Jump to content
Sign in to follow this  
Chevy Nick

Future of Heartland Park in question

Recommended Posts

Chevy Nick

City, Heartland Park ask appeals judges to deny Imming's request to extend stay

 

The city of Topeka and Heartland Park Topeka owner Jayhawk Racing, LLC, filed separate motions late Friday afternoon asking a Kansas Court of Appeals panel to deny the request Topekan Chris Imming filed Thursday asking the panel to extend a stay it previously granted in the case past its current ending date of Feb. 5.

 

The Court of Appeals on Jan. 8 issued the 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.

 

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.

 

The Court of Appeals this week made plans to hear oral arguments in the case at 9:30 a.m. Feb. 26 in its courtroom, 300 S.W. 10th. Imming, the city and Jayhawk Racing then filed motions Thursday asking the court to move the oral arguments to Feb. 18, 19 or 20.

 

Imming also filed his motion Thursday asking for an extension of the stay granted Jan. 8. The city filed an eight-page motion and Jayhawk Racing a six-page motion on Friday, both asking that the extension be denied.

Share this post


Link to post
Share on other sites
Chevy Nick

Topeka will wait for Kansas Court of Appeals ruling before taking further action on HPT

 

The stay prohibiting the city of Topeka from moving forward with its purchase of Heartland Park ends Thursday, but the city will wait until the appeals court has made a ruling before taking further action.

 

“We respect the judicial process and will await the final ruling from the Court of Appeals before moving forward,” said city attorney Chad Sublet. “Once we have a final decision from the Court of Appeals, we will continue negotiations with the proposed owners/managers of Heartland Park.”

 

The Kansas Court of Appeals on Wednesday denied petitioner Chris Imming’s request to extend the stay beyond Thursday, court documents showed. The order, issued Jan. 8, prohibited the city government from issuing sales tax revenue (STAR) bonds or buying Heartland Park until 10 days after all briefs were filed.

 

Sublet in December said the city wouldn’t move forward with issuing bonds while a stay in the appeal was pending, because it affects the marketability of the bonds.

 

Imming’s attorney, R.E. “Tuck” Duncan, last week requested the stay be continued at least until the oral arguments were presented, so as not to undermine the appeals process or the panel’s subsequent ruling, should the city take action before a decision is made.

 

Duncan said the court’s decision won’t affect their actions.

 

“Stay or no stay, we will continue to move forward to get a vote for the thousands of Topekans who signed the petition,” he said.

 

The court on Wednesday also submitted a response to requests from all parties to move up the oral hearing date from Feb. 26 to Feb. 18, Feb. 19 or Feb. 20, or next week.

 

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.

 

However, the schedules of the three panel judges won’t allow the hearing to be moved up, the filing reads.

 

“This court has taken extraordinary steps in setting this matter for hearing within three months of the date of the filing of the docketing statement,” the court wrote.

 

The court offered a couple of alternatives: Continuing the oral argument hearing, which would push it back to sometime in April, or waiving the hearing and allowing the parties to submit the matter to the court based on their briefs.

 

Otherwise, the court stated, the hearing will remain at its original time and place, 9:30 a.m. Feb. 26 in the Court of Appeals courtroom, 300 S.W. 10th.

 

That is two days before the city’s purchase agreement allows creditor CoreFirst Bank & Trust to foreclose on Jayhawk Racing. The memorandum of understanding (MOU) 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.

 

Sublet said the city is proceeding under the assumption there will be oral arguments. The city on Wednesday filed a statement of intent regarding the oral argument, saying it intends to proceed with the previously scheduled hearing on Feb. 26.

 

He said the city has had initial conversations about extending the MOU, but, for the meantime, will wait and see whether the appeals court issues an opinion within a couple of days of the oral argument hearing.

 

“We assume, based on the history of this case, it will be soon after the 26th,” Sublet said of the court’s ruling.

 

Even though that would mean missing the Feb. 28 deadline, he said, a favorable ruling would give the city a clear path to issuing the STAR bonds, which CoreFirst and Jayhawk Racing have said they are comfortable with. If the court takes much longer, he said, all parties, including the Topeka City Council, would have to agree to extending the MOU.

 

The next step would be issuing the STAR bonds, Sublet said, followed by approval from the Kansas Department of Commerce.

 

Despite Commerce Secretary Pat George earlier being quoted as saying the department hadn’t made a decision about the project, “tentative or otherwise,” a letter signed by him on Sept. 24 to city manager Jim Colson says otherwise:

 

“Based on all of the above, it is my determination that the Heartland Park Topeka STAR bond District constitutes a ‘major motorsports complex’ and is therefore an ‘eligible area’ within the meaning” of state statute, the letter reads.

 

Although there is a pending legislative audit into the proposal, the commerce department hasn’t sent the city any indication it wouldn’t approve the project, Sublet said.

Share this post


Link to post
Share on other sites
Chevy Nick

Heartland Park owner Irwin releases tentative 2015 schedule

 

With every passing week there seems to be more uncertainty about the future of Heartland Park Topeka.

 

But HPT owner Raymond Irwin remains steadfast in his belief that the racing facility has a future, taking a leap of faith by releasing a tentative 2015 schedule.

 

“I think that the facility is way too important to the community and it’s way too important to the racing community as well for the activities not to occur out here,” Irwin said. “So we’ve gone ahead and put in the dates that people have requested — the traditional dates as well as certainly the NHRA event in May — and our other events.”

 

Irwin expressed optimism that HPT’s biggest event, the NHRA Kansas Nationals, will be take place May 22-24. This would be its 27th year at the Topeka complex.

 

Topeka attorney Chad Sublet said the city shared Irwin’s optimism that Heartland Park should have a racing schedule for 2015, despite the fact that a new owner hasn’t been identified and the track remains tied up in a legal battle.

 

Jayhawk Racing, Sublet said, “is the management company, until they’re not. They have the right to do that.”

 

Irwin reiterated that he won’t manage the track in 2015, but said it would be irresponsible for him not to have a schedule in place for the new track operator as well as racers and fans. Irwin said he knew people would be surprised with his decision to release a 2015 schedule, but it is his intention to have a smooth transition.

 

“We have a very strong schedule and it makes no sense to me, even as we continue to negotiate with the city and other entities for the operation of the facility, not to make sure that people know that we’re going to be open,” Irwin said. “I didn’t spend 12 years working to just walk away. I wasn’t raised that way, I wasn’t built that way. It would be irresponsible for me to just walk out the door like it never happened.”

