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Chevy Nick

Future of Heartland Park in question

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Chevy Nick

Heartland Park RFP seeks owner or manager with 'proven track record'

 

A 10-year financial plan to operate Heartland Park Topeka is among things Topeka’s city government is asking for from those seeking to be chosen to buy — or lease and manage — the financially troubled racing facility.

 

A request for proposals the city put out last month also asked applicants to submit separate plans to manage, enhance and grow Heartland Park’s drag strip, road track, dirt track and undeveloped property, and a plan for entering into a revenue sharing agreement with the city.

 

Suzie Gilbert, the city’s communications and marketing director, said Tuesday five parties had registered so far to submit proposals. Dec. 12 is the deadline for applicants to respond to the RFP, which can be found on the city’s website at http://cjon.co/15NZexb.

 

“Interested parties are encouraged to include concepts for use that enhance and grow existing motorsports at the three separate and distinct tracks, include new concepts for use that may or may not be motorsports related but increase the total number of events and spectator attendance that will maximize the use and revenue potential for the entire facility,” the RFP said.

 

It requires applicants to submit:

 

■ A written plan that clearly demonstrates they have the ability to operate and maintain the entire facility.

 

■ A 10-year financial plan demonstrating applicants fully understand the economic assets and liabilities related to operating and maintaining all aspects of Heartland Park.

 

■ Documentation demonstrating applicants have the qualifications and experience to operate and maintain all aspects of the entire facility.

 

■ Preliminary concepts and ideas to develop and use the 277-plus undeveloped acres at Heartland Park.

 

■ A letter from the applicant’s insurance broker indicating insurance will be provided in the manner and at limits required by the city.

 

■ Three references, including two that can confirm the applicant’s technical ability and one who can confirm the applicant’s financial ability to carry out the operation.

 

■ Written confirmation the applicant will strictly adhere with city ordinance 19915, which the city’s governing body approved Aug. 12 authorizing the sale, and the city’s existing agreement with the NHRA to continue to hold its annual Kansas Nationals event at Heartland Park Topeka for three more years, provided the city government follows through with its plan to buy Heartland Park.

 

The RFP said proposals will be ranked on a 100-point scale through which they can earn up to:

 

■ 20 points for their plan to operate and maintain Heartland Park.

 

■ 20 points for their qualifications and experience with racing operations.

 

■ 20 points for their financial ability to operate, maintain and grow Heartland Park.

 

■ 20 points for their guaranteed compliance to maintain Heartland Park as a racing facility and adhere with all elements of city ordinance 19915.

 

■ 10 points for “development of the entire 700 acre facility.”

 

■ 5 points for ability to procure insurance that meets the city’s requirements.

 

■ 5 points for “conforming to the RFP terms, conditions and prerequisites set forth in the RFP documents.”

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Chevy Nick

Imming seeks stay to keep city from proceeding with Heartland Park purchase

 

The attorney representing petition drive organizer Chris Imming filed a motion Tuesday asking the Kansas Court of Appeals to issue a stay prohibiting Topeka’s city government from moving forward with its proposed purchase of Heartland Park Topeka while Imming’s appeal of a recent court decision in the city’s favor remains in progress.

 

“The stay is necessary to insure that the appeal is neither rendered moot, nor that the district court decision is perceived as having been acquiesced with, and to afford a review of the merits of these important public policy issues,” the 11-page document filed by R.E. “Tuck” Duncan said.

 

It refers to a petition drive initiated after the city’s governing body voted Aug. 12 to authorize the purchase of Heartland Park and the expansion of its redevelopment district. The purchase was among steps required to carry out the city’s plan to buy Heartland Park and solve a problem regarding Sales Tax Revenue (STAR) bond debt. City manager Jim Colson said the city has no plans to run the racetrack and only wants to find a new owner or manager for it.

 

Imming responded to the Aug. 12 vote by initiating a petition drive that gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but the city filed a lawsuit challenging the petition’s legality, and Shawnee County District Judge Larry Hendricks last month ruled it invalid.

 

Hendricks’ ruling characterized Imming’s petition as an initiative petition seeking to overturn an administrative ordinance — something not allowed by Kansas law.

 

Duncan subsequently filed an appeal on behalf of Imming.

 

Meanwhile, the city’s governing body voted last week to authorize the city staff to proceed with steps needed to market and sell reissued STAR bonds to help bring about the purchase. The city staff plans to seek bids and come back before the governing body Dec. 16 with pricing to formally adopt the bids.

 

The city also is in the midst of accepting proposals from anyone seeking to buy or manage the track, with the submission deadline being Friday.

 

City attorney Chad Sublet said Monday at a public meeting regarding the matter that under the state’s general bond law, the city could move forward with the issuance of the bonds unless a judge issued a stay prohibiting that, which hadn’t happened.

 

The motion Duncan filed Tuesday seeking to bring about that stay asks the court to “make any order appropriate to preserve the status quo and the effectiveness of the judgment subsequent to be entered.”

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Chevy Nick

City must respond by Monday to request for stay of Heartland Park case

 

The city of Topeka and Jayhawk Racing Properties LLC have until 5 p.m. Monday to submit responses to the latest filing in a lawsuit appeal regarding Heartland Park Topeka, according to an order issued Wednesday by Kansas Court of Appeals Chief Judge Thomas E. Malone.

 

The order sets that deadline for the city and Jayhawk Racing to respond to petition drive organizer Chris Imming’s motion seeking a stay prohibiting Topeka’s city government from moving forward with its proposed purchase of Heartland Park Topeka while Imming’s appeal of a recent court decision in the city’s favor remains in progress.

 

“No extensions of time to file a response will be granted,” Malone wrote.

 

The appeal is linked to a petition drive initiated after the city’s governing body voted Aug. 12 to authorize the purchase of Heartland Park and the expansion of its redevelopment district. The purchase was among steps required to carry out the city’s plan to buy Heartland Park and solve a problem regarding Sales Tax Revenue (STAR) bond debt.

 

Imming responded to the Aug. 12 vote by initiating a petition drive that gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but the city filed a lawsuit challenging the petition’s legality, and Shawnee County District Judge Larry Hendricks last month ruled it invalid.

 

Attorney R.E. “Tuck” Duncan Jr. subsequently filed an appeal on behalf of Imming.

 

Meanwhile, the city’s governing body voted last week to authorize the city staff to proceed with steps needed to market and sell reissued STAR bonds to help bring about the purchase. The staff plans to seek bids and come back before the governing body Dec. 16 with pricing to formally adopt the bids. The city also is in the midst of accepting proposals from anyone seeking to buy or manage the track, with the submission deadline being Friday.

 

Duncan filed a motion Tuesday seeking a stay to prevent the city government from moving forward.

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Chevy Nick

This is bad for the future of Heartland Park.

 

Topeka delaying bond sale in HPT buy as court considers stay

 

Topeka’s city government announced Thursday it will postpone the sale of sales tax revenue bonds to acquire Heartland Park Topeka and expand its STAR bond district while the Kansas Court of Appeals considers granting a stay in a lawsuit regarding the city’s plan to buy that racing facility.

 

The city’s governing body voted last week to authorize the city staff to proceed with steps needed to market and sell reissued STAR bonds to help bring about the proposed purchase.

 

The staff had planned to seek bids and come back before the governing body Tuesday with pricing to formally adopt the bids.

 

But an attorney representing Chris Imming — who led a petition drive seeking to force a public vote on the matter, with a Shawnee County district judge ruling last month the petition was invalid — sought a stay Tuesday that would prohibit Topeka’s city government from moving forward with the purchase while Imming’s appeal of that ruling remains in progress.

 

Kansas Court of Appeals Chief Judge Thomas E. Malone on Wednesday gave the city until 5 p.m. Monday to respond to the motion.

 

City communications and marketing director Suzie Gilbert said in a news release Thursday that the city will respond to Imming’s decision by Monday and expects a swift decision.

 

“Delaying the sale until the appellate court has considered the petitioners’ motion for a stay will reduce uncertainty for potential bond investors, allowing the City to capture the best bond rates possible,” Gilbert said.

 

She added, “Should the appellate court’s decision be favorable for the City, the bonds will be taken back before the governing body for final approval.”

 

The city’s governing body plans to take up the topic for discussion at Tuesday’s city council meeting, Gilbert said.

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Chevy Nick

Topeka council to discuss Heartland Park on Tuesday

 

The Shawnee County Commission on Monday will consider approving a new management contract for its three golf courses, and the Topeka City Council on Tuesday will discuss, but take no action on, the Heartland Park Topeka Sales Tax Revenue (STAR) bonds.

 

The commission will meet at 9 a.m. in its chambers in Room B-11 of the county courthouse, 200 S.E. 7th.

 

Commissioners Bob Archer, Shelly Buhler and Kevin Cook will consider a request from the parks and recreation department to enter into a five-year contract with Lake Shawnee Golf Management to manage the Lake Shawnee, Cypress Ridge and Forbes golf courses. The commissioners on Nov. 20 directed the department to negotiate a contract with the firm after the county received nine responses to its request for proposals.

 

“Thanks to this process, their bid actually ended up saving the county $9,000 compared to the previously held agreement,” according to the memorandum from parks and recreation director John Knight.

 

Shawnee County will pay the management firm $324,000 a year — $23,000 per month to run the Cypress Ridge and Lake Shawnee courses and $4,000 each month to run the course at Forbes.

 

The agreement calls for Lake Shawnee Golf Management to operate the three courses as an independent contractor, running the pro shops, concession facilities, meeting rooms and golf play. The firm can collect additional revenue through green and trail fees, permits and golf cars.

 

The commission on Monday also will consider approving:

 

■ Awarding a $25,000 bid to Kansas Fencing Inc., for the purchase and installation of fencing for the Juvenile Detention Center gardening program.

 

■ The purchase of a hardware upgrade for the information technology department for $77,923.76.

 

The Topeka City Council will meet at 6 p.m. Tuesday in its chambers in City Hall, 214 S.E. 8th. Its agenda includes a discussion on the “sale of bonds for permanent financing to acquire Heartland Park and the expansion of the STAR Bond District.”

 

The city on Thursday announced it would postpone issuing the Heartland Park STAR bonds while the Kansas Court of Appeals considers granting a stay in a lawsuit regarding the city’s plan to buy that racing facility.

 

The bond sale initially was scheduled for Tuesday, but an attorney representing Chris Imming — who led a petition drive seeking to force a public vote on the matter, with a Shawnee County district judge ruling last month the petition was invalid — sought a stay that would prohibit Topeka’s city government from moving forward with the purchase while Imming’s appeal of that ruling remains in progress.

 

“Delaying the sale until the appellate court has considered the petitioners’ motion for a stay will reduce uncertainty for potential bond investors, allowing the city to capture the best bond rates possible,” city communications and marketing director Suzie Gilbert said in a news release.

 

Kansas Court of Appeals Chief Judge Thomas E. Malone on Wednesday gave the city until 5 p.m. Monday to respond to the motion.

 

The city council on Tuesday is scheduled:

 

■ To award $150,000 in neighborhood empowerment grants to six project locations, including Central Park, Chesney Park, Hi-Crest, Tennessee Town, Valley Park and Ward Meade.

 

■ During presentations, to present the Tony Scroggins Award for Outstanding Organization.

 

■ To make six board appointments, during its consent agenda.

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Chevy Nick

Topeka receives four responsive bids to run Heartland Park

 

The city of Topeka received four proposals that met qualifications to operate Heartland Park Topeka.

 

The four bidders were MK Investments, Larry Sinks, Monopoly Acquisitions LLC and International Motorsports Entertainment and Development Corp., said city communications and marketing director Suzie Gilbert.

 

The goal is to have a decision by Jan. 6, she said.

 

Larry Sinks is the name of the owner of JoeCollege.com, which in 2008 was ordered to pay Kansas Athletics Inc. $667,507 in attorney fees and expenses from a court case over his KU-themed T-shirts. He also owns several properties in downtown Lawrence.

 

Monopoly Acquisitions LLC is based out of Raytown, Mo., and owns several commercial properties throughout the Kansas City area.

 

International Motorsports Entertainment and Development Corp. is based out of Coon Rapids, Minn. An article appearing in the Minneapolis/St. Paul Business Journal in 2009 states: “IMEDC President Jim Farnum used to own a Funny Car drag-racing team and a racing-merchandise retailer called Pro Motorsports that grew to 13 locations in the Midwest before filing for Chapter 7 bankruptcy in fall 2007.”

 

Information on MK Investments wasn’t immediately available.

 

The city of Topeka on Monday wasn’t able to confirm the information about the bidders.

 

Gilbert declined to release specifics of the proposals Monday, but said an overview will be presented to the Topeka City Council during its meeting Tuesday.

 

However, she said, the city only is considering proposals for owners and lease holders.

