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Pulling strings

House bill to provide tax breaks
for speedway dies in labor fight

Bill would help fund track expansion

By Don Ward
Editor

(May 2009) – When it comes to auto racing, nothing is certain. That proved to be true in March when what seemed like a sure thing to pass Kentucky’s state legislature to boost tourism and the economy eventually died in a fight over in-state labor.
Gov. Steve Beshear on Feb. 17 voiced his support for an amendment to the Kentucky Tourism Development Act to add a new eligible category of so-called “legacy expansion” projects. Former Kentucky Speedway owner Jerry Carroll joined new owner Bruton Smith of Speedway Motorsports Inc. in Frankfort to announce the deal in House Bill 521.
That bill easily passed the Democratic-controlled House but was revised later in the month when the Senate, headed by Republican President David Williams, removed a provision that required any work at the track to be done by Kentucky-owned companies. The revised bill was sent back to the House, where no action was taken before the session ended.
Carroll, who now works as a consultant for the track he helped develop in Sparta, Ky., and Smith had hoped the tax incentive package would fund up to 25 percent of a $75 million expansion of the facility to accommodate the Sprint Cup Series. Smith, whose company owns seven other race tracks that hold NASCAR Sprint Cup races, has vowed to move one of those races to Kentucky, once a pending appeal of a lawsuit is resolved. The pending legal action stems from Carroll and his partners’ lawsuit against NASCAR over alleged anti-trust violations by its refusal to award a Sprint Cup race to the Kentucky track. The appeal is scheduled to be heard before the U.S. Court of Appeals in 2009.
Meantime, the tax incentive package must await future action, perhaps before the fiscal year ends July 1, if Gov. Beshear orders a Special Session to deal with the state’s expected budget shortfall.
Auto racing fans can only hope the differences over labor will be ironed out to make way for a the potential for big-time auto racing in Kentucky. Many Sprint Cup stars already test there and compete in NASCAR’s Nationwide Series event each June. But the Sprint Cup would bring untold returns to the Bluegrass, considering the large weeklong crowds that follow NASCAR’s elite race drivers.
The plan before the legislature would allow SMI to recoup 25 percent of the expansion costs over a 20-year period through sales tax revenue at the track.
SMI purchased Kentucky Speedway for $78 million in a deal that closed in December.
“The impact of a NASCAR Sprint Series Cup race for Kentucky is undeniable,” Beshear said. “NASCAR is the No. 1 spectator sport in the United States and is broadcast in more than 150 countries and 30 languages. I’m excited about the potential of Kentucky joining these ranks.”
Under the proposed legislation, legacy expansion projects must conduct events that are in the top league, series or sanctioned level of their type of event, provide permanent seating for 65,000 spectators and be broadcast nationally. The venue must have previously been approved for incentives and the expansion project must exceed $30 million and present one or more “premier events” not previously held in Kentucky.
Smith wants the state tax incentives to fund about $19 million of a $75 million expansion of the track by nearly doubling the seating capacity to 120,000 and tripling the number of restrooms. He would also build more roads into and out of the facility and add parking areas.
Work already has begun to build camping areas and restrooms in the infield for this race season, which begins May 9.

• Don Ward is the editor, publisher and owner of RoundAbout. Call him at (812) 273-2259 or email: Don@RoundAbout.bz.

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