 

The future of the 27-year-old motorsports complex now rests with a Kansas Court of Appeals panel, which on Feb. 26 is set to hear oral arguments from Irwin’s company, Jayhawk Racing, the city of Topeka and petitioner Chris Imming. That is two days before CoreFirst Bank & Trust is allowed to foreclose on the property, in accordance with a workout agreement between the bank, Irwin and the city.

 

Although the city anticipates the panel will issue a favorable decision within a few days of the hearing — clearing a path to issuing Sales Tax Revenue (STAR) bonds within a few days of the deadline — the parties can agree to extending the agreement by 90 days.

 

Once the city has a clear path to issuing the bonds, it can move forward with its goal of finding a new management company, Sublet said. Four entities submitted applications, and the city continues to work with all of them, he said.

 

“Until we find out what the court’s going to say, we can’t have a contract with them,” Sublet said.

 

The city’s plan is to issue $5 million in new STAR bonds to acquire Heartland Park free and clear of any debt. That would allow the city to extend the district boundaries to capture enough state sales tax revenue, according to projections, to cover the $17 million debt without turning to city property taxes.

 

Irwin is slated to receive nearly half — $2.39 million — of the new STAR bond money. He is supposed to use those funds to pay back $300,000 to CoreFirst, $184,234 to the city of Topeka and an unknown amount to vendors. How much Irwin will end up with after those payments are made won’t be known until closing. Irwin has said he will make back some of his investment, which he estimated at more than $3 million, but “not all of it.”

 

Of the remaining bond money, $1.9 million would go to CoreFirst, $531,868.99 to the Small Business Administration, and $500,000 to the Department of Commerce.

 

The complex’s 2015 schedule includes HPT’s weekly dirt track schedule as well as road racing events and the bracket drag racing schedule. The schedule also includes a double Division V multi-state drag racing event as well as the multi-state ET Finals.

 

“I do believe that the community wants to see the success of Heartland Park Topeka, regardless of who might be operating it, and that’s what drives me to continue to do the things that I can do at this juncture to get to the finish line,” Irwin said.

 

HEARTLAND PARK TOPEKA

 

TENTATIVE 2015 SCHEDULE

 

March: March 4, HPT Touring Club (road course); March 21, dirt track practice; March 28, dirt track practice.

 

April: April 1, HPT Touring Club (road course); April 4, Saturday Showdown dirt races; April 11, Saturday Showdown dirt races; April 18, Saturday Showdown dirt races; April 25, Saturday Showdown dirt races; April 25-26, HPT Bike Days (road course).

 

May: May 2, Saturday Showdown dirt races; May 6, HPT Touring Club (road course); May 8, Street Legal drags; May 9, ET Bracket Series drag races; May 9, Saturday Showdown dirt races; May 16, Saturday Showdown dirt races; May 17 HPT Bike Day (road course); May 22-24, NHRA Kansas Nationals; May 29-31, SRT; May 30 Saturday Showdown dirt races.

 

June: June 3, HPT Touring Club (road course); June 6, Saturday Showdown dirt series; June 13-14, HPT Bike Days (road course); June 13, Saturday Showdown dirt series; June 20, Saturday Showdown dirt races; June 26, Street Legal drags; June 27-28, ET Bracket Series drag races; June 27, Saturday Showdown dirt races.

 

July: July 1 HPT Touring Club (road course); July 4, Saturday Showdown dirt races; July 11, Saturday Showdown dirt races; July 12, HPT Bike Day (road course); July 16, National Council of Corvettes; July 18, Saturday Showdown dirt races; July 24, Street Legal drags; July 25-26, ET Bracket Series drag races; July 25, Saturday Showdown dirt races.

 

August: Aug. 1, Saturday Showdown dirt races; Aug. 5, HPT Touring Club (road course); Aug. 8, Saturday Showdown dirt races; Aug. 9, HPT Bike Day (road course); Aug. 13-14, NHRA Division V Divisional drags; Aug. 15-16, NHRA Division V Regional drags; Aug. 22, Saturday Showdown dirt races; Aug. 28, Street Legal drags; Aug. 30, Saturday Showdown dirt races.

 

September — Sept. 2, HPT Touring Club (road course); Sept. 4, Street Legal drags; Sept. 5, ET Bracket Series drag races; Sept. 5, Saturday Showdown dirt races; Sept. 12, Saturday Showdown dirt races; Sept. 12-13, HPT Bike Days (road course); Sept. 18-20, NHRA ET Finals; Sept. 26, Saturday Showdown dirt races.

 

October — Oct. 2 Street Legal drags; Oct. 3-4, ET Bracket Series drag races; Oct. 7, HPT Touring Club (road course); Oct. 11, HPT Bike Day (road course).

Share this post


Link to post
Share on other sites
Chevy Nick

Heartland Park petitioner implores appeals court to submit matter to voters

 

In a response brief filed Thursday, the attorney representing the Heartland Park Petition effort implores the Kansas Court of Appeals to overturn a lower court’s decision that the petition is administrative.

 

In the 15-page filing, R.E. “Tuck” Duncan asks the appeals court to rule the petition is legislative and subsequently “allow the matter to be submitted to the voters.”

 

Duncan represents Topekan Chris Imming, who initiated a petition process to bring the proposed takeover of Heartland Park Topeka by the city to a public vote. The city’s plan is to issue $5 million Sales Tax Revenue (STAR) bonds to acquire the motorsports complex free and clear of any debt in order to expand the sales tax district, so the city can pay off the debt without turning to local property taxes.

 

Progress on the Heartland Park project, including issuing bonds and negotiating with a new owner, has been halted pending a decision from the Kansas Board of Appeals. Oral arguments in the case are slated for 9:30 a.m. Feb. 26. in the courtroom of the Kansas Court of Appeals, 300 S.W. 10th.

 

Imming has appealed the Nov. 12 decision of Shawnee County District Court Judge Larry Hendricks, who found 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.

 

The city, Duncan states, wants the appeals court to uphold the ruling that the petition is administrative, because “it is an extension of the prior failed STAR bond project.”

 

“Were that true,” he continues, “none of the statutory requirements for notice to the public, hearings, security consents from other units of government and from the Secretary of Commerce would not have been required.”

 

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.

 

“But,” Duncan wrote in Thursday’s filing, “the protest petition would not accomplish that which the initiative petition seeks ... The entire plan is not terminated by merely approving a protest.”

 

If there was a vote, and the city was prevented from issuing full faith and credit bonds, the city still could issue bonds backed by the sales tax and supplement any shortfall with property taxes, he argued.