 

“It’s important to note the city will not consider anyone proposing to manage the track for a fee from the city,” Gilbert said.

 

Gilbert on Dec. 2 said five parties had registered to submit proposals.

 

The city accepted responses to its request of proposals for owners and managers of the racetrack from Nov. 24 to 2 p.m. Friday.

 

The RFP had several requirements from applicants, including:

 

■ A 10-year financial plan demonstrating applicants fully understand the economic assets and liabilities related to operating and maintaining all aspects of Heartland Park

 

■ Documentation demonstrating applicants have the qualifications and experience to operate and maintain all aspects of the entire facility

 

■ Preliminary concepts and ideas to develop and use the 277-plus undeveloped acres at Heartland Park

 

■ Written confirmation the applicant will strictly adhere with city ordinance 19915, which the city’s governing body approved Aug. 12 authorizing the sale, and the city’s existing agreement with the National Hot Rod Association to continue to hold its annual Kansas Nationals event at Heartland Park Topeka for three more years, provided the city government follows through with its plan to buy Heartland Park.

 

The RFP said proposals will be ranked on a 100-point scale, through which they can earn points relating to their plan, qualifications, financial ability and other factors.

 

“The city is moving forward with evaluation and negotiations with the bidders,” Gilbert said.

 

Finding an owner or management firm is part of the city’s plan to save the troubled racetrack and the $10 million it owes on existing Sales Tax Revenue bonds. The plan involves issuing another estimated $5 million in STAR bonds so the city can expand the STAR bond district around the track to capture additional state sales tax dollars to pay off the debt. The total debt would come to $16.4 million, which is expected to be paid entirely by existing sales tax dollars, according to projections of existing businesses in the expanded district.

 

The agreement calls for Jayhawk Racing, owned by Ray Irwin, to receive $2.39 million of the additional STAR bond revenues. Irwin is to use that money to pay CoreFirst Bank $300,000, the city of Topeka $184,234 and an unknown amount to unspecified vendors.

 

The city is one of the vendors owed, with nearly $45,000 in delinquent water bills, as of Nov. 28.

 

CoreFirst would receive an additional $1,944,335 of STAR bond money, while the Small Business Association would receive $531,868.99 and the Department of Commerce would receive $500,000.

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Chevy Nick

Topeka asks petitioners to secure $45.6M bond if stay is granted

 

The city of Topeka and Jayhawk Racing have asked the Kansas Court of Appeals to reject the stay in the Heartland Park Topeka appeal requested by petitioner Chris Imming.

 

However, if the stay should be granted, both entities request the court make Imming purchase bonds to cover potential damages resulting from the stay.

 

Jayhawk Racing Properties LLC said that amount should be $5.29 million.

 

Topeka said, according to a formula under state law, the bond should be $45.6 million.

 

Should the court grant those requests, Imming would have to pay the amounts if he loses the appeal.

 

“Without an adequate supersedeas bond, there simply is no chance that the status quo will be preserved pending appeal because Jayhawk not only will face foreclosure actions but it also will very likely be out of business,” reads the 26-page response filed Monday morning from Jayhawk Racing’s law firm, Frieden, Unrein & Forbes, LLP.

 

A supersedeas bond, the Jayhawk filing reads, is “a customary condition” to requests for a stay in pending appeals and is granted “to ensure that the appellee is protected from damages likely to be incurred during the delay occasioned by the appeal of a favorable judgment.”

 

“If the Court of Appeals ultimately determines that the Imming Petition is invalid, Jayhawk will have suffered substantial injuries, including the loss of its business, which is generally considered to be an irreparable injury,” Jayhawk’s filing states.

 

The city based its supersedeas bond amount on an effort to “protect the interest of the city and its taxpayers,” according to the filing from Lathrop & Gage.

 

If the project doesn’t go through, the city claims, city taxpayers would suffer the immediate loss of $23.5 million. The city came to that figure because, if the plan doesn’t go through, the city would lose its opportunity to pay back the $8.2 million in Sales Tax Revenue (STAR) bonds with state sales tax dollars and would lose its interest in the racetrack, which is valued at $15.3 million.

 

The city also claims an annual economic impact of $160 million that would be lost if the stay were granted.

 

Based on those figures, the city estimates the first year of losses from the stay to be $182.5 million. According to state law, the city argues, the supersedeas bond should be made for 25 percent of that amount — or $45.6 million.

 

“The instant case presents a very real and imminent threat of monetary loss to the city should a stay be issued,” the city’s response states.

 

CoreFirst can acquire free title to the racetrack on Feb. 28 if the outstanding mortgages aren’t paid in full by then.

 

Imming’s attorney, R.E. “Tuck” Duncan Jr., said he addressed the supersedeas bond issue in his request for the stay, noting Jayhawk Racing’s funding was contingent upon STAR bonds being issued, and therefore wasn’t a guarantee from the start.

 

“I suggested to the court no bond would be appropriate, since Mr. Imming serves in a representative capacity on behalf of nearly 4,000 Topekans and has no financial benefit from being a defendant in this case,” he said.

 

The city of Topeka and Jayhawk Racing had until 5 p.m. Monday to submit responses to the request for a stay. The stay, filed Dec. 9, would prohibit Topeka’s city government from moving forward with its proposed purchase of Heartland Park Topeka while an appeal of a recent court decision in the city’s favor remains in progress. The case has been assigned to a panel of Court of Appeals judges Stephen D. Hill, Karen Arnold-Burger and Kim Schroeder.

 

The appeal is linked to a petition drive initiated after the city’s governing body voted Aug. 12 to authorize the purchase of Heartland Park and the expansion of its redevelopment district. The purchase was among steps required to carry out the city’s plan to buy Heartland Park and solve a problem regarding STAR bond debt.

 

Topekan Chris Imming responded to the Aug. 12 vote by initiating a petition drive that gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but the city filed a lawsuit challenging the petition’s legality.

 

Shawnee County District Judge Larry Hendricks on Nov. 12 ruled the petition invalid. While Duncan filed the appeal Dec. 2, he didn’t file a request for a stay until Dec. 9.

 

“The stay is necessary to insure that the appeal is neither rendered moot, nor that the district court decision is perceived as having been acquiesced with, and to afford a review of the merits of these important public policy issues,” the 11-page document filed by Duncan said.

 

Both Jayhawk Racing and Topeka were critical of Imming for not filing a stay in Shawnee County District Court and for the delay in filing the stay.

 

“Further, even if Imming’s request for a stay was timely or proper, which it is not, Imming has not established, nor can he, that he is entitled to an order that would enjoin the city from moving forward with the HPT Expansion Project,” the city’s response reads.

 

In requesting the court deny the stay, Jayhawk Racing claims Imming didn’t make the “four-part showing” required in requests for stays. Parties requesting stays during pending appeals are required to show that a strong position exists for the merits of an appeal, that irreparable injury would occur if the stay is denied, that no substantial harm will come to other parties and that public interest favors the stay.

 

Jayhawk Racing’s filing repeatedly points to shortcomings of Imming’s request for a stay, often commenting on its brevity. It says Imming “not surprisingly” failed to cite authority for many of his positions and describes Imming’s arguments at various points as “somewhat convoluted,” an “entirely circular argument,” “hopeful speculation” and as “extremely difficult to follow.”

 

Other choice passages include: “A party cannot simply wish away the requirement of a bond because he believes he might ultimately prevail — otherwise, the requirement of a bond would be wholly illusory,” and “Imming’s likelihood of success on appeal is insubstantial, at best.”

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Chevy Nick

City won't take action on Heartland Park deal until after first of new year

 

The Topeka City Council isn’t expected to take significant further action on its plan to acquire Heartland Park Topeka until after the first of the new year.

 

The council on Tuesday learned it wouldn’t have a recommendation from staff on a prospective buyer until Jan. 6. Also, the pending stay involving the petition effort likely won’t have a ruling until mid-January — putting off the bond sale until at least then. The city won’t move forward with issuing bonds while a stay in the appeal is pending because it affects the marketability of the bonds, said city attorney Chad Sublet.

 

“We expect them to rule on this pretty quickly, but it’s the Court of Appeals, and they’ll rule when they rule,” Sublet said.

 

Topeka’s governing body Tuesday took no action regarding the Heartland Park Sales Tax Revenue (STAR) bond plan, but spent about 20 minutes publicly discussing updates.

 

The city on Monday announced it had received four proposals that met qualifications to operate Heartland Park. The four bidders were MK Investments, Larry Sinks, Monopoly Acquisitions LLC and International Motorsports Entertainment and Development Corp.

 

City manager Jim Colson said he and a team consisting of Sublet, purchasing director Jay Oyler and financial and administrative services director Doug Gerber reviewed the proposals during the weekend and will continue to follow up with the bidders.

 

He emphasized none of the bidders asked for management fees to run the park.

 

“We’ve been very clear,” Colson said. “The city’s not going to invest back into this.”

 

The only way the city would move forward with a partner, he said, is if the city “has no financial risk.”

 

“If we don’t come up with somebody who meets the expectations that were established by this body, we’ll tell you,” Colson told the council. “At that point, appropriate decisions will be made.”

 

Only one member from the public signed up to speak on the issue.

 

Topekan Leo Hafner spoke critically of the city’s plan on several points, including lack of transparency, concern that the four bidders would meet requirements and skepticism about the statement that no one asked for a management fee.

 

“I just want to make it clear that unless these people are volunteering their time and going to do this for free, that’s a management fee,” he said.

 

The city, Hafner said, has created a culture of “call it something else and try to make people believe that what we’re going ahead with is forthright.”

 

“You’re going to do what you’re going to do, but at least be honest with people about it,” he said.

 

Councilwoman Elaine Schwartz had a couple of pointed questions regarding the request-for-proposal process, driven by numerous emails from her constituents.

 

First, she asked whether the Heartland Park financials went out to any of the interested buyers.

 

Sublet said they didn’t, but each bidder had financial teams analyze the facility.

 

Schwartz also asked whether any of the bidders indicated they would hold events not related to racing.

 

Colson said the city made it clear “very early on in the process” that it was looking for an agency to run the racetrack as a “12-month business.”

 

“We’re very much focused on somebody who is going to bring a comprehensive approach to this,” Colson said. “You can’t have a facility that’s built around one weekend.”

 

Councilwoman Karen Hiller said she had received emails that “bordered on outrage” regarding the bond amount the city wants petition organizer Chris Imming to purchase if the court grants the stay.

 

The city and Jayhawk Racing on Monday asked the Kansas Court of Appeals to deny the petitioner’s motion for a stay, which would prohibit Topeka’s city government from moving forward with its proposed purchase of Heartland Park Topeka while an appeal of a recent court decision in the city’s favor remains in progress.

 

However, if the stay is granted, both entities request that the court order Imming to buy bonds to cover potential damages resulting from the stay.

 

Jayhawk Racing Properties LLC asked that the bond amount be set at $5.29 million to cover the purchase price and its indebtedness.

 

Topeka said the bond should be $45.6 million — 25 percent of the racetrack’s annual $160 million economic impact and the city’s $15.3 million interest in the property and the $8.2 million owed on STAR bond debts.

 

Sublet explained the nearly $46 million figure is the amount of money the city stands to lose if the STAR bond plan doesn’t go through.

 

Imming on Tuesday was ordered to file any response to those motions by 5 p.m. Dec. 22.

 

The case has been assigned to Court of Appeals Judges Stephen D. Hill, Karen Arnold-Burger and Kim Schroeder.

 

Topeka’s law firm in the case, Overland Park-based Lathrop & Gage, charged the city $72,428.50 for 233.5 hours for its first month of work.

Edited by Guest

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Chevy Nick

State to audit proposed bond issuance to finance city's Heartland Park purchase

 

The state of Kansas will conduct an audit to look into whether the issuance of STAR bonds to finance the city of Topeka’s purchase of Heartland Park Topeka meets state requirements, legislative post auditor Scott Frank said Friday.

 

A state Commerce Department document indicated the audit is expected to last about three months, meaning it would remain in progress past the Feb. 28 deadline after which the city’s purchase agreement allows creditor CoreFirst Bank & Trust to foreclose on Heartland Park owner and operator Jayhawk Racing LLC if the bonds haven’t been issued.

 

The decision on whether to issue the bonds would be made by the state’s Secretary of Commerce, Pat George. Frank said the Commerce Decretary’s options include issuing the bonds before the audit is complete. The Topeka Capital-Journal received no response to requests it made Friday asking the Commerce Department if it would wait until the audit is complete before deciding whether to issue the bonds, and seeking the city of Topeka’s perspectives on the matter.

 

Frank said the Kansas Legislative Post-Audit Committee in a voice vote Thursday approved a request to authorize the audit made by Sen. Anthony Hensley, D-Topeka and a member of the committee.

