say was an oral agreement that ended threats to move the 135,000-seat speedway and build a new drag strip somewhere other than the heart of NASCAR country. The contract wasn't put in writing until after the new drag strip opened the following year, with terms the track operator rejected. If the lawsuit doesn't move forward, Speedway Motorsports could have to wait up to 40 years to be reimbursed for road and other upgrades around the track.
"Cabarrus has received what it bargained for, and seeks now to avoid its return promise," lawyers for SMI said in court filings.
The county's lawyers counter that it's not their responsibility that SMI built the drag strip and made other improvements before a contract was finalized. Business logic didn't seem to hold when Smith threatened in 2007 to somehow move the superspeedway the successful auto dealer helped design and build in 1959, the county's lawyers said.
"The fact that abandonment of the dragway improvements would be economically senseless by no means prevented it being done. After all, plaintiffs insisted that they 'had every right and intention' to abandon the far more expansive speedway improvements," the county's lawyers said.
It's not clear if SMI — which owns the track and seven others in Georgia, Tennessee, California, Kentucky, Nevada, New Hampshire and Texas — has yet seen any of the $80 million announced in 2007. A track spokesman declined comment and lawyers for both sides did not respond to requests for comment last week.
SMI reported profits of $42.1 million last year on revenues of $490 million.
The dispute started when Smith ordered workers to start grading land on speedway property for the $60 million drag strip 20 miles north of Charlotte before seeking permits from local officials. Area residents complained about the potential for increased noise.
Smith downplayed those objections in a 2008 interview.
"Do you have any friends that built a house close to a speedway that didn't know there was a speedway here?" Smith, SMI's chief executive officer and chairman, told The Associated Press. "Can you imagine? All of you knew there was a speedway here, right?"
When local officials delayed granting approvals, Smith threatened to build the drag strip elsewhere and move the speedway, which helped foster a motorsports industry estimated to be worth $6 billion dollars a year in North Carolina.
Local officials tried to soothe Smith. The county tourism bureau flew a plane over the speedway with a banner that read, "We (heart) you Bruton." The street leading to the track was renamed "Bruton Smith Boulevard."
The two sides announced a deal in November 2007 for Smith to build the drag strip and make more than $200 million in speedway upgrades, with Concord and Cabarrus County officials offering tax breaks worth $80 million.
But the two sides never reduced their announced agreement into contract language until the day after the 30,000-seat, four-lane zMax Dragway officially opened the following August, just three weeks before its first scheduled race.
The contract's terms said SMI would spend its millions in infrastructure improvements within three years, the company's lawyers said, but would be reimbursed from property tax breaks as the improvements increased its value. The method is a common way North Carolina governments encourage company investment.
Smith rejected the contract. SMI and the speedway sued the county and the city in September 2009. Concord was dropped from the case after agreeing to pay a $2.8 million and getting land easements, The Charlotte Observer reported.
SMI's lawyers say local officials verbally promised in 2007 to come up with the $80 million in no more than six years. They say the county had a financial motive like a corporation and therefore can't defend itself with a state law protecting municipalities from lawsuits.
Cabarrus County's lawyers counter that there was nothing that could be considered a contract until the 2008 document described what both sides would do and when. The agreement announced the previous year included none of that, the county's lawyers said.
"This was an agreement to agree, which is not an agreement at all," Cabarrus lawyers said.
The attorneys say it would be difficult for the county to come up with $80 million quickly because it is allowed to collect only $104 million in property taxes a year. That capacity is publicly known, so SMI can't say it was blindsided, the lawyers said.
A decision is expected in about three months. If the case moves forward, it could be appealed to the state Supreme Court.
Emery Dalesio can be reached at http://twitter.com/emerydalesio .
Copyright 2013 The Associated Press.
Front Page Stories
|Body of BGSU student found
07/23/2014 | Sentinel-Tribune Staff
A missing poster for Cory Barron, is posted on a light pole along West 6th Street in Cle [ ... ]
|Chinese lanterns may have ignited fire|
07/23/2014 | PETER KUEBECK, Sentinel Staff Writer
File photo. A firefighter is seen near a fire engulfing a pallet yard on West Broadway S [ ... ]