Share this post


Link to post
Share on other sites
Chevy Nick

Company picked to run Heartland Park will need to make $7 million in improvements

 

To gain the contract to operate Heartland Park Topeka, whichever applicant Topeka’s city government chooses must agree to carry out improvements expected to cost more than $7 million, city attorney Chad Sublet confirmed Tuesday.

 

Sublet responded to questions about an amended project plan the city government has submitted to the Kansas Department of Commerce as part of its attempt to buy the financially troubled racing facility, which is owned by Raymond Irwin’s Jayhawk Racing LLC.

 

The document acknowledges the city anticipates 16 improvements — estimated to cost a total of more than $7 million — will be carried out at the track.

 

Those costs will be borne by the operator of the facility and not Topeka’s city government, Sublet said.

 

He indicated applicants for the contract understand they will need to cover those costs if they are chosen.

 

Sublet added that city manager Jim Colson has made it clear that if the city doesn’t acquire an operator for Heartland Park, it won’t issue the bonds.

 

Topeka’s city government last June unveiled its plan to purchase the racing facility. The move depends on the state’s issuing $5 million in additional Sales Tax Revenue, or STAR bonds, to try to solve problems that emerged after the council voted in 2006 to issue $10.46 million worth of STAR bonds to finance Heartland Park improvements.

 

Plans called for the bonds issued in 2006 to be paid off using sales tax revenue from the track. But Heartland Park’s STAR bond revenues have consistently fallen short of estimates, forcing the city to use property tax revenue to make up the difference.

 

The city’s governing body voted in August to buy Heartland Park and expand its redevelopment district. The plan involves the state’s issuing another estimated $5 million in STAR bonds and authorizing the city to 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.

 

Sublet said Tuesday that Kansas statute prohibits the $5 million in additional STAR bonds from amounting to more than 50 percent of the costs for the addition to the project.

 

But he said the more than $7 million in costs outlined in the amended project plan will “more than match” the $5 million, with those costs being covered by the new owner or operator.

 

The amended project plan says the largest of those 16 costs involve spending $1.5 million to begin commerce park development, $1 million to build garages and high-end facilities, $1 million to resurface S.E. 85th and Adams streets to provide additional access and egress and $750,000 to put in a new banquet facility.

 

The city last year sought bids from companies interested in buying or leasing and operating Heartland Park, and received four that met its qualifications. The four bidders were MK Investments, Larry Sinks, Monopoly Acquisitions LLC and International Motorsports Entertainment and Development Corp.

 

City officials have postponed any further decisions regarding the purchase of the racing facility while a court case involving Heartland Park remains pending.

 

The case is linked to a petition drive Topekan Chris Imming initiated last year seeking to put the city’s Heartland Park purchase to a public vote. Petition drive organizers gained more than the required number of signatures needed to put the matter on the ballot for a citywide election, but Shawnee County District Judge Larry Hendricks ruled the petition invalid in November.

 

Imming appealed Hendricks’ decision to the Kansas Court of Appeals, which will hear oral arguments on the matter Thursday.

Share this post


Link to post
Share on other sites
Chevy Nick

City kept $7M improvements for Heartland Park Topeka quiet for 5 months

 

Dirt track racing aficionado Larry Lowrey initially was interested in operating Heartland Park Topeka. ITP Marketing, a company owned by him and his brother, successfully ran its dirt track in 2006, and he knows enough people in the industry to give it a whirl.

 

Lowrey, who is from Silver Lake, met with city officials, toured the complex and eventually signed up online as a bidder in late November.

 

That gave him access to the contract with the National Hot Rod Association — the contract that puts the city and operator of Heartland Park on the line for a revenue guarantee of $1.8 million.

 

Lowrey bowed out.

 

“If the event made $800,000, I’d have to get $1 million in five days to somebody,” he said Wednesday. “I want to negotiate in the best interest for my business, not what the city thinks is in the best interest for my business.”

 

If he hadn’t dropped out of the running after learning about the NHRA contract, he said, the recently disclosed need of $7 million in improvements would have done it.

 

Lowrey, as did most Topekans, learned about the costly improvements Tuesday, when it was initially reported by The Topeka Capital-Journal.

 

“I was dumbfounded by it,” Lowrey said. “You need to make money with what you have there already before you go spending it.”

 

The 16 projects include $1.5 million to begin commerce park development, $1 million to build garages and high-end facilities, $1 million to resurface S.E. 85th and Adams streets to provide additional access and egress and $750,000 to put in a new banquet facility. The selected owner/operator would be responsible for those improvements, which will be needed during the 11 years of the project, said city attorney Chad Sublet.

 

Lowrey said he didn’t see the $7 million figure among the bidding documents, but Sublet said the city notified the four prospective operators early on about the needed improvements.

 

The city identified the need for $7 million in improvements back in September, when it submitted its application for Sales Tax Revenue (STAR) bonds to the Kansas Department of Commerce, Sublet said. The state received the amended request Sept. 9, according to a department spokesman.

 

The amount of needed improvements is coming publicly to the surface only now, Sublet said, because the city’s STAR bond application is a working document — and therefore confidential — until it receives final approval from the state.

 

“Parts of amended plan are confidential, but some parts of the plan are considered open record,” said commerce department spokesman Matt Keith.

 

Kansas statute prohibits the $5 million in additional STAR bonds from amounting to more than 50 percent of the costs for the addition to the project. The more than $7 million in costs outlined in the amended project plan will more than cover that requirement, as will obtaining the $15.3 million property for $5 million, he said.

 

Because it didn’t add to the amount of bonds the city was asking for, and because the proposal approved by the city council referenced those improvements, the amended plan didn’t have to go back before the council, Sublet said.

 

Getting the documents from the Kansas Department of Commerce turned into a months long ordeal. Petitioner Chris Imming in the first week of October requested from the state the city’s application for STAR bonds. After the request was rejected, Imming filed a complaint with the Kansas Attorney General’s Office. Finally, on Feb. 11, the state released the documents for Imming to view.

 

Imming almost immediately noticed the $7 million figure, and wondered why someone essentially leasing the property would invest such a sum.

 

“I’m curious how that’s going to work,” he said. “Unless they have $7 million sitting in their pocket, would they have to mortgage the property to do that? Get a loan from CoreFirst?”

 

Because negotiations with the four prospective bidders are on hold pending the appeal of the petition lawsuit, Sublet said he couldn’t get into specifics about their options. However, he said, one option is to give the operator the first right to purchase the property, possibly by giving the entity credit for any money it put into the park.

 

“There are a lot of ways to credit them for what they put into the project,” Sublet said.