 

The vote was among multiple actions taken by the bipartisan post-audit committee, which consists of six Republicans and four Democrats, Frank said. He said no one dissented during the vote, which directed the Legislative Division of Post-Audit – which the committee oversees -- to look into whether the issuance of the bonds is legal and whether it economically benefits the state.

 

Hensley provided committee members a letter asking for the audit, which was signed by 18 constituents who live in his district.

 

The letter contended the amount of sales tax the Department of Commerce is authorizing the city to dedicate toward the bonds appears to be inconsistent with the original intent of the law involved.

 

It also said the city appears to be violating state law by financing more than 50 percent of the project cost with STAR bond proceeds, and that the primary intent of the transaction appears to be to shift the burden of the costs of the city’s 2005 STAR bond issuance to the taxpayers of the state of Kansas.

 

A Commerce Department “scope statement” received Friday by The Capital-Journal indicated the audit was anticipated to last three months and require three LPA staff members. The division would make a recommendation on whether to proceed with the issuance of the bonds, which Frank said the Commerce Department wouldn’t be required to follow.

 

“Legislators have expressed concern that the Department of Commerce is not providing sufficient oversight of STAR bond projects to ensure that project revenues will be sufficient to cover costs and that other provisions of the law have been met,” the statement said. “Moreover, legislators have expressed concern that the recent proposal by the City of Topeka to purchase the Heartland Park Racetrack shifts the burden of bond repayment from the local government to the state and fails to meet other provisions of state law.”

 

Frank said the audit would not look at any matters regarding Topekan Chris Imming’s petition drive seeking to bring about a public vote on the purchase.

 

Imming initiated the drive after the city’s governing body voted Aug. 12 to authorize the purchase of the financially troubled Heartland Park racing facility and the expansion of its redevelopment district. The purchase was among steps required to carry out the city’s plan to buy Heartland Park and solve a problem regarding Sales Tax Revenue (STAR) bond debt. The plan involves the state’s allowing for $16 million in state sales tax revenue from the expanded district to be used to help pay off the STAR bonds, provided the Secretary of Commerce approves the plan.

 

Imming’s petition gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but the city filed a lawsuit challenging the petition’s legality, and Shawnee County District Judge Larry Hendricks last month ruled it invalid. An attorney representing Imming subsequently appealed. The Kansas Court of Appeals is in the process of deciding whether to approve Imming’s request for a stay in the case.

 

Meanwhile, the city’s governing body voted this month to authorize the city staff to proceed with steps needed to market and sell reissued STAR bonds to help bring about the purchase, while making plans to do that next month.

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Petition drive organizer says he shouldn't be forced to purchase bonds

 

Petition drive organizer Chris Imming shouldn’t be forced to buy millions of dollars worth of bonds to cover potential damages resulting from a stay he is seeking in his lawsuit against the city of Topeka, an attorney representing Imming indicated Monday.

 

R.E. “Tuck” Duncan filed a 36-page document with the Kansas Court of Appeals saying Topeka’s city government contends it will incur “real and certain” damages as a result of the proposed stay, yet it cites no specifics.

 

Duncan added that assessing a bond against a petition carrier would have a chilling effect on future efforts of citizens who want to challenge legislative decisions of municipal bodies.

 

Monday’s document also made other arguments as to why the bond purchase shouldn’t be required. Duncan filed it after attorneys representing the city and Heartland Park owner-operator Jayhawk Racing LLC asked the court last week to reject Imming’s request for a stay linked to his appeal.

 

They also asked that, should the stay be granted, Imming be required to buy bonds to cover potential damages resulting from it.

 

Jayhawk Racing said the bonds’ amount should be $5.29 million. The city indicated that, according to a formula under state law, the bonds should total $45.6 million.

 

Imming’s appeal is linked to a petition drive initiated after the city’s governing body voted Aug. 12 to authorize the purchase of Heartland Park and the expansion of its redevelopment district. The purchase was among steps required to carry out the city’s plan to buy Heartland Park and solve a problem regarding STAR bond debt.

 

Imming responded by initiating a petition drive that gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but the city filed a lawsuit challenging the petition’s legality.

 

Shawnee County District Judge Larry Hendricks on Nov. 12 ruled the petition invalid. Duncan filed an appeal Dec. 2 on Imming’s behalf in the Kansas Court of Appeals. He then filed a motion Dec. 9 asking that court to issue a stay prohibiting the city government from moving forward with its proposed purchase of Heartland Park while Imming’s appeal remained in progress.

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Topeka commits to profit guarantee, advertising dollars in NHRA contract

 

The city of Topeka since July has had a binding agreement with the National Hot Rod Association that requires the city offset profit shortfalls and pay advertising fees for the annual event at Heartland Park.

 

In part, the contract calls on the city to pay half of the shortfall if the event doesn’t make $1,831,000 and finance at least $340,000 a year for advertising.

 

That runs contrary to statements from city leaders, including city manager Jim Colson, who repeatedly have told the public the city won’t invest more money into the troubled racetrack after $5 million in Sales Tax Revenue bonds are issued and a new owner is selected from among four prospective bidders.

 

However, city attorney Chad Sublet said, every part of the contract can be renegotiated by the city or by whichever operator it selects. He also said the contract wouldn’t go into effect until the city is granted STAR bonds.

 

“The city and NHRA aren’t tied into that contract until and unless the STAR bond deal goes through,” Sublet said.

 

The contract states it is contingent upon the city acquiring full ownership of the track, a scenario that relies on the issuance of new STAR bonds, a move currently in jeopardy from an ongoing appeal and a Legislative Post Audit investigation.

 

Staff was expected to present to the Topeka City Council on Jan. 6 its recommendation for a new owner from among the four prospective bidders. However, city leaders weren’t sure a vote would be held that night.

 

If the city doesn’t have the rights to the track by Jan. 15, 2015, NHRA has the right, in its sole discretion, to terminate the agreement, according to the contract.

 

This was the 26th year the NHRA Kansas Nationals took place at Heartland Park, which typically happens in the last weekend in May.

 

The NHRA agreement briefly was posted on the city’s website as part of the request for proposal package. It was removed, however, because it contains a confidentiality clause and “should not have been posted online,” communications and marketing director Suzie Gilbert explained.

 

Topekan Leo Hafner at the Dec. 16 council meeting was critical of the city’s decision to pull the contract from public view, noting it came down after he inquired into it.

 

“To me, that smells a little bit,” he said, describing some of the provisions as shocking. “I mean, it sounds like we’re trying to hide something here. I just wanted everyone to be aware of that and I wanted it to be on the record, because I don’t think that has a sense of fair play. And I think the citizenry are starting to get a little suspicious of this government and what’s going on here.”

 

As a result of the confidentiality clauses, Sublet said, the city doesn’t definitively know whether the contract is similar to others across the country.

 

“We requested that, but because of that clause, it couldn’t be provided,” he said.

 

However, Sublet said, it was his understanding that Topeka’s contract is similar to others.

 

An NHRA spokesman declined to comment on the contract, noting a confidentiality clause included in it and its other contracts.

 

The 70-page contract holds the city and whichever operator it selects — with NHRA approval — “jointly and severally liable” on a number of provisions, including the profit guarantee.

 

Put another way: If the operator can’t make up the diffence, the city will have to come up with the cash.

 

However, Sublet said, the agreement only obligates the city/operator to half of the difference. If the weekend generated $1.5 million, for example, the city/operator and NHRA would split the $300,000 shortfall.

 

The contract doesn’t expressly say that, only that the city/operator will pay NHRA “one hundred percent of the difference between $1,831,000 and the actual total of shared” admissions, parking and title rights revenues.

 

The $1.8 million figure, Sublet said, is based on what the event historically has generated in Topeka.

 

He said his understanding is that the revenue guarantee is standard with NHRA contracts and the amount varies by racetrack.

 

Although the NHRA has exclusive responsibility for advertising and promotions, the funding for that campaign will come from the city/operator. The contract holds that amount to $340,000 each year, naming Visit Topeka Inc. and transient guest tax dollars as potential sources.

 

That paragraph needs to be read closely, Sublet said, because it only commits the city to “adequately support advertising and marketing.”

 

The contract language said the city/operator shall secure “sufficient” funds to promote the event, “which are expected to be in the amount of approximately $340,000.”

 

“Visit Topeka will make determinations about allocations,” Sublet said.

 

Visit Topeka historically has provided Heartland Park funding from transient guest tax dollars.

 

The phrase “sole and absolute discretion” — or something like it — comes up several times in the agreement, giving the NHRA great leeway in many decisions, all “in deference to NHRA’s expertise.”

 

For example, the NHRA has to approve whichever operator the city wants to select to operate the track, “provided the NHRA will disapprove an operator in good faith,” according to the contract.

 

The NHRA also has “sole discretion” to determine whether updates are needed at the track. If they are, the city/operator has to make the changes within the next 60 days, if that is reasonable.

 

Other provisions of the contract include that:

 

■ Heartland Park must retain, at minimum, all of the structure, fixtures, facilities and other items as they were for the 2014 event.

 

■ If the city/operator takes any action that prevents NHRA from conducting its annual event, the city/operator would have to pay for the damages to NHRA.

 

“(I)t would be reasonable to award, and NHRA shall be entitled to, the sum of Five Million Dollars ($5,000,000),” the contract reads.

 

■ Commit Heartland Park to give the NHRA “exclusive use and control” of the racetrack for 20 days surrounding the event.

 

■ NHRA will have rights to audit all books and records related to its event.

 

■ All proceeds owed from the event determined by the preliminary settlement have to be made within 48 hours. If not, the party owing funds will be liable for a $200 daily administrative fee.

 

■ Obligate the city/operator to 26 responsibilities and expenses, including ticket personnel, Internet services and corporate hospitality expenses. The NHRA, meanwhile, is responsible for 14 items, including key personnel for race operations, three ambulances and securing

credentials.

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City manager acknowledges Heartland Park deal might not go through

 

Topeka city manager Jim Colson on Tuesday evening made what appeared to be his first public acknowledgement that the city’s proposed purchase of Heartland Park Topeka might not go through.

 

Colson told reporters after that evening’s council meeting: “We’re going to continue to talk to the potential operators of the facility and see if we can get a deal through, but we’re realistic. It may be difficult to bring this thing home.”

 

Colson gave the council an update at Tuesday’s 26-minute meeting about the city’s efforts to find someone who will buy the financially struggling facility, or lease it and operate it for the city.

 

Colson then told reporters he was continuing to try to make the arrangement work but the matter had become something of a distraction, in light of everything else the city has before it.

 

“We have a $255 million budget and what we’re trying to do is solve a million dollar problem here,” Colson said. “We can’t get distracted from everything that’s going on in the city. So we think it’s good but we are committed to doing the right thing, and the right thing is what’s legal and what’s in the best interest of the city of Topeka.”

 

The city announced last month it had received proposals from four entities that met its required qualifications: MK Investments, Larry Sinks, Monopoly Acquisitions LLC and International Motorsports Entertainment and Development Corp.

 

Colson told the council Tuesday the city was continuing to have discussions with two of those, which he didn’t identify.

 

He said one had expressed concern over the status of legal challenges and procedural concerns involved, and continued to be interested but was currently “holding back.”

 

Colson said the other also feels concerned but is “pushing on” with its proposal.

 

He said he anticipated the city would get a letter of intent from that entity outlining what it intends to do.

 

Colson had hoped last month to see the city staff seek bids Tuesday to purchase the project’s STAR Bonds, then come back before the governing body with pricing to formally adopt those bids, but the city put those moves on hold to deal with other concerns.

 

Colson told council members the city’s legal staff was preparing to take part in a court hearing Wednesday morning linked to the purchase, while city officials planned to hold their initial meeting Friday morning with a legislative post-audit committee that’s looking at it.

 

The Kansas Court of Appeals plans at 10 a.m. Wednesday to hear oral arguments from both sides on Topekan Chris Imming’s motion asking the court to issue a stay prohibiting Topeka’s city government from moving forward with the purchase while Imming’s appeal of a recent court decision in the city’s favor remains in progress.

 

Imming is asking the court to overturn Shawnee County District Judge Larry Hendricks’ ruling invalidating a petition drive Imming coordinated seeking to put the purchase to a citywide vote.

 

Meanwhile, the Kansas Legislative Post-Audit Committee voted last month to look into whether the re-issuance of Sales Tax Revenue (STAR) bonds to finance the city’s purchase of Heartland Park Topeka meets state requirements,

 

Colson told council members Tuesday the city was continuing to try to close the purchase because — while the proposed deal is not perfect — it would benefit the city financially.

 

“We look forward to resolving everything one way or the other,” he said.

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Appeals court judges hear arguments on request for stay in Heartland Park case

 

Heartland Park will go dark” and its owner and operator, Jayhawk Racing LLC, likely will go out of business if the Kansas Court of Appeals approves a request by petition drive organizer Chris Imming, attorney Kevin Fowler told that court Wednesday morning.