 

Also, he said, giving the operator a reversionary interest in the property is off the table. Current operator Ray Irwin was given such an interest when he took it over, which is one of the reasons acquiring Heartland Park has become so expensive for the city.

 

Sublet repeated that none of the improvements is required immediately but will need to take place during the next 11 years. The NHRA, the four potential operators who toured the complex and at least one other evaluation of the racetracks showed they currently are in “good shape,” he said.

 

Lowrey, however, doesn’t see why Heartland Park needs $1 million for “garages and high-end facilities” and $750,000 for a banquet hall. He also wonders how a racetrack operator will develop the land around Heartland Park.

 

The request for bids released by the city in November requires “preliminary concepts and ideas to develop and use the 277-plus undeveloped acres at Heartland Park.” The plan details released Tuesday estimate the cost to begin the development of a commerce park at $1.5 million.

 

“I don’t see how running a racetrack and developing land work hand-in-hand,” Lowrey said. “They seem like two separate things.”

Share this post


Link to post
Share on other sites
Chevy Nick

Kansas Court of Appeals hears arguments in Heartland Park lawsuit

 

Kansas Court of Appeals judges posed questions at a hearing Thursday that appeared to be seeking flaws in arguments Topeka’s city government made in a lawsuit regarding the city’s proposed purchase of Heartland Park Topeka.

 

But attorney R.E. “Tuck” Duncan, who represented petition drive organizer Chris Imming at the hearing, said that didn’t necessarily mean the judges were leaning in that direction.

 

“Often the judges will ask questions to see if you have some substance in your arguments, but it may not be to your liking,” Duncan told reporters afterward.

 

Court of Appeals Judges Stephen Hill, Karen Arnold-Berger and Kim Schroeder didn’t say when they would issue a written decision in Imming’s appeal of a ruling made in November by Shawnee County District Judge Larry Hendricks.

 

As the hearing ended, Hill said, “We’ll take this under advisement and issue an opinion as soon as we reasonably can.”

 

He’d said earlier Thursday that the decision would likely come “sooner rather than later.”

 

The three judges spent about 90 minutes asking questions and hearing oral arguments in Imming’s appeal of the ruling by Hendricks, who invalidated an initiative petition drive Imming coordinated seeking to put the city’s proposed purchase of Heartland Park to a citywide vote.

 

Hendricks ruled the city ordinance to purchase Heartland Park and expand its Sales Tax Revenue -- or “STAR” Bond district — is administrative. State law prohibits initiative petitions such as the one Imming filed from being used to challenge administrative ordinances.

 

Hendricks also ruled that any petition to challenge the issuance of full faith and credit STAR bonds must be a protest petition, because STAR bonds are legislative.

 

The court heard Thursday from Duncan; Catherine Logan, with Overland-Park based Lathrop & Gage LLP, which is working under contract to represent the city; and Kevin Fowler of Topeka-based Frieden, Unrein & Forbes LLP, representing Heartland Park owner Jayhawk Racing LLC.

 

Hill raised questions as to whether the city ordinance to purchase Heartland Park is really administrative.

 

Duncan contended the ordinance is legislative. He told the judges: “This was a set-up deal from the start. They had no intention of listening to the petition.”

 

Hill noted that the ordinance to make the purchase more than doubled the size of the STAR Bond district while taking other steps that included ratifying contracts.

 

He asked Logan, “Is that not legislative?”

 

Logan replied that a past ruling written by Kansas Supreme Court Justice Dan Biles concluded that if an ordinance -- when viewed as a whole -- is more administrative than legislative, then it’s considered administrative.

 

Hill responded by suggesting a later ruling by Biles “kind of retreated from that.”

 

Topeka’s city government has halted progress on the Heartland Park project -- including postponing the issuance of STAR bonds and initiation of negotiations with a new owner -- as it awaits the Court of Appeals decision.

 

Fowler asked the judges to issue a ruling immediately, and later release an opinion outlining their reasoning.

 

He said Heartland Park would “go dark” if creditor CoreFirst Bank & Trust doesn’t receive money it’s owed within three days.

 

The city’s agreement to purchase Heartland Park empowers CoreFirst to foreclose on Jayhawk Racing if STAR bonds aren’t issued by Saturday, though it allows for extensions of up to 90 days to be granted.

 

City attorney Chad Sublet said last week that the city — after having initial conversations about extending the MOU — had decided to wait and see how quickly the appeals court reached a decision. He said he thought he court would rule fairly quickly, adding that the city could still seek to extend the MOU.

 

Thursday’s hearing marked the latest development in a story that became public last June, when Topeka’s city government unveiled its plan to purchase Heartland Park.

 

The move is targeted at solving a problem that emerged after the council voted in 2006 to issue $10.46 million worth of STAR bonds to finance improvements at the financially troubled racing facility.

 

Plans called for the bonds to be paid off using sales tax revenue from the track. But Heartland Park’s STAR bond revenues have consistently fallen short of estimates, forcing the city to use property tax revenue to make up the difference.

 

The city’s governing body consequently voted in August to buy Heartland Park and expand its STAR Bond district.

 

Subsequent months then saw:

 

-- Imming initiate his petition drive, which gained more than the required number of signatures needed to put the matter on the ballot for a citywide election.

 

-- The city file a lawsuit challenging the petition’s legality.

 

-- The city win its suit when Hendricks ruled Imming’s petition invalid in November.

 

-- Imming appeal Hendricks’ decision to the Court of Appeals.

Share this post


Link to post
Share on other sites
Chevy Nick

Topeka spends $150K on Heartland Park lawsuit in four months

 

The city of Topeka has spent more than $150,000 in four months on its lawsuit challenging the Heartland Park petition.

 

Topeka recently received its third bill from Lathrop & Gage, the law firm representing the city’s interests in the Heartland Park petition case. Combined, the three bills amount to $152,470.69, according to city records. The bills span from Oct. 8 to Jan. 30.

 

Of that, $150,762.50 went toward 493.1 hours of attorney services, averaging $306 an hour.

 

The most recent bill from Lathrop & Gage was for $79,075.68 — $77,624 in attorney services and $1,451.68 in other costs. It covers services provided between Dec. 1 through Jan. 30, said senior assistant city attorney Catherine Walter.

 

December and January featured a flurry of filings and hearings in the appeal of the case:

 

■ Dec. 2: Petitioner Chris Imming and attorney R.E. “Tuck” Duncan filed an appeal of the Shawnee County District Court decision.

 

■ Dec. 9: Imming and Duncan filed a request with the Kansas Court of Appeals issue a stay, prohibiting the city from taking further action on Heartland Park.

 

■ Dec. 15: Topeka and Jayhawk asked the judges to deny a stay or, if it is granted, require Imming to secure more than $50 million in bonds.

 

■ Jan. 7: Appeals court heard arguments on Imming’s request for a stay.

 

■ Jan. 26: City and Jayhawk filed their briefs.

 

■ Jan. 29: All three parties asked the oral arguments to be moved, though the request eventually was denied.

 

Topeka’s contract with the firm states the city will be charged for a variety of services: travel time; “time in court, including waiting time”; telephone and office conferences; responding to clients’ requests; and drafting and review of letters, pleadings and other documents.

 

It also states the city will compensate the firm for costs and expenses, including mileage, meals and ground transportation. Driving from the firm’s Overland Park office, 10851 Mastin Blvd., to Topeka City Hall, 214 S.E. 8th St., which is about 130 miles round-trip.

 

The most recent bill adds onto the first, which amounted to $72,428.50 for 233.5 hours of work — or $310 an hour.

 

The second bill was for $710 in attorney services and $256.51 in costs. It covered Nov. 3 to Nov. 30, Walter said.

 

November was a slow month for the case: Oral arguments before Shawnee County District Judge Larry Hendricks were heard Nov. 6, and an appeal of his Nov. 12 ruling wasn’t filed until Dec. 2.

 

“Most of the time spent preparing for the hearing was included on the first bill,” Walter explained.

 

At least another month’s worth of fees from the firm remain, though it likely won’t amount to much. February has been relatively quiet for the case, with the main action being Thursday’s oral arguments presented before the Kansas Court of Appeals.

Share this post


Link to post
Share on other sites
Chevy Nick

Heartland Park evades foreclosure for now

 

Two days have passed since CoreFirst Bank & Trust could start the process to take over Heartland Park Topeka, and the racetrack appears to have escaped that fate — for now.

 

City attorney Chad Sublet said Monday CoreFirst hadn’t foreclosed on Jayhawk Racing, the company currently operating the motorsports complex. He said the bank is “taking it day by day.”

 

“They said they’ll wait and see what the court of appeals has to say,” Sublet said.

 

The Kansas Court of Appeals on Thursday heard oral arguments in the petition lawsuit. As of Monday, the court hadn’t issued a ruling.

 

Racetrack operator Ray Irwin on Monday said he hadn’t heard from either the city of Topeka or its bank about a foreclosure against his company.

 

CoreFirst president and CEO Kurt Kuta said his “official response is no comment at this time.”

 

If and when the bank decides to foreclose on the property, Sublet said, it has to provide the city 30 days notice.

 

Topeka’s agreement to purchase Heartland Park empowers creditor CoreFirst to foreclose on Jayhawk Racing as early as Monday. The memorandum of understanding involved allows CoreFirst to foreclose if State Sales Tax (STAR) bonds weren’t issued by Saturday, though it allows for extensions of up to 90 days to be granted.

 

Sublet has said Topeka — after having initial conversations about extending the MOU — had decided, for now, to wait and see whether the appeals court issues an opinion within a couple of days after Thursday’s oral argument hearing.

 

Sublet earlier said he assumed, based on the history of the case, that the appeals court would rule fairly soon after the hearing.

 

He indicated in early February if the court took longer than expected, the city could seek to extend the MOU.

Share this post


Link to post
Share on other sites
one_lead_foot

Nick,

 

What can we do to help? Send letters? Email? Threats where we cut letters out of a magazine?

Share this post


Link to post
Share on other sites
Chevy Nick
What can we do to help? Send letters? Email? Threats where we cut letters out of a magazine?

Here's a couple of things you can do:

 

- Make positive comments about HPT on the Topeka Capital-Journal articles that I post in this forum

 

- Write a letter to the editor of the Topeka Capital-Journal supporting HPT (letters@cjonline.com , include hometown and phone # for verification)

 

- Make public comment at a Topeka City Council Meeting, which are on Tuesday nights at 6pm. (Citizens wishing to offer Public Comment may sign up by phoning the City Clerk’s office at 785-368-3940)

 

- Hold up signs outside of Chris Imming's place of business protesting his legal obstructionism

Share this post


Link to post
Share on other sites
Chevy Nick

Kansas Court of Appeals rules in favor of Topeka regarding Heartland Park

 

Topeka’s purchase of Heartland Park can go forward as planned.

 

The Kansas Appeals Court on Wednesday, while agreeing with several aspects of petitioner Chris Imming’s case, including that the city manager didn’t have authority to file the lawsuit, ruled Imming’s petition was the wrong format to challenge the issuance of Sales Tax Revenue (STAR) bonds.

 

“A citizen must challenge the issuance of STAR bonds by circulating a protest petition,” the court wrote.

 

Imming, the court continued, is not entitled to a writ of mandamus because the Topeka City Council is not legally required to appeal its ordinance to issue the STAR bonds. A mandamus is a “proceeding to compel some board or some corporation to perform a specified legal duty,” the ruling states.

 

“We affirm the district court’s denial of Imming’s claim for the issuance of a write of mandamus,” the court noted.

 

The city’s progress to acquire the racetrack and issue STAR bonds has been stalled since the appeal was filed Dec. 2. CoreFirst Bank & Trust technically could have foreclosed on operator Jayhawk Racing as early as Feb. 28, but opted to wait until the ruling from the appeals panel, which heard oral arguments in the case Feb. 26.

 

Meanwhile, the city’s plan to issue $5 million in STAR bonds to acquire the property and expand the sales tax district passed an investigation from the Legislative Post Audit. The audit looked into eight areas of the city’s plan to determine whether they met the legal requirements for the STAR bond act. While the city met all eight measures, post audit staff recommended three amendments to current law to prevent other cities from following suit.

Share this post


Link to post
Share on other sites
Chevy Nick

Editorial: Still time to weigh in on Heartland Park

 

A ruling issued Wednesday by the Kansas Court of Appeals cleared the way for city officials to proceed with the proposed issuance of Sales Tax Revenue (STAR) bonds and purchase of Heartland Park Topeka.

 

The appellate court ruled a trial court erred on several issues, but upheld the trial court’s decision that Chris Imming, who challenged the city’s plans, filed an initiative process when he should have filed a protest petition.

 

City officials plan to discuss during Tuesday’s Topeka City Council meeting how to proceed.

 

That gives Topekans another opportunity to let their elected officials know what they think about the proposed purchase of the racetrack and the STAR bond financing.

 

Heartland Park Topeka and its fate have been hot issues since the city council last summer made the public aware of its plans, which include issuing STAR bonds to purchase the property from owner Ray Irwin, expand the bond district to increase sales tax revenue and find a racetrack operator.