 

Fowler, representing Jayhawk Racing, indicated the stay would prevent the city from carrying out its plan to purchase Heartland Park before the Feb. 28 deadline specified in the purchase agreement, which allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing if sales tax revenue (STAR) bonds involved haven’t been issued by then.

 

Attorney R.E. “Tuck” Duncan Jr., representing Imming, responded that Jayhawk Racing had already effectively failed.

 

“They say they’re going to lose their business,” he said. “They lost it long before this case was ever filed.”

 

Fowler, Duncan and attorney Catherine Logan — representing the city of Topeka — presented oral arguments during a 70-minute hearing before Kansas Court of Appeals Judges Steve Hill, Karen Arnold-Berger and Kim Schroeder.

 

Hill is serving as chief judge for the panel, which he said will decide Imming’s appeal “from start to finish.”

 

The judges heard arguments for and against Imming’s motion asking them to issue a stay prohibiting Topeka’s city government from moving forward with the city’s proposed issuance of STAR bonds and purchase of Heartland Park while Imming’s appeal of a recent court decision in the city’s favor remains in progress.

 

Imming’s appeal asks the court to overturn Shawnee County District Judge Larry Hendricks’ ruling invalidating a petition drive Imming coordinated seeking to put the purchase to a citywide vote.

 

Hill said the court would issue a written decision on the stay request relatively soon, though he didn’t specify when.

 

Hill said he appreciated the vigor and confidence attorneys showed in making their arguments Wednesday.

 

He made reference to the presence of reporters from four media outlets in the courtroom, and said the case appeared to have drawn a lot of interest.

 

Hill added, “We understand that this is an important question and there is a lot riding on it.”

 

Duncan asked the judges to issue any order they deem appropriate to preserve the “status quo” until the case is resolved,

 

He said a public vote on whether to allow the purchase would no longer be applicable if the city had already carried it out, adding that the court in such a situation would be looking at how to “put the toothpaste back in the tube.”

 

In response to Fowler’s assertion that CoreFirst would foreclose on Jayhawk Racing if the stay was granted, Duncan said Jayhawk Racing’s options include asking CoreFirst for a 90-day extension past the Feb. 28 deadline.

 

Fowler and Logan responded that CoreFirst had no obligation to grant such an extension.

 

Duncan acknowledged that for the court to issue the stay he needed to make a “substantial” case that his client, Imming, would be able to prevail on the merits of the appeal.

 

Fowler said that if the court granted Imming’s requested stay it would send a message to CoreFirst that here was a “substantial likelihood” that Imming would win the case on its merits.

 

Jayhawk Racing would receive $2.2 million and then cease to operate if the purchase goes through, Fowler said.

 

Logan told the judges that if the city didn’t carry out the purchase, it would:

 

■ Remain “on the hook” to pay $10.2 million worth of outstanding STAR bond debt, which would be covered by future STAR bond revenues under the city’s proposed plan.

 

■ See the Heartland Park property, which has an estimated value of $15.3 million, foreclosed upon by CoreFirst.

 

Duncan addressed requests by the city and Jayhawk Racing that the court — should it approve the stay — require Imming to secure enough money in bonds to cover potential damages.

 

Damages to Jayhawk Racing — should the stay result in the STAR bond deal falling through — were estimated at $5.29 million, while damages to the city were estimated at $45.6 million.

 

Duncan said the bonds shouldn’t be required because the amounts put forth by the city and Jayhawk Racing were “speculative.”

 

The judges heard testimony Wednesday from Duncan, then Logan, then Fowler before Duncan received time for rebuttal at the end.

 

As someone who has been married 40 years, Duncan joked, it was “nice to get the last word.”

 

Hill replied that the judges would actually probably get the last word.

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Appeals Court issues temporary stay order in Heartland Park case

 

The Kansas Court of Appeals Thursday temporarily granted Topekan Chris Imming’s motion seeking a stay in the Heartland Park case while not making the stay last as long as Imming had requested.

 

Court of Appeals Judge Stephen Hill issued a one-paragraph order Thursday morning granting the stay, which prohibits Topeka’s city government from moving forward with its proposed issuance of STAR bonds and purchase of Heartland Park until 10 days after the point when Imming, the city of Topeka and Jayhawk Racing LLC have all filed briefs in the case.

 

Hill wrote that appellant Imming’s brief is due by Monday, Jan. 12, while briefs from the city and Jayhawk Racing -- the appellees -- are due 30 days after the filling of Imming’s brief.

 

“In order to allow for meaningful appellate review and due to the importance of preserving the democratic process, the district court’s decision, in all respects, is hereby stayed until 10 days after the filing of both Appellees’ briefs,” Hill wrote.

 

Hill issued the order on behalf of himself and fellow Court of Appeals Judges Karen Arnold-Berger and Kim Schroeder.

 

The order stopped short of granting Imming’s motion asking the judges to issue a stay in the case that would remain in place so long as Imming’s appeal of a recent court decision in the city’s favor remains in progress.

 

Imming’s appeal asks the court to overturn Shawnee County District Judge Larry Hendricks’ ruling invalidating a petition drive Imming coordinated seeking to put the purchase to a citywide vote.

 

Hill is serving as chief judge for the panel, which he said will decide Imming’s appeal “from start to finish.”

 

Kevin Fowler, an attorney representing Jayhawk Racing told judges during a hearing Wednesday that Heartland Park would “go dark” and Jayhawk Racing would likely go out of business if the court issued the stay in the form Imming requested.

 

Fowler indicated a stay of the duration Imming requested would prevent the city from carrying out its plan to purchase Heartland Park before the Feb. 28 deadline specified in the purchase agreement, which allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing if sales tax revenue (STAR) bonds involved haven’t been issued

 

Fowler hadn’t returned a telephone message left by The Capital-Journal at his law office Thursday asking what the ramifications of the stay order Hill issued that morning would be for Jayhawk Racing and Heartland Park.

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Topeka Capital-Journal Editorial: City doing too much work in the dark

 

The city’s handling of its efforts to acquire Heartland Park Topeka and keep the National Hot Rod Association coming to town every spring certainly hasn’t been something to inspire public confidence in the cause.

 

At the beginning of their quest, city officials began working on a plan to issue another round of STAR (sales tax revenue) bonds to finance acquisition of the troubled racetrack long before they let the public know something of the sort was in the works. Now, most Topekans have recently learned about a contract between the city and NHRA that outlines the city’s liabilities in the event future drag races don’t provide the profit margin NHRA thinks it needs.

 

The details of that contract are very interesting indeed, but most interesting is the fact the pact has been in effect since July, and Topekans only now know the contract exists and what obligations they might incur under the deal.

 

Granted, the agreement was posted briefly on the city’s website when it was requesting proposals from people or firms interested in purchasing the track or contracting to operate it once the city had acquired it through the issue of new STAR bonds. Most Topekans, however, never saw the contract or learned any specifics of the deal.

 

City officials say the agreement was removed from the website because it contained a confidentiality clause and shouldn’t have been posted in the first place.

 

Since when are government contracts confidential?

 

If the NHRA has a problem with the details of the contract becoming public knowledge, too bad. If city officials have a problem with the details becoming public knowledge, too sad. They should know better.

 

The NHRA is no different that any other organization or individual with which the city does business. Contracts entered into on behalf of the public are public information. If the NHRA sought confidentially in the matter, city officials should have simply said they couldn’t do that.

 

City attorney Chad Sublet has said the contract can be renegotiated by the city or the operator it selects for the racetrack, and that the city and NHRA aren’t tied to the contract unless the STAR bond deal goes through.

 

Perhaps, but the contract certainly was drafted with the expectation the STAR bonds would be issued and the city would purchase Heartland Park Topeka. City officials have said they would sell the track to a qualified purchaser who could keep NHRA coming to Topeka or contract with an operator who could do the same. City officials have said repeatedly the city wouldn’t operate the track or put money into its operation after the STAR bonds were issued.

 

So why all the secrecy?

 

Our elected and appointed city officials can’t do their work in the dark and then expect the public to trust them when the lights go on.

 

Members of The Capital-Journal Editorial Advisory Board are Gregg Ireland, Mike Hall, Fred Johnson, Ray Beers Jr., Garry Cushinberry, John Stauffer, Frank Ybarra and Sally Zellers.

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Topeka Capital-Journal now digging up Topeka City Manager Jim Colson's past failures

 

NHL hockey in Arizona an albatross for Glendale taxpayers

 

GLENDALE, Ariz. — The ugly truth of the Arizona Coyotes and St. Louis Blues clash was established 26 seconds into the first period, when a puck smashed Coyotes center Antoine Vermette’s face.

 

The bloody turn of events served as a metaphor for the National Hockey League franchise’s life-sucking drain on Arizona taxpayers. It reflects the slasher-movie record of a city government chasing good money after bad — which has application to Topekans who paid millions of dollars to subsidize the floundering Heartland Park Topeka motorsports facility and for all Kansans now being asked to contribute $17 million to bail out the venue’s major investors.

 

On the ice, Vermette deposited a pool of blood behind the net and left a trail of red blotches on the playing surface, marking a path to the bench. The gory evidence was briskly removed with an attendant’s snow shovel. Like public officials stubbornly unwilling to pull the plug on costly economic development, Vermette returned to action. He had to be stitched up twice during the game. Such tenacity was overshadowed by Blues captain David Backes’ four goals — a first for any NHL player this season — amid a demoralizing 6-0 strafing at Gila River Arena in the suburbs of Phoenix.

 

Jacob Page and Kirstin Keck, former Indiana residents living in Prescott, Ariz., couldn’t get enough of it. Keck finds pleasure in the physical demands of a game in which referees make no effort to halt fights. The couple sat behind the Blues’ bench, and St. Louis player Vladimir Tarasenko presented Page his stick after the final horn.

 

“It was awesome,” Page said. “It’s nice the hockey teams travel so fans around the country can see their favorite team.”

 

Sarah Hall, a graduate of Highland Park High School in Topeka and a Coyotes season-ticket holder, joined friends Chelsea and Tony Stedry at the front of the line more than an hour before game time. Hall first was inspired by the sport while watching the Topeka Scarecrows, but the Coyotes renewed her affinity for the fast-paced action.

 

“This team is very fan-friendly,” said Hall, a Scottsdale, Ariz., resident with shafts of hair dyed to match the team’s primary red hue. “I love hockey.”

 

 

 

Public hockey project

 

Heart-pumping feelings of pride evoked by these fans is the currency of sports played at the highest level. Loyalty of hardcore fans, however, can mask economic frailties of those enterprises.

 

The past six years of the professional hockey franchise — transported nearly 20 years ago from Winnipeg, Manitoba’s glacial flatlands to the Valley of the Sun — has been an exhausting soap opera that exposed perils of publicly financing sports enterprises and the risk of a municipality deviating from its core purpose.

 

The brunt of that trauma has fallen upon taxpayers in the team’s hometown of Glendale — a former farming community that is Arizona’s fifth-most populous city. Its residents historically were more likely to think of using ice for a margarita than as a platform for sporting entertainment.

 

The city’s movers and shakers convinced themselves that taxpayer financing of pro hockey, football and baseball facilities would deliver commercial expansion to Glendale. Projections of wealth creation were jaw-dropping. The city approved $155 million in bonds for a hockey arena in 2003 and $200 million in bonding in 2008 for the Camelback Ranch spring training facility for the Chicago White Sox and Los Angeles Dodgers. Glendale put up $10 million for a $455 million stadium for the NFL’s Arizona Cardinals, which has its own funding mechanism.

 

The city’s business base expanded, but growth in housing, retail, lodging and office space affiliated with these franchises fell short of the prophecy issued by high-priced consultants and aggressively embraced by city officials.

 

In a two-year span, Glendale was subsequently forced to pay $50 million to the NHL simply to keep the Coyotes in town. The Camelback deal wouldn’t make sense to a child trading baseball cards with friends. The baseball complex, owned by Glendale but mysteriously located in Phoenix, costs Glendale taxpayers $17 million annually. The teams pay the city a head-scratching $1 each year.

 

“All the stuff that had been done in the past was basically built on a house of cards,” said Glendale Mayor Jerry Weiers, who has been in office two years. “When the economy got bad, they really started coming down. We really got hit hard.”

 

“We’re spending an awful lot of money and getting small results,” he said. “The question is: Will we have the will of the council to do anything about it?”

 

 

 

Financial collapse

 

In the throes of a national recession in 2009, the Coyotes’ owner inflated chaos by placing the team in bankruptcy. In 2011 and again in 2012, taxpayers of Glendale paid the $25 million annually to bankroll a team managed by a league convinced it needed to make a mark on 4 million potential fans.