 

The city has been making payments with general fund revenue on an earlier STAR bond issue for the property because the track hasn’t been generating enough sales tax revenue to retire those bonds.

 

City officials and Topekans who support the plan see the new STAR bond issue and expanded district as a way to pay off all the bonds without using property tax revenue and keep the racetrack operating.

 

Opponents, however, view the proposal as a bailout of Irwin and his creditors. Imming is foremost among the opponents and circulated a petition, which garnered about 4,000 signatures, calling for the council to repeal its action or put it to a vote. Two courts have ruled he filed the wrong petition.

 

Regardless, Topekans still have time to make themselves heard and should let their elected city officials know whether they support or oppose the bond issue and racetrack purchase.

 

Contact information for the mayor and city council members is listed below.

 

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.

Share this post


Link to post
Share on other sites
Chevy Nick

Public meetings planned before Heartland Park vote by new council

Some controversial provisions may not be in contract

 

Topeka’s way is clear to issue bonds and purchase Heartland Park, city staff told the council Tuesday evening, but the public will get to weigh in first.

 

The city planned to issue $5 million in Sales Tax Revenue (STAR) bonds to purchase the racetrack and expand the district surrounding it. State and local sales tax collected within the surrounding district would go to pay off the remaining debt on $10.5 million in bonds issued in 2006 and the additional $5 million.

 

City attorney Chad Sublet said the city no longer has any legal obstacles to issuing the bonds since the Kansas Court of Appeals ruled a petition to force a public vote on the bonds was invalid, but city manager Jim Colson said the issue will go before a new council after the April election. Colson also said the process could include town hall meetings before the council would vote to authorize bond sales.

 

It was a substantial shift in tone from discussions of Heartland Park in recent months, when lawyers for the city and racetrack operator Jayhawk Racing raised alarms that the track was in imminent danger of closing if a petition drive led by Topekan Chris Imming went to a public vote. CoreFirst Bank & Trust could have foreclosed on Jayhawk Racing as early as Feb. 28, but has opted not to do so thus far.

 

Imming collected 3,587 signatures in the fall to attempt to force a vote on issuing the bonds. City manager Jim Colson filed suit against the petition and prevailed in Shawnee County District Court.

 

Imming appealed, but the Kansas Court of Appeals ruled March 11 that the city could purchase Heartland Park without a public vote. The court found Imming used the wrong type of petition to challenge the issuance of STAR bonds. Imming’s attorney, R.E. “Tuck” Duncan, said they plan to ask the Kansas Supreme Court to review the case.

 

Races at the track are scheduled to start April 4. Jayhawk Racing owner Ray Irwin may continue to operate the track for the time being, Colson said.

 

It isn’t clear how the council’s views on Heartland Park might shift after the April 7 election. Council members Denise Everhart and Chad Manspeaker didn’t seek re-election, and councilmen T.J. Brown and Nathan Schmidt have opponents.

 

Councilwoman Sylvia Ortiz said she had received comments from constituents saying they didn't want the city to purchase Heartland Park.

 

“They're saying, ‘Have they paid their water bill,’ ” she said, referencing Heartland Park's large outstanding water bill.

 

Councilwoman Denise Everhart said she hadn’t heard an alternative way to pay off the old bonds other than to raise property taxes.

 

“I guess the question that should be posed to all those folks that are going to come forward is, ‘What else should we do?’ ” she said.

 

Some council members raised the question of whether the city could call a special election to decide whether to proceed with the vote, but that isn’t legally possible, Sublet said.

 

Sublet also moved to clarify what a contract with a racetrack operator might include if the council directs them to negotiate one, though Colson reminded the council that nothing had been negotiated yet. The operator would be legally required to invest at least $5 million into the property, but it wouldn’t be required to do specific projects — such as building a banquet hall — that had been suggested, Sublet said.

 

“It could be whatever the operator wants to invest in the park, but it has to be at least $5 million,” he said.

 

A controversial provision also could be removed, Sublet said. The National Hot Rod Association had asked for a $1.8 million profit guarantee from the city and the prospective operator.

 

“The NHRA has verbally agreed they would do away with the guarantees in the contract,” he said.

Share this post


Link to post
Share on other sites
Chevy Nick

Thank You to those who are working to keep HPT open!

 

Change.org petition seeks support for city's purchase of Heartland Park Topeka

 

A petition on the website change.org asking the Topeka City Council to complete the city’s purchase of the financially troubled Heartland Park Topeka racing facility had 1,660 supporters as of Thursday afternoon.

 

The website indicates Topekan Dhruvil Shah about a week ago started the petition, which can be found at http://cjon.co/1MH4hTY.

 

Shah posted a message Tuesday on his Facebook page asking people to sign it.

 

The petition says: “Heartland Park is an integral part of Topeka. Heartland Park brings a lot of racing business to the city; drag racing, road racing, dirt track racing and motorcycle racing. On any given weekend, people come from hundreds of miles away to use Heartland Park. This represents millions of dollars of money from out-of-towners that are spent in Topeka.”

 

The petition adds: “Please issue STAR bonds and purchase the remainder of Heartland Park so that Topeka may hire an operator to keep Heartland Park open and serving the surrounding racing community.”

 

A Kansas Court of Appeals ruling last week enabled the city’s governing body — which consists of the nine council members and Mayor Larry Wolgast — to proceed with finalizing the purchase of the financially troubled racing facility without a public vote.

 

However, the governing body won’t take up that matter until after next week’s municipal elections, in which four of the nine council seats will be up for a vote.

Share this post


Link to post
Share on other sites
Chevy Nick

Ray Irwin: Heartland Park to delay start of 2015 season

 

Heartland Park Topeka officials confirmed Friday the auto racing facility will delay the opening of its 2015 season because of the uncertainty surrounding the proposed purchase agreement with the city of Topeka and the issuance of Sales Tax Revenue (STAR) bonds.

 

Heartland Park had released its 2015 schedule in early February, hoping a new management group would be in place by the start of the season, but with the Saturday Showdown dirt track series scheduled to open its season Saturday night, the agreement with the city has not yet been finalized.

 

Heartland Park owner Raymond Irwin confirmed in a Friday morning text message to a Capital-Journal reporter the start of the season would be delayed, and HPT director of operations Mike Walker said in a Friday afternoon interview the track is waiting to see how the situation with the city plays out.

 

“Not knowing what the future owner/management of Heartland Park Topeka is going to want to do, it’s basically impossible to start a race season at this time,” Walker said.

 

A Kansas Court of Appeals ruling last week allowed the city’s governing body — which consists of the nine council members and Mayor Larry Wolgast — to proceed with finalizing the purchase of the financially troubled racing facility without a public vote.

 

However, the governing body won’t take up that matter until after next week’s municipal elections, in which four of the nine council seats will be up for a vote.

 

With that in mind, Walker said HPT is in a wait-and-see mode concerning both the dirt track series and the E.T. Bracket Racing Series, which is scheduled to open May 9.

 

“I can’t start a series race if new (management) may come in and says the year-end season points payout is too much or the weekly payout is too much or they don’t want to run under the current rules so they’re going to change it,” Walker said. “New management may come in and get rid of a couple of classes at the dirt track and they might invent a new class, who knows?”

 

Walker said concerns about insurance also factored into HPT’s decision to delay the start of the season.

 

Heartland Park’s marquee event, the NHRA Kansas Nationals, remains on the NHRA schedule for May 22-24, and Walker said HPT officials are confident the event will go on as scheduled.

 

“I just got off a conference call with some of the guys at the NHRA about moving forward with parking plans and what needs to be done for the event, so NHRA’s still moving forward,” Walker said.

Share this post


Link to post
Share on other sites
Chevy Nick

The Topeka Capital-Journal finally ran my letter to the editor

 

Letter: Imming should have to pay city's legal fees

 

Chris Imming should pay the city of Topeka’s legal fees for his failed appeal of Shawnee County District Court Judge Larry Hendricks’ decision that his petition was invalid.

 

Imming lost one decision, and then he lost again. The public court system is not his personal playground. The people of Topeka have had enough of his renegade legal maneuvers. Imming’s continued legal obstructionism and stalling tactics have cost the taxpayers of Topeka and he should be held accountable.

 

All Imming has accomplished is to divide the populace and weaken Topeka. I find it ironic that Imming stated that “democracy was lost” when he appealed, yet he has been operating outside the boundaries of public accountability the entire time.

 

Imming is not an elected official and doesn’t represent the citizens of Topeka. I do not condone his legal obstructionism and he should be held accountable for the damage he has done.

 

If Imming wants to make a positive difference, I would encourage him to run for office or find volunteer opportunities that will strengthen Topeka.

 

NICK SCOTT, Topeka

Share this post


Link to post
Share on other sites
Chevy Nick

City vote to come May 5 on whether to proceed with Heartland Park purchase

 

Topeka city manager Jim Colson announced Tuesday evening he plans for the city’s governing body to vote May 5 on whether to proceed with the city’s proposed purchase of Heartland Park Topeka.

 

Colson spoke at a meeting in which four new council members were sworn in — the city’s largest such total in 10 years — and Councilwoman Karen Hiller was elected deputy mayor after having lost in two prior bids for that position.

 

While the version of the governing body that left office Tuesday had approved every proposal it considered to proceed with the purchase of the financially troubled Heartland Park racing facility, turnover that body saw as a result of last week’s election could threaten the move’s chances for final approval.

 

Colson said Tuesday after governing body members hear a presentation and discuss the proposed purchase at their April 21 meeting, the city plans to hold one and possibly two public town hall meetings prior to the May 5 vote.

 

The atmosphere for Tuesday’s meeting in council chambers was upbeat and cordial as the governing body held a ceremony to recognize outgoing Councilmen TJ Brown, Chad Manspeaker and Nathan Schmidt. The other outgoing member, Denise Everhart, was absent.

Share this post


Link to post
Share on other sites
Chevy Nick

Event planner upset over lack of response from Heartland Park Topeka officials on track's schedule

 

Rob Wilkie booked a drag racing event and car show at Heartland Park Topeka in November and began promoting it on the Internet.

 

More than 120 cars are expected to be at the event, bringing more than 200 people to Topeka to eat, drink, shop and stay in local hotels, Wilkie said.

 

Five months after booking the event, Wilkie became frustrated because he couldn’t get anyone from the facility to answer his phone calls or Facebook messages about the event.

 

Takeover Topeka Show N Go, an event sponsored by Pontiac G8/GTO Holden Cars, is slated for June 5 and 6.

 

“I had chosen Topeka because it was the most centrally located drag strip in the country,” said Wilkie, of Minnesota. “I didn’t even know about this whole track issue at the time.”

 

The “track issue” Wilkie is referring to is the future of the financially troubled Heartland Park racing facility.

 

The former city council had approved every proposal it considered to proceed with the purchase of the facility. However, with four new city council members being sworn in earlier this week, things aren’t quite so certain.

 

The current governing body will vote May 5 on whether to proceed with the purchase.

 

Topeka city manager Jim Colson said Tuesday after governing body members hear a presentation and discuss the proposed purchase at their April 21 meeting, the city plans to hold at least one public town hall meeting before the vote.

 

While current Heartland Park owner Raymond Irwin in February released a tentative 2015 schedule, he said Friday morning the facility is “being cautious.”

 

“I don’t know where we’re going to be with the city,” Irwin said.

 

Irwin said the NHRA Summer Nationals will take place as planned May 22-24. However, there will be a new owner soon, and it will be up to the new owner to schedule events.

 

The city declined to comment on the situation, said Aly Van Dyke, spokeswoman for the city.

 

Irwin referred scheduling questions to Mike Walker, who served as facilities and operations manager for Heartland Park until December.

 

Walker said he reached out to Irwin via Facebook on Friday.

 

“It all comes down to everything being up in the air with the city,” Walker said. “We have other events scheduled, too. We will try to accommodate and do all the events we have.”

 

Irwin had received a friend request from Walker by noon, he said. The two spoke, and Irwin said the facility is “hopeful” it will be able to host the event.

Share this post


Link to post
Share on other sites
Chevy Nick

Heartland Park sales-tax plan insufficient to meet annual bond payments

 

A City Hall strategy to rescue Topeka taxpayers from millions of dollars in old debt associated with the beleaguered Heartland Park racetrack falls $550,000 short of meeting bond payment obligations in the initial five years of the deal.

 

That previously undisclosed gap, city officials said, would have to be made up with local property taxes.

 

A Kansas Open Records Act request also revealed intent of the Kansas Department of Commerce, for the first time, to withhold sales tax revenue generated by a retailer in a STAR bond district from being used to service debt on an economic development project. In terms of Heartland Park, Walmart wouldn’t help pay bond debt.

 

Meanwhile, a city official said it had been unwise to promote without verification a Heartland Park consultant’s claim the track was responsible for $160 million annually in economic benefits. The impact may be overstated by two-thirds.