 

Glendale’s reserve fund of $72 million in 2006 slipped to $11 million by 2012.

 

Massive subsidies triggered downgrades in the city’s bond rating — the most recent in March by Standard and Poor’s, which pointed to weak city management practices and budget imbalances. Glendale’s city council adopted a 2-percent increase in the property tax rate in June. Critics attempted, but failed, to put spending on hockey to a citywide vote, while the Goldwater Institute challenged whether the city’s strategy to pay “arena management fees” to a prospective owner violated the Arizona Constitution’s prohibition on public subsidies, categorized as gifts, to private businesses.

 

Confronted with a projected $30 million budget shortfall resulting from the hockey franchise disaster, the council cut 100 staff positions and later made permanent the “temporary” sales tax increase of 0.7 percent adopted to keep the city afloat financially. Fees for after-school programs and swimming lessons went up. Courthouse and library building projects were postponed. Routine road maintenance was delayed.

 

“There have been a lot of things we have pushed off and kicked the can down the road because we haven’t had the monies to take care of the things we should,” said Weiers, who aside from being the Glendale mayor also is a former Arizona state legislator.

 

In June, the mayor asked the state’s attorney general to investigate a secret, potentially illegal meeting between a councilman and the Coyotes’ attorney that provided the hockey team’s management with information about the city’s position in contract negotiations. The city’s attorney later bolted to work for the Coyotes, sparking ethical scrutiny.

 

 

 

Colson a player

 

The spiral of this Coyotes’ franchise serves as a tutorial for Topeka as city officials maneuver toward a complicated financial arrangement designed to keep Heartland Park from plummeting to foreclosure and compounding bond-debt challenges at City Hall.

 

Topeka city manager Jim Colson, a former Glendale city official, is intimately familiar with the Coyotes’ saga. He touted moving the team from Phoenix to Glendale among his most significant career achievements. He was at the table when the city agreed to finance Gila River Arena for the hockey team. He was deputy city manager of Glendale from 2009 to 2012 as the financial crisis imploded.

 

Colson defended one proposal to sell the NHL team, arguing the city had no option since it had to fulfill obligations to pay arena bond debt. The club’s sale, he said, “puts us in the best possible situation moving forward.” One analysis of that deal indicated the city would lose $9 million annually, even if the Coyotes went to the Stanley Cup Finals every year and the arena booked 30 sold-out concerts each year for two decades.

 

Colson spoke with the same conviction in Topeka about the proposed state taxpayer bailout of the city of Topeka, which holds about $8 million in bond debts on Heartland Park. The plan also would come to the aid of Topeka racetrack owner Ray Irwin and a long-struggling Topeka lending institution, CoreFirst Bank and Trust.

 

“This is the most important thing,” Colson said. “We want to do what’s best for the city of Topeka. We certainly wouldn’t go forward with something that we felt wasn’t defensible.”

 

Colson was hired to lead Topeka’s city government in August 2012, at the height of Glendale’s turmoil with the Coyotes. He bailed out of Glendale’s government apparatus along with the mayor and city manager.

 

Despair about the fractured financial promise of Heartland Park — revenue to pay the current public bond debt for the track never met glowing projections, leaving the city to subsidize payments for a decade — was a festering reality when Colson arrived in Kansas.

 

He has helped cobble together and now spearheads advocacy for issuance of $5 million in new bonds for Heartland Park. The arrangement will primarily draw upon state sales tax revenue to pay off old and new bonds while bailing out Irwin and CoreFirst.

 

 

 

Hockey

 

pinwheel

 

In 2008, stories began circulating that the Coyotes franchise was uncontrollably hemorrhaging financially. The NHL secretly obtained operational control of the team from owner Jerry Moyes and began paying the club’s bills. Hours before the NHL was to present Moyes with an offer in 2009 to unload the Coyotes to Chicago Bulls and White Sox owner Jerry Reinsdorf, Moyes thrust the team in bankruptcy with the intent of selling to Canadian billionaire Jim Balsillie, which would move the team to Hamilton, Ontario.

 

Legal wrangling in Arizona led to identification of potential buyers: Reinsdorf, a consortium known as Ice Edge Holdings and Balsillie. A bankruptcy court cut out Balsillie. The NHL bought the club for $140 million and aggressively fought relocation of the franchise out of the Phoenix area.

 

The NHL negotiated a lease with the city of Glendale, owners of Gila River Arena. Glendale officials approved Reinsdorf’s plan to buy the club, but that deal fell apart in 2010, and the city turned to Ice Edge. The Ice Edge option also crumbled in 2010.

 

Bids by Ice Edge and Reinsdorf had been controversial because they were conditional on Glendale taxpayers covering any losses the Coyotes might incur — and few thought it could operate close to the black.

 

The city of Glendale agreed to pay $25 million to cover revenue shortages in the 2010-11 season to prevent the NHL from packing up and leaving the desert. Chicago businessman Matt Hulsizer struck a deal with Glendale and the NHL to buy the Coyotes. That unraveled in 2011 when the Goldwater Institute threatened legal action over legality of payments Glendale would make to Hulsizer in advance of his purchase of the club.

 

 

 

Taxpayers the real losers

 

Kurt Altman, an attorney for the Goldwater Institute in Phoenix, said the organization’s four-year legal fight with Glendale officials over the NHL franchise boiled down to access to records that could shed light on whether City Hall was breaking a ban on gifting — cash, in this case — to hockey franchise suitors.

 

“Glendale basically stiff-armed us for a long time,” Altman said. “The taxpayers of Glendale really are the losers in this.”

 

In desperation, Glendale city officials committed a second $25 million payment to cover operations in the 2011-12 season. And the city continued to pay the $12.6 million in debt service on arena construction bonds. This financial picture was far different from what was pitched to citizens in 2003.

 

“The council was told it wouldn’t cost the city anything. It would all be paid with sales tax,” said Ian Hugh, a member of Glendale’s city council. “How can you be that far off?”

 

An agreement to sell the franchise to former San Jose Sharks owner Greg Jamison fell through in 2013. That package would have guaranteed the team stay in the Phoenix area for 20 years, in exchange for taxpayer subsidies — framed as an annual arena-management fee of $14.5 million.

 

Skeptics calculated that by expiration of the Jamison deal in 2033, Glendale’s 226,000 residents would have paid $1,200 each, or $270 million in total, to maintain an NHL presence in the city.

 

Retired economics professor Joe Cobb, a Glendale resident who spent his youth in Wichita, worked to gain signatures on petitions for a referendum on the city’s plan to pay dearly to support Jamison's operation. Given two weeks to gather 2,000 signatures, he fell short. But he views public construction of Gila River Arena as a debacle.

 

“If a city owns the arena, they have the city by the testicles,” Cobb said. “I cannot think of any reason why taxpayers should bail out a private business — even if it claims to be a sporting activity.”

 

 

 

Deal may save Coyotes

 

The NHL reluctantly began to weigh prospects of moving the franchise to Seattle, but instead sold the club to IceArizona, composed of a group of Canadian investors. That led to a contentious 4-3 vote by the Glendale City Council for approval of a 15-year lease agreement with that group. The plan committed the city to payment to the owners of an annual $15 million arena management fee.

 

Gary Sherwood, a Glendale city council member who helped broker the final deal with the Coyotes, said the city’s hand was forced by the reality of huge annual debt payments on Gila River Arena.

 

He blamed the predicament on three factors: the franchise’s 2009 bankruptcy, the national recession and a city staff ill-equipped to handle the complexity of the quagmire.

 

Sherwood, the target of a failed recall in response to his vote in favor of a tribal casino in Glendale, said the best strategy from a revenue standpoint was to maintain the Coyotes as the arena’s anchor tenant because that activity supported adjacent bars and shops in the Westgate development. When the Coyotes or Cardinals aren’t in town, the Westgate bars and shops are typically vacant.

 

“What else are you going to put in there?” Sherwood said. “We needed to keep it from being boarded up.”

 

He said the biggest lesson drawn from Glendale’s experience was that sports facilities couldn’t be counted on as a foolproof tool of economic development.

 

“In summary, municipalities don’t make money on sports franchises,” he said.

 

 

 

On thin ice

 

There is a clause in the contract stipulating the Coyotes’ owners could move the team elsewhere if the team lost $50 million within five years. It swiftly will surpass that benchmark, and revenue isn’t flowing to the city as anticipated. This year, Glendale was able to recoup $4.4 million from parking fees, ticket sales, naming rights and nonhockey events at the arena — far below the projected $6.8 million.

 

On Dec. 31, IceArizona sold 51 percent of the Coyotes to Philadelphia hedge fund manager Andrew Barroway for $152 million. He had attempted last year to purchase the New York Islanders.

 

IceArizona President and CEO Anthony LeBlanc said the franchise was on pace to turn a profit in two years.

 

Jim Rogers, owner of three youth ice rinks in the metropolitan area, including the Ice House in Phoenix, said most observers believe the critical mistake was moving the NHL team to an arena in Glendale — far from the Phoenix hub. He is critical of the franchise’s reluctance to market itself to blue-collar fans, many of whom are transplants from colder climates and hockey-abiding cities. Arizona’s attendance, an average of 12,999 through 20 games, ranks 28th in the 30-franchise league.

 

Rogers said bleeding of local taxpayers couldn’t go on indefinitely.

 

“I’d hate to see Phoenix without an NHL team,” he said. “If they change the way they reach out to the valley, it will stay.”

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Heartland Park investors racing to catch financial bailout

 

The capital city’s political elite rallied nearly a decade ago to secure public financing for improvements at Heartland Park Topeka’s motor sports facility, and confidently proclaimed the investment key to jump-starting business development near the track.

 

Democratic Gov. Kathleen Sebelius signed the bill in 2005 authorizing issuance of bonds to pay for upgrades at a track promising to deliver blockbuster events and substantial job creation. A consultants’ study predicted Heartland Park was on the cusp of producing a near-tripling impact on the local economy. The Topeka City Council voted without dissent in 2006 to approve $10.4 million in taxpayer-backed bonds for Heartland Park *— doubling down on a $5 million investment by the Topeka government two years earlier.

 

Jayhawk Racing owner Raymond Irwin commemorated the windfall for his Heartland Park venture by chauffeuring Greater Topeka Chamber of Commerce members on 100-mph rides in a race car.

 

“This puts us in the top level of the game of motor sports,” said John Nave, a Topeka City Council member at that time.

 

Swagger exhibited by so many, so long ago now appears distressingly misplaced.

 

False start on bonds

 

The economic development district created to pay off the bonds for Heartland Park produced so little sales tax revenue, the city’s residents have been forced to subsidize debt payments from the start. The city has met the shortfall on these sales tax revenue (STAR) bonds by drawing about $350,000 annually in property tax revenue. The city’s existing bond debt payments are expected to balloon this year to $1 million.

 

Local, state and federal government operatives poured resources into Heartland Park, but ancillary development adjacent to the track — a reward municipalities routinely covet when throwing money at private businesses — never occurred.

 

The national recession frequently has been blamed for Heartland Park’s death spiral. Others speculate the track might have been victimized by dwindling consumer demand for dirt, drag or show-car racing. Critics who fault Irwin accuse him of ineffective race marketing, inability to draw enough nonracing events and possession of a difficult personality. As Heartland Park bailout schemes were considered, Irwin has threatened to sue the city more than once.

 

Dan Stanley, who served as interim Topeka city manager, said he attempted to get to the bottom of Heartland Park’s shortcomings in 2011 by requesting access to Irwin’s track operation records. Stanley said an audit would have helped guide reform of development strategies, but he was surprised when Irwin declined to show his ledgers to the city.

 

“He created a budget problem, and we couldn’t even look at the books,” Stanley said. “We were threatened with legal action if we tried. Any time I lifted a rug out there, there was something nasty underneath it.”

 

The city of Topeka remains owner of Heartland Park, but Irwin’s Jayhawk Racing runs the business and has buried the operation in a mountain of debt that could lead to bankruptcy or foreclosure.

 

“It’s like a house with seven mortgages on it to seven different mortgage companies,” said Chad Sublet, the city's attorney. "On paper, yes, we own it. But it is mortgaged up.”

 

Irwin has an unusual clause in his contract with the city, allowing him to take possession of the track once STAR bonds were paid. The city plans to buy out Irwin’s so-called reversionary interest for more than $2 million.

 

Bailout boiling point

 

Debate about Heartland Park’s future has proved to be polarizing. There are vocal Topekans who would be content if Heartland Park crashed in a spectacular manner. Equally persistent people view the racing complex as a Kansas gem worth preserving at any cost.

 

Robert Wayman, president of the Kansas City Region’s Porsche Club of America and a Heartland Park racer, said the track was considered one of the most challenging road courses in the Midwest.

 

“We believe a reinvigorated Heartland Park can once again become the destination of choice,” Wayman said.

 

“It’s an awful big gamble,” said Don Weick, a Topeka opponent of the bailout. “People are sure against it. I guarantee that. Twice this track went under. Today, is the third time going to be the charm?”

 

“We need racing in Topeka,” countered Jill Ables, who has volunteered at numerous track events. “I don't want Heartland Park closed. There’s got to be a way.”

 

Crafting a clever resolution to Heartland Park’s debt burden is overdue, but timing of the decision by Gov. Sam Brownback’s administration to green-light a $17 million contribution to the cure could be considered awkward. On Thursday, the governor must explain to the 2015 Kansas Legislature how the cash-strapped state government should deal with a projected $715 million budget deficit during the next 18 months.

 

Champions of issuing STAR bonds to pay remnants of the old bonds for the racetrack and to buy out Irwin were surprised by a decision in December by the joint House-Senate auditing committee to examine the legality of the proposed Heartland Park deal.

 

The pending inquiry rattled advocates to the point Senate Minority Leader Anthony Hensley, D-Topeka, was told through intermediaries that Department of Commerce Secretary Pat George would withdraw the agency’s blessing of the deal if Hensley couldn't persuade the GOP-led committee to abandon its audit of STAR bonds for Heartland Park. On Sunday, Hensley said he was convinced the message was genuine.

 

“Secretary George’s threat to compel a legislative committee to reverse an action they’ve already taken is egregious and an affront to the legislative process. It begs the question: What will this audit uncover?” Hensley said.

 

George said the senator’s description of the situation was inaccurate.

 

“No decision, tentative or otherwise, has been made on the project,” he said. “It is unusual for a legislator to strongly oppose a project requested by the largest community in his district, therefore, it is only appropriate that we fully consider his concerns before proceeding with the deliberation process.”

 

Meanwhile, Topeka City Councilman Chad Manspeaker said city manager Jim Colson asked him to divert money from the city’s guest tax fund to hire a well-connected Republican lobbyist to usher the STAR bond package through the Brownback administration. Irwin typically has received $350,000 yearly from that fund to market races. Manspeaker said he declined Colson’s request to appropriate guest-tax revenue for lobbying of state government officials.

 

“The deal has stunk from the beginning,” Manspeaker said.

 

Colson said David Kensinger, a former Brownback chief of staff and Heartland Park lobbyist who fell under FBI scrutiny last year regarding allegations of influence peddling, was identified by organizers of the STAR bond plan as someone skilled enough to maneuver the deal through the Department of Commerce. Kensinger didn't respond to a request for comment about the city manager’s statement.

 

CoreFirst sitting pretty

 

There is no ambiguity about the future of Irwin’s racing business in Topeka. His company is insolvent and his days as a track mogul in Kansas are numbered. CoreFirst Bank and Trust, under pressure to come to terms with a portfolio festering with millions of dollars in bad loans to Irwin, has legal authority to take over Heartland Park in February. CoreFirst will be paid in full via the new STAR bonds or it will seize the track and sell it off. Deeds transferring the property to the bank were signed by the city and Irwin in June. By placing deeds in escrow, the city and Irwin bought time to complete a rescue package.

 

Topeka government leaders have known for years of Heartland Park’s malnourished condition, but they weren’t eager to accept the reality a rebound might never come. Without financial intervention by the state, the city stands to be stuck paying existing bond debt on the track that would cost local taxpayers $10.8 million to eradicate.

 

A Topeka property tax hike or equivalent reduction in city services would be required to cover $1 million in annual bond payments. And, somebody else — not the city — likely would own Heartland Park.

 

The STAR bond strategy has been endorsed by Colson, a majority on the Topeka City Council, CoreFirst, Irwin, the Department of Commerce, local restaurant and hotel business interests, the Greater Topeka Chamber of Commerce’s top executive, and various racing association leaders.

 

Assuming the plan proceeds in a timely manner, Topeka would issue about $5 million in new STAR bonds. The designated sales tax district in Topeka contributing revenue to payment on bonds would be dramatically expanded to include more businesses. All state and local sales tax revenue in this enlarged area of Topeka would be devoted to paying old and new bond debt. The idea is to score about $17 million — most of it state sales tax revenue — and retire the Heartland Park debt in 12 years. City officials said the proposed revenue stream is solid.

 

“It’s not built on a hope and a prayer,” Colson said. “It's built on actual historical numbers.”

 

Irwin would be handed $2.4 million if the STAR bond sale goes through, but he is obligated to cut checks for $300,000 to CoreFirst and $180,000 to the city of Topeka, and to settle with others. CoreFirst would separately pocket $1.9 million in STAR bond cash to clear the remainder of Irwin’s debt to the bank. The federal Small Business Administration and the state Department of Commerce would clear $500,000 each from a bond sale.

 

‘Reversionary’ interest

 

Significantly, access to STAR bond cash would put the city in position to purchase Irwin’s contractual right to assume control of Heartland Park — all 700 acres — at the moment bond debt was paid. That clause in Irwin’s contract establishes his reversionary interest in Heartland Park. The arrangement might have been reasonable if Irwin continued to successfully operate the track. It would be galling if the city salvaged Heartland Park and Irwin snatched the jewel back years from now.

 

Colson said the commerce department declined to authorize more STAR bonds in connection with Heartland Park unless clear title to the property was purchased from Irwin. The city would work to sell the facility to a new owner or operator. Four proposals were submitted to City Hall, but details of those blueprints for success remain confidential. It appears contract talks continue with at least two applicants.

 

“We want to do what’s best for the city of Topeka,” said Colson, who became Topeka’s city manager in 2012. “Expansion of the STAR bond district allows us to address some debt issues that we didn’t have a reliable source of funds, other than property taxes, to pay. The STAR bond district, as it was formed in 2005 was, I’ll say in retrospect, too small to service the debt of the facility.”

 

Doug Gerber, the city’s finance director, said resolving the city’s budget hole by plugging in $16.4 million in state sales tax revenue and $1.6 million in local sales tax revenue was a 10-to-1 deal that ought not be dismissed. The arrangement clears the city’s obligations to Heartland Park by 2025.

 

“That’s a deal any individual and certainly any city should be willing to make,” he said. “We’re asking 3 million Kansans to participate instead of 130,000 Kansans.”

 

Heartland Park, which opened in 1989 and has received millions of dollars in government aid, features a quarter-mile drag strip, a 2.5-mile road course and a three-eighths-mile dirt oval track. In 2003, Irwin bought into the business and added 33 garages, a technology building and a facility for road course events.

 

Growth the new mandate

 

Colson said the new operator of Heartland Park had to bring a fresh business approach to the property. The city manager said he learned the imperative of new commercial development surrounding taxpayer-supported sporting venues while working in municipal government in Glendale, Ariz.

 

Glendale was staggered by bond debt issued to support the NHL’s Arizona Coyotes and a separate deal to build spring training baseball parks for the Chicago White Sox and Los Angeles Dodgers. Construction of these facilities and ongoing subsidies have cost Glendale taxpayers more than $400 million. In areas around these facilities, development of office space, shopping and housing fell below expectations of consultants offering rosy analyses.

 

He said the Heartland Park correction would emphasize development of land within the racing property.

 

“We’re very much focused on someone who will bring a comprehensive approach to this, because we can’t have a facility that is really built around one weekend,” he said, referencing the popular NHRA drag event. “We’re really focused on working with attracting somebody to take over the track who really understands this is a 12-month business — for this to work, to be an economic tool.”

 

All bidders for the track expressed reservations about the agreement Colson reached with the NHRA to conduct races in May at Heartland Park for the next three years in exchange for an annual guaranteed payment of $1.8 million. Colson believes the deal he unilaterally negotiated with the NHRA would render the track operator liable for the guarantee. Others are convinced the document could make the city responsible for the guarantee.

 

Colson said if proposals to buy Heartland Park from the city or to enter into a long-term lease didn’t come together, it would serve as a sign the racetrack no longer was economically viable.

 

“Under no circumstances will the city operate it,” the city manager said. “Our position is very clear. If there is nobody who makes their living running racetracks who is interested in running Heartland Park, we would be silly if we tried to do it. It would be a recipe for disaster.”

 

In August, the Topeka City Council voted to authorize purchase of Heartland Park and expansion of its redevelopment district in anticipation of STAR bonds being issued.

 

Petition sparks legal fight

 

The Heartland Park debate inspired a petition drive designed to compel a public vote on the STAR bond plan. Chris Imming, of Topeka, gathered sufficient signatures to place the question on a citywide ballot, but the city filed suit to spike the vote. A Shawnee County District Court judge ruled the petition flawed.

 

Imming appealed to the Kansas Court of Appeals, which issued a temporary injunction blocking issuance of STAR bonds for Heartland Park and implementation of payments to Irwin and CoreFirst.

 

Irwin and the city also attempted to thwart Imming by claiming he should have to buy millions of dollars worth of bonds to cover potential damages resulting from delays in closing the STAR bond deal. The city determined Imming should post a $45 million bond, while Irwin’s Jayhawk Racing requested a $5 million bond.

 

Imming said Heartland Park’s attorney had let it be known a separate lawsuit would be filed if a public vote was authorized by the Court of Appeals. Colson said he had a “high level of confidence” the city would have been sued by Irwin if it hadn’t opposed the citizen vote.

 

“The thought of lawsuits doesn’t scare me as much as it seems to scare other people,” Imming said. “I do think we have a responsibility to do the right thing.”

 

Tuck Duncan, a Topeka attorney representing Imming, said he was frustrated by the unwillingness of City Hall and the Department of Commerce to share documents related to Heartland Park. City officials have dodged questions about what they know of Irwin’s financial status and refused to release information about bids by prospective track operators. Commerce officials have frustrated attempts under the Kansas Open Records Act to obtain a copy of the city’s application for STAR bonds.

 

“That request has not been fulfilled, and currently the attorney general’s office is following up on it,” Duncan said.

 

Leo Hafner, a Topekan and opponent of the STAR bond solution, said he was perplexed the NHRA agreement was posted to the city’s website and abruptly taken down. He said city officials were behaving as if they wanted to hide information.

 

“I just don't think that’s a sense of fair play. The citizenry are starting to get a little suspicious of this government and what’s going on here,” Hafner said.

 

Outside looking in

 

Foundation of the deal was put together behind closed doors over many months with contributions from Irwin attorney John Frieden, George and Colson. Frieden didn’t return calls. Colson submitted to an interview. George praised the STAR bond endeavor in a letter affirming state support for the project. Irwin said he didn’t want to comment at this time because the question of a public vote remained before the Court of Appeals. Kurt Kuta, president and CEO of CoreFirst, said he preferred not to discuss the issue.

 

“At this time,” Kuta said, “the bank is meeting its obligations in the agreement and, as a result, does not have any need to comment.”

 

George’s letter to the city in 2014 lauded the STAR bond plan as recognition Heartland Park had a “significant economic impact on the state.” He expressed confidence “timing is right to extend the STAR bonds district, increasing economic development around the track and along Topeka Boulevard.”

 

City Councilwoman Karen Hiller, who has expressed appreciation for the STAR bond solution, said the communications strategy deployed by Colson on the plan fell short. It is more difficult to secure community backing for complex ideas quickly thrust upon taxpayers, she said.

 

The elixir for Heartland Park surfaced in June, after the city rejected Irwin’s plea for more marketing subsidies and Irwin’s offer to sell out to the city. The manner in which the rescue framework was unveiled by Colson intensified opposition among a cadre of Topekans skeptical the deal does little more than serve favored business interests.

 

“That, to me, is a government bailout,” said Jack Woelfel, a former Topeka councilman who declared the plan inequitable. “Are you ready, as a council, to do the same thing for a small engine repair shop down the street? A candy store? I sincerely doubt you will do that. In this instance, is Heartland Park racetrack considered too big to fail?”

 

Topeka Mayor Larry Wolgast offered a more charitable perspective on presentation of the deal to Topekans. Colson had been involved in a Heartland Park fix for two years, but didn’t share the financing arrangement with the public until less than a week before the city council was scheduled to take its first vote on the plan.

 

“In hindsight,” Wolgast said, “it would have been beneficial to involve the community more so they are in tune with the decisions that were made.”

 

Wolgast is an unapologetic advocate of the STAR bond plan. It is simple economics, he said. The deal is capable of providing Kansas with the best opportunity to identify a viable owner for Heartland Park and continue to deliver an estimated $100 million or more annually in economic activity to the state.

 

Questions about the legality of the STAR bond plan and outcome of Imming’s push for a citizen vote remain, but there appears to be sufficient support on the city council to adopt the initiative.

 

Topeka City Councilman Nathan Schmidt said it would be “grossly irresponsible” for detractors to denounce the 2015 STAR bond plan by comparing it to the unsuccessful 2006 STAR bond issue.

 

“This is not a high-risk venture,” Schmidt said. “It is the best possible path out of a situation that is not good for anyone.”

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City manager regrets timing of Heartland Park vote

 

City manager Jim Colson said Tuesday he regrets the timing of the city’s vote to buy Heartland Park, but he believes the deal still is in the residents’ best interest.

 

Colson spoke at the Topeka Independent Business Association’s monthly luncheon Tuesday. He didn’t dive much into policy particulars, but seemed focused on explaining his view of how the city should make decisions and communicate with citizens.

 

Councilman Richard Harmon called him shortly before the council voted to issue bonds and purchase Heartland Park, Colson said. Harmon thought they should wait and hold public hearings, but Colson said he wanted to move forward because he thought most Topekans agreed with the decision — a move he said he now wishes he had put off.

 

The city council voted to issue $5 million in new bonds to buy the racing complex and expand a sales tax district that would repay the new bonds and about $10.8 million in outstanding bond debt from earlier bond issues. Colson had said before that the city wouldn’t be involved in running the race track, but the contract language suggests the city could be stuck paying a revenue guarantee to the National Hot Road Association.

 

Topekan Chris Imming filed a petition, which Shawnee County District Court declared invalid, to stop the sale. Imming appealed, and a court decision in his favor would force an election on the issue.

 

Colson acknowledged the Heartland Park decision isn’t popular, but said cities need to make decisions based on the community’s best interest, not on political considerations.

 

“Sometimes you give your best answer and people disagree,” he said. “This is my best answer, and a lot of people disagree.”

 

Topeka also needs to focus on developing an educated workforce, recruiting and retaining employers, making downtown an interesting place and encouraging public participation.

 

During the question period, a TIBA member asked how Colson’s stated commitment to citizen participation squared with the decision to challenge Imming’s petition in court. Colson said the petition was invalid, and any election based on it also would have been invalid.

 

“I don’t think there’s been more participation in any administration in the city of Topeka,” he said.

 

Colson also revealed another side to his life, touching on his time in seminary and as a minister before he became an economic development consultant and later, a city manager.

 

“Sometimes when I read things in the newspaper, I think I hope they don’t read this in the seminary,” he said, as a joke. “If you lie, if you take advantage of anybody, it will come back to hurt you at the worst possible time.” He later clarified that he was stating the Christian principles he lives by, not referring to any specific person.

 

He added that spirituality is “the most important part” of his life, and he sees economic development and city government as ways to serve.

 

“I’m not in this for me,” he said.

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Imming, attorney argue for validity of petition in Heartland Park appellant brief

 

Petitioner Chris Imming and his attorney, R.E. “Tuck” Duncan II, have filed their brief in the appeal of the Heartland Park petition case and listed four points in which they say the Shawnee County District Court erred.

 

The 44-page brief from Imming was made available by the Kansas Appeals Court on Friday morning.

 

The filing starts a 30-day clock by which the city of Topeka and Jayhawk Racing LLC have to file their briefs. The temporary stay prohibiting Topeka’s city government from moving forward with its proposed issuance of sales tax revenue (STAR) bonds is in place until 10 days following their filings.

 

In the brief filed Thursday, the appellant argues four main points in which the Shawnee County District Court erred in its ruling against the petition, concluding that the appeals panel direct the city to either enact the initiative petition or put it before Topeka voters “so as to preserve the democratic process.”

 

Shawnee County District Court Judge Larry Hendricks on Nov. 12 found that the petition was substantially compliant with the law, but that the city ordinance to purchase Heartland Park and expand the STAR bond district — Topeka Ordinance No. 19915 — is largely administrative. Initiative petitions — the type of petition Imming filed — can’t be filed against administrative ordinances, according to state law.

 

In addition, Hendricks ruled, a petition to challenge the issuance of full faith and credit STAR bonds has to be a protest petition, because STAR bonds are legislative.

 

Duncan, however, argues the district court erred in that decision. The city ordinance, he said, has several legislative aspects, including that it implements permanent actions and has statewide implications. The plan would divert state sales tax dollars toward repaying the STAR bonds.

 

“The initiative petition is the only appropriate procedure to reverse this bundling of multiple matters,” he states.

 

Approving administrative ordinances, on the other hand, requires “specialized training and experience or intimate knowledge of the fiscal affairs of government” — something, Duncan argues, the Topeka City Council and mayor lack. He cites LinkedIn and profile pages of council members, highlighting their occupations: “two lawyers, two association executives, an LPN, a labor organizer, two with health care training, an ‘office worker,’ and a database administrator.”

 

“Not one is an investment banker, a CPA, a licensed real estate professional, or similar profession who possesses some specialized training in STAR bonds,” Duncan states. “How can it be said that a city council merely by their election to office becomes endowed with specialized training and experience in municipal government with intimate knowledge of the fiscal and other affairs of a city?”

 

Duncan also argues the trial court erred in denying the defendant’s motion to dismiss when it determined the action of the city manager was ratified by the city council.

 

Hendricks ruled in favor of Duncan’s argument that city manager Jim Colson didn’t have authority to file the lawsuit against the petition.

 

However, Hendricks determined the council ratified Colson’s decision during the Oct. 21 council meeting, when council members voted not to approve Councilman Chad Manspeaker’s motion that would have ordered the city attorney not to pursue litigation.

 

Duncan states the law requires a governing body affirm the motion in a ratification, which, he argues, is a higher threshold than merely rejecting a procedural motion.

 

“All we know from the unapproved minutes is that the city council did not want to vote on the issue (as difficult as it may be to believe that politicians would not want to go on record),” he writes.

 

“Ratification by implication” is a slippery slope, he states, that suggests governing bodies never would have to affirm unauthorized actions of their employees.

 

“Only the governing body has the authority to initiate this lawsuit,” he concludes.

 

Duncan also states the trial court erred in:

 

■ Granting summary judgment in favor of the plaintiff and intervenor by finding that the proposed ordinance was subject to referendum or election and therefore not subject to the Kansas Initiative Statute.

 

■ Granting defendant’s counterclaim for Writ of Mandamus.

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Heartland Park audit surprise to commerce secretary, investment community

 

The secretary of the Kansas Department of Commerce said Tuesday he was surprised the Legislature’s auditing division delved into a proposed deal to rely on state sales tax revenue to cover millions of dollars in debt owed by Heartland Park Topeka racing facility and the city of Topeka.

 

Secretary Pat George said in an interview following testimony to a Senate committee that some economic development professionals had taken notice of the ongoing audit in terms of how it might influence the commerce department’s wide authority over a range of programs designed to expand jobs in Kansas.

 

“The surprise was that it was in the middle of the project,” said George, who was a Kansas House member before joining the administration of Gov. Sam Brownback. “There’s a little bit of angst among some of the economic development folks that we work with.”

 

He said the investment community appreciated the commerce department’s ability to work through development transactions without bogging down in a bureaucracy.

 

The Heartland Park deal hinges on George’s approval of a new $5 million STAR bond issue to help Topeka pay off $10 million in previous bond debt related to the track, allow the city to buy out Jayhawk Racing owner Raymond Irwin and to cover Irwin’s loans from CoreFirst Bank & Trust.

 

The city of Topeka would pay Jayhawk Racing $2.4 million, but Irwin would be required to pay $300,000 to CoreFirst and $185,000 to the city. CoreFirst would directly receive $1.9 million from the bond sale, while the state and federal governments would receive $500,000 each.

 

The complex financial package has been on idle until resolution of a legal dispute before the Kansas Court of Appeals regarding a possible public vote on the bailout. The city of Topeka is opposing a petition drive by a citizen to compel the citizen vote.

 

If the deal faltered, CoreFirst could secure title to Heartland Park. That could occur if STAR bonds aren’t issued by Feb. 28, or if outstanding debt hasn’t been paid. The city and Jayhawk Racing could ask for deadline extensions of 90 days.

 

In December, the Legislature’s joint House and Senate committee voted to take up the unusual audit of the Heartland Park arrangement following the recommendation of Senate Minority Leader Anthony Hensley, D-Topeka. He proposed the review on behalf of constituents.

 

“This is up to the Legislature and that committee,” George said. “My job is to grow the economy.”

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Company interested in Heartland Park facing fraud allegations

 

The owner of one of the companies interested in taking over Heartland Park Topeka is facing fraud and embezzlement allegations from his business partner at a Kansas City racetrack.

 

Michael Johnson is one of two defendants — the other is his wife, Kyle Johnson — in a recently filed civil petition case in Johnson County District Court.

 

In it, the Johnsons’ business partners at Lakeside Speedway, a dirt track racing facility in Wyandotte County, allege the Johnsons inappropriately compensated themselves, failed to maintain proper records, refused to provide complete financial records and otherwise excluded their business partners from information and decisions entitled to them as 50/50 owners of the track.

 

Michael Johnson, of the same address listed in the court case, also is listed as the owner of MK Investment LLC on a business registry filing with the state of Missouri. MK Investment was one of four entities to submit bids to own or operate Heartland Park, if and when Topeka acquires the property with the help of $5 million in sales tax revenue (STAR) bonds.

 

Michael Johnson, reached by phone Tuesday, confirmed he owns MK Investment and offered the following statement with regard to the lawsuit:

 

“This dispute is about the management of Lakeside Speedway,” he said. “Our partners are using this as a negotiation ploy in the buying or selling of the speedway. The allegations are untrue.”

 

Topeka city attorney Chad Sublet said he wasn’t aware of the civil case, but said the city continues to work with all four entities.

 

“Obviously, everything is on hold pending the court case,” Sublet said.

 

The Johnson County case was filed Jan. 13, and Michael and Kyle Johnson were served Jan. 17.

 

Nate Harbur, the attorney representing plaintiffs Donald and Donna Marrs, said no hearings had been scheduled, but the Johnsons had to reply by Feb. 18.

 

The Marrs have asked the judge to issue a permanent injunction prohibiting the Johnsons from continuing to manage the facility. That means not receiving and expending funds or maintaining books and payroll records, among other actions. The “embezzlement of funds,” “gross mismanagement of company resources” and “other improper actions” have had a “materially adverse effect on the financial condition of the company,” the filing states.

 

“The company and the Marrs have suffered and will continue to suffer damages and lost revenues unless and until the Johnsons are removed from the day-to-day management and operations,” the filing continues.

 

The Marrs claim more than $75,000 in damages, though, without access to financial records, actual damages were difficult to estimate.

 

The petition alleges seven counts ranging from fraud to equitable accounting. All relate to allegations the Johnsons attempted to exclude the Marrs from the operations of the business they equally share.

 

The filing states the Johnsons took over management of the day-to-day operations of the facility, despite initially having agreed to another individual.

 

Further, despite there being no agreed upon compensation for Michael or Kyle Johnson to manage the facility, “Michael Johnson paid himself reimbursement checks for what appear to be bogus or contrived expenses,” the filing states.

 

When reviewing the accounting statements, the Marrs noticed discrepancies and asked the Johnsons for receipts and explanations. However, the Johnsons have and continue to refuse to provide that information.

 

“(T)he CPA and the Marrs noticed numerous expenditures that (the) Johnsons had made to Michael Johnson and to third parties that did not appear to be legitimate expenses of the company and/or which were not documented or were not properly documented,” according to the filing.

 

The Marrs allege Michael Johnson committed fraud — one of the seven counts — “by denying he had engaged in wrongdoing and by failing to disclose material facts.”

 

The filing lists 15 explicit breaches of contract, which is another of the seven counts. Other breaches of contract not already mentioned above include failing to maintain payroll records; refusing to allow the Marrs to have an equal say in hiring and firing people and making track rules; and “being unfair and inconsistent in enforcing track rules.”

 

The filing also alleges the Johnsons have taken equipment from Lakeside Speedway for personal use.

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Chevy Nick

Jayhawk Racing, city of Topeka file briefs in Heartland Park petition appeal

 

The temporary stay prohibiting the city of Topeka from proceeding with its plan to acquire Heartland Park Topeka should end next week.

 

Lawyers representing the city and Jayhawk Racing LLC on Monday filed briefs with the Kansas Court of Appeals in response to Topekan Chris Imming’s appeal of his Heartland Park petition lawsuit, meaning a 10-day temporary stay granted in the case ends Feb. 5.

 

Jayhawk Racing filed first, mentioning the city’s impending filing multiple times in its brief.

 

“In an effort to avoid duplication,” the brief states multiple times, “Jayhawk adopts and incorporates by reference arguments and authorities the City presents on this issue in its response brief.”

 

Jayhawk Racing’s brief, it adds, is meant as a supplement to the city’s filing.

 

The city late Monday afternoon then filed a 93-page brief in response to Imming’s appeal.

 

The Court of Appeals on Jan. 8 issued a temporary stay prohibiting Topeka’s city government from moving forward with its proposed issuance of $5 million in sales tax revenue (STAR) bonds to purchase Heartland Park until 10 days after the point when Imming, the city and Jayhawk Racing LLC had all filed briefs in the case.

 

If the temporary stay is lifted next week, it would give the city about three weeks to carry out its plan to purchase Heartland Park before the Feb. 28 deadline specified in the purchase agreement, which allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing if STAR bonds involved haven’t been issued by that date.

 

The appeal is an effort to overturn a Nov. 12 decision from Shawnee County District Court Judge Larry Hendricks. Hendricks found the petition was substantially compliant with the law, but that the city ordinance to purchase Heartland Park and expand the STAR bond district — Topeka Ordinance No. 19915 — is largely administrative. Initiative petitions — the type of petition Imming filed — can’t be filed against administrative ordinances.

 

Imming’s attorney, R.E. “Tuck” Duncan in his Jan. 16 appellate brief argues the district court erred in that decision. The city ordinance, he said, has several legislative aspects, including that it implements permanent actions and has statewide implications. The plan would divert state sales tax dollars toward repaying the STAR bonds.

 

“The initiative petition is the only appropriate procedure to reverse this bundling of multiple matters,” he states.

 

Catherine P. Logan, with Overland-Park based Lathrop & Gage LLP, cited four main points in the brief filed Monday on behalf of the city.

 

In the first point, she argued that the Kansas Supreme Court’s 2009 decision in the case of McAlister v. City of Fairway called for Kansas courts to apply four guidelines in analyzing an ordinance to determine whether it is administrative.

 

Addressing each, Logan wrote that:

 

■ Ordinance 19915 is administrative because it executes an existing law rather than making new law, in which case it would be legislative.

 

■ The ordinance is more administrative than legislative because it deals with only a small segment of an overall policy question.

 

■ The ordinance is significantly more administrative than legislative because its subject matter unquestionably requires extensive specialized knowledge.

 

■ The ordinance is administrative because it involves a comprehensive statutory enactment and complex intergovernmental project, in which the Kansas Legislature specifically delegated the decision-making power to the city’s governing body rather than to local electors.

 

Logan’s other main points were that:

 

■ Ordinance 19915 was subject to referendum under another statute and consequently can’t be challenged by an initiative petition using the statute upon which Imming relied.

 

■ Hendricks’ decision to dismiss should be affirmed because the city has sufficient standing as a proper party to the action that was taken.

 

■ Hendricks acted properly in denying Imming’s counterclaim for Writ of Mandamus.

 

Kevin Fowler, with Frieden, Unrein & Forbes, LLP, filed a 24-page response Monday arguing four main points that support the district court’s ruling that the petition was invalid.

 

In his conclusion, Fowler asks the appellate court panel to deny Imming’s motion for a stay “outright” or condition any longer of a stay upon Imming securing bonds to cover damages resulting from prohibited action.

 

Earlier, Jayhawk Racing asked the court to require bonds totaling $5.29 million, while the city asked it to require bonds totaling $45.6 million.

 

Jayhawk Racing argues the Kansas Appeals Court should reject Imming’s arguments, in part because:

 

■ Imming misconstrued the nature of the city’s acquisition of Heartland Park. “The proposed transaction,” it states, “simply unifies ownership of the real property.”

 

■ Imming “overlooks the fact that the City has had the benefit of the advice and analysis of paid consulting experts over the court of this proposed STAR bond transaction.” This includes, but isn’t limited to, a certified public accountant who deemed the expanded district would generate enough sales tax revenue to pay off the additional bonds.

 

In Duncan’s brief, he argued the city council lacks the required specialized training to approve the administrative ordinance.

 

■ Imming’s claim that city manager Jim Colson didn’t have the authority to file the lawsuit challenging the petition’s validity is moot, because Jayhawk Racing “has full authority to litigate on its own behalf” and a “motion to dismiss will have no effect on the course of the litigation.”

 

Also, Jayhawk Racing argues, when the governing body approved the memorandum of understanding in June, “it clothed the city manager with all authority necessary to ensure that the city did not breach the MOU.”

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Company interested in Heartland Park facing fraud allegations

 

The owner of one of the companies interested in taking over Heartland Park Topeka is facing fraud and embezzlement allegations from his business partner at a Kansas City racetrack.

 

Michael Johnson is one of two defendants — the other is his wife, Kyle Johnson — in a recently filed civil petition case in Johnson County District Court.

 

In it, the Johnsons’ business partners at Lakeside Speedway, a dirt track racing facility in Wyandotte County, allege the Johnsons inappropriately compensated themselves, failed to maintain proper records, refused to provide complete financial records and otherwise excluded their business partners from information and decisions entitled to them as 50/50 owners of the track.

 

Michael Johnson, of the same address listed in the court case, also is listed as the owner of MK Investment LLC on a business registry filing with the state of Missouri. MK Investment was one of four entities to submit bids to own or operate Heartland Park, if and when Topeka acquires the property with the help of $5 million in sales tax revenue (STAR) bonds.

 

Michael Johnson, reached by phone Tuesday, confirmed he owns MK Investment and offered the following statement with regard to the lawsuit:

 

“This dispute is about the management of Lakeside Speedway,” he said. “Our partners are using this as a negotiation ploy in the buying or selling of the speedway. The allegations are untrue.”

 

Topeka city attorney Chad Sublet said he wasn’t aware of the civil case, but said the city continues to work with all four entities.

 

“Obviously, everything is on hold pending the court case,” Sublet said.

 

The Johnson County case was filed Jan. 13, and Michael and Kyle Johnson were served Jan. 17.

 

Nate Harbur, the attorney representing plaintiffs Donald and Donna Marrs, said no hearings had been scheduled, but the Johnsons had to reply by Feb. 18.

 

The Marrs have asked the judge to issue a permanent injunction prohibiting the Johnsons from continuing to manage the facility. That means not receiving and expending funds or maintaining books and payroll records, among other actions. The “embezzlement of funds,” “gross mismanagement of company resources” and “other improper actions” have had a “materially adverse effect on the financial condition of the company,” the filing states.

 

“The company and the Marrs have suffered and will continue to suffer damages and lost revenues unless and until the Johnsons are removed from the day-to-day management and operations,” the filing continues.

 

The Marrs claim more than $75,000 in damages, though, without access to financial records, actual damages were difficult to estimate.

 

The petition alleges seven counts ranging from fraud to equitable accounting. All relate to allegations the Johnsons attempted to exclude the Marrs from the operations of the business they equally share.

 

The filing states the Johnsons took over management of the day-to-day operations of the facility, despite initially having agreed to another individual.

 

Further, despite there being no agreed upon compensation for Michael or Kyle Johnson to manage the facility, “Michael Johnson paid himself reimbursement checks for what appear to be bogus or contrived expenses,” the filing states.

 

When reviewing the accounting statements, the Marrs noticed discrepancies and asked the Johnsons for receipts and explanations. However, the Johnsons have and continue to refuse to provide that information.

 

“(T)he CPA and the Marrs noticed numerous expenditures that (the) Johnsons had made to Michael Johnson and to third parties that did not appear to be legitimate expenses of the company and/or which were not documented or were not properly documented,” according to the filing.

 

The Marrs allege Michael Johnson committed fraud — one of the seven counts — “by denying he had engaged in wrongdoing and by failing to disclose material facts.”

 

The filing lists 15 explicit breaches of contract, which is another of the seven counts. Other breaches of contract not already mentioned above include failing to maintain payroll records; refusing to allow the Marrs to have an equal say in hiring and firing people and making track rules; and “being unfair and inconsistent in enforcing track rules.”

 

The filing also alleges the Johnsons have taken equipment from Lakeside Speedway for personal use.

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Kansas Supreme Court schedules oral arguments in Heartland Park case

Two sides will make their case Feb. 26

 

The Kansas Supreme Court has set a date for oral arguments in the Heartland Park Topeka case.

 

Attorneys representing the plaintiffs – the city of Topeka and Jayhawk Racing Properties LLC – and the defendant, Chris Imming, will present their arguments at 9:30 a.m. on Thursday, Feb. 26 in the Court of Appeals courtroom, 300 W. 10th St.

 

Each side will be allowed 20 minutes to present their case.

 

The Court of Appeals is considering Imming’s appeal of Shawnee County District Judge Larry Hendricks’ ruling in favor of the city of Topeka and Jayhawk Racing invalidating a petition drive Imming coordinated seeking to put to a citywide vote the city’s proposed purchase of the financially troubled Heartland Park racing facility.

 

The Capital-Journal was seeking comment from Topeka’s city government Wednesday on how the move would affect its efforts to carry out the purchase, considering the time frame involved.

 

The city’s purchase agreement allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing if STAR bonds involved haven’t been issued by Feb. 28. The contract allows for extensions from that deadline of up to 90 days to be granted.

 

The Court of Appeals on Jan. 8 issued a temporary stay prohibiting Topeka’s city government from moving forward with its proposed issuance of $5 million in sales tax revenue (STAR) bonds to purchase Heartland Park until 10 days after the point when Imming, the city and Jayhawk Racing LLC had all filed briefs in the case. The latter two entities filed their briefs Jan. 26, meaning the temporary stay would expire Jan. 5.

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All three parties in Heartland Park Topeka case ask appeals court to reschedule hearing set for Feb. 26

 

The city of Topeka, Jayhawk Racing Properties, LLC, and Chris Imming have filed a motion to reschedule their hearing date for oral arguments with the Kansas Court of Appeals regarding the Heartland Park Topeka case, documents made public Thursday said.

 

Meanwhile, in a separate motion, Imming asked the appeals court panel to extend the stay in the case at least until oral arguments are heard. The stay is slated to end Feb. 5.

 

The hearing is currently scheduled for 9:30 a.m. Feb. 26 in the Court of Appeals courtroom, 300 S.W. 10th, and all three parties are asking it be moved to Feb. 18, 19 or 20.

 

The lead counsel for the city won’t be available the week of Feb. 23 because of a previously-scheduled, non-refundable, out-of-state vacation.

 

Also, Imming’s attorney isn’t available on Feb. 17 because of a previously-scheduled surgery for his spouse.

 

If Feb. 18, 19 or 20 doesn’t work, the parties requested the week of Feb. 9.

 

If that doesn’t work, the parties are asking for a telephone conference with the Court of Appeals to set a mutually agreeable hearing date.

 

The parties agree that they don’t want to continue the hearing date any later than Feb. 28.

 

Attorneys representing the plaintiffs — the city of Topeka and Jayhawk Racing Properties LLC — and the defendant, Imming, will present their arguments at the hearing. Each side will be allowed 20 minutes to present their case, but Jayhawk Racing and the city will have to share that time.

 

In a later filing Thursday, Imming’s attorney, R.E. “Tuck” Duncan, asked the appeals court panel to extend the stay in the case, which is prohibiting the city’s governing body from taking further action on acquiring Heartland Park. He states the parties don’t need a separate hearing to extend the stay and asks that it be in place at least until the oral arguments are heard.

 

“If the stay expires by the terms of the court’s order ... then the appellees would undoubted(ly) proceed to implement the ordinance, issue bonds and take such other action as to frustrate the appellate process and render any order of this court ineffective,” Duncan wrote. He cited the panel’s brief statement on Jan. 8 issuing the stay, which stated the stay was important to preserve the democratic process.

 

The court has yet to address a request from Jayhawk Racing and the city of Topeka, which argues Imming should have to secure bonds to cover any damages resulting from the appeal, should Imming lose. Jayhawk Racing estimates its damages at $5.29 million, while the city puts its damages at $45.6 million.

 

The Court of Appeals is considering Imming’s appeal of Shawnee County District Judge Larry Hendricks’ ruling in favor of the city of Topeka and Jayhawk Racing invalidating a petition drive Imming coordinated seeking to put to a citywide vote the city’s proposed purchase of the financially troubled Heartland Park racing facility.

 

The currently scheduled hearing would be two days before the city’s purchase agreement allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing. The memorandum of understanding allows the bank to foreclose if STAR bonds involved haven’t been issued by Feb. 28. The contract allows for extensions from that deadline of up to 90 days to be granted.

 

When asked how the court date would affect that agreement, city attorney Chad Sublet said, “We will continue to work with all parties to make sure all requirements of the MOU are met.”

 

The Court of Appeals on Jan. 8 issued a temporary stay prohibiting Topeka’s city government from moving forward with its proposed issuance of $5 million in sales tax revenue (STAR) bonds to purchase Heartland Park until 10 days after the point when Imming, the city and Jayhawk Racing LLC had all filed briefs in the case. The latter two entities filed their briefs Jan. 26, meaning the temporary stay would expire Feb. 5.

 

Sublet said the city didn’t have any new information on the temporary stay Wednesday, but was “sure the situation will continue to develop in the coming days and weeks.”

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