 

Long-term focus

 

In response to KORA requests, the state released a document demonstrating state and city sales tax designated to pay old and new Heartland Park bond obligations would be insufficient to consistently meet annual requirements until 2019. Over 11 years, it would miss the mark in years two through five.

 

Topeka City Attorney Chad Sublet said information city staff shared with the public during the past 10 months on Heartland Park didn’t include the year-by-year analysis revealing local taxpayers would be on the hook for the $550,000 shortfall.

 

He said financial disclosures by city officials focused on a pledge to address all bond debt affiliated with the motorsports complex by 2025.

 

“Our interest was assuring the public, the council, anybody that would listen, this is a plan to address our debt service problem over 11 years," Sublet said.

 

Doug Gerber, the city's director of administrative and financial services, said drawing upon state tax revenue to pay the bulk of the debt while filling shortages with Topeka property tax revenue was preferable to the city absorbing entirety of debt on the racetrack bonds.

 

Topeka is ineligible for additional state money to pay previous STAR bonds without issuing a supplemental set of STAR bonds, he said.

 

“This is in the long-term best financial interest of the city,” Gerber said. “I'm way more comfortable with that than having an $8.2 million deficit, which is what we have now. I'll take those numbers anytime.”

 

Gut check

 

Information about the repayment issue surfaced as the Topeka City Council prepared for a presentation Tuesday by city administrators on the quest to save Heartland Park by satisfying financial demands of racetrack operator Ray Irwin of Jayhawk Racing as well as expectations of CoreFirst Bank and Trust, which is owed millions of dollars by Irwin.

 

Topeka City Manager Jim Colson scheduled a vote May 5 by the council — four members recently took office — to determine whether a majority favored proceeding with framework of the deal negotiated by representatives of CoreFirst, Jayhawk Racing, City Hall and the Department of Commerce.

 

The city of Topeka, which owns the combination dirt-, drag- and road-racing property, would be solely responsible for paying existent STAR bonds if CoreFirst exercised its right to foreclose on Irwin. The city is keen to buy out Irwin’s “reversionary” interest in the track, which gives him the right to claim the property after all bond debt was satisfied.

 

If the city council commits to bonding, Colson would submit a final STAR bond application to the commerce department. The city would move to wrap negotiations with a company capable of managing the track. Bonds would be issued. CoreFirst and Irwin would be compensated. The city would obtain clear title to the Topeka track that opened in 1989.

 

Colson said the objective was to provide an opportunity for Heartland Park to serve as “a world-class motorsports venue.”

 

 

Big money, fight

 

Fate of Heartland Park has been the focus of legal, financial and political intrigue since the city council formally took up the STAR bond concept in June. An appeal of lower court decisions in litigation resulting from an attempt to compel a public vote on the deal is pending before the Kansas Supreme Court.

 

Senate Minority Leader Anthony Hensley, a Topeka Democrat who requested a legislative audit of the Heartland Park proposal, said the controversy demonstrated necessity of amending state law governing STAR bonds. He said reform was needed to guarantee cities and counties were held accountable when bonding commercial, entertainment or tourism developments.

 

“There’s no question they’ve used faulty numbers to make it look better than it is,” Hensley said.

 

In 2006, the city issued $10.4 million in STAR bonds for Heartland Park. Tax revenue projections regarding payment of that debt were flawed. The city’s annual subsidy on those bonds ranged from $241,000 in 2011 to $682,000 in 2008. Without intervention, the city’s subsidy could balloon to $800,000 annually.

 

If $5 million in new sales tax revenue bonds were issued in 2015, the city would pay Irwin $2.4 million and CoreFirst would receive $1.9 million.

 

Overall, the state would contribute $16.4 million in sales tax revenue to service public debt on the complex. The city of Topeka would provide $1.6 million from sales taxes and fill gaps with property taxes.

 

Walmart anomaly

 

Documents obtained under KORA included a series of emails tied to work by the Legislature's auditing division.

 

In a March report, auditors concluded the Heartland Park project was atypical but eligible for STAR bonds. The oddity was that new bonds were sought to save a destination venue rather than create a fresh attraction. Auditors challenged elements of the Heartland Park plan and issued recommendations for strengthening Kansas law guiding issuance of STAR bonds. A reform bill is pending in the Senate.

 

The emails indicated the commerce department has been developing an unprecedented repayment map for the Heartland Park bonds.

 

The project requires geographic expansion of the district from which state and city sales tax revenue would be diverted to pay old and new STAR bonds. The district would extend north along Topeka Boulevard to capture two major revenue generators in the vicinity of 37th Street — Walmart and the Bozarth automobile dealership.

 

Commerce Secretary Pat George has yet to make a final ruling on the map, but the state and city appear to have agreed sales tax revenue from Walmart shouldn’t apply to retiring Heartland Park’s debt. That cash will continue flowing to the state’s treasury.

 

“STAR bonds give the secretary a great deal of latitude and discretion in administering the program,” said Matt Keith, a spokesman for the agency.

 

Emails revealed the Kansas Department of Revenue recommended the bond-repayment map be modified to expel Walmart rather than pursue the administrative adjustment.

 

Mistaken stat

 

The city officially projected sales tax revenue in the newly defined Heartland Park district would grow 1 percent annually.

 

However, communications divulged through KORA indicated a city employee calculated annual sales tax growth in the zone to be 0.5 percent in the previous decade. That was an error, said a city spokeswoman, who indicated the correct rate stood at 3 percent.

 

Gerber, the city’s director of administration and finance, said 1 percent was appropriately viewed as conservative “especially as we’re trending upward.”

 

The rate projection is significant because a 1 percent adjustment resulted in the projected deficit in four of 11 years in the amount of $550,000. Slicing the rate in half would produce a sales tax revenue deficit in 10 of 11 years totaling $925,000.

 

Without Walmart contributing to bond retirement, Bozarth must remain a viable business in its current location to make the Heartland Park venture succeed.

 

“We're pretty confident,” said Sublet, the city’s attorney. “They've also invested quite a bit of money in that facility in the last few years.”

 

“Could something catastrophic happen in the future?” Gerber said. “Of course.”

 

Exaggeration

 

For months, the city’s campaign to generate support for the STAR bond correction included statements declaring the racetrack contributed $160 million each year to the economy.

 

That statistic was drawn from a 2012 market research report prepared by Hedges & Co. Hedges was hired by Irwin’s Jayhawk Racing — the business with the most to gain if the bond deal goes through.

 

Sublet said state auditors indicated Heartland Park’s influence was far less than $160 million.

 

“What they said in post audit was we believe it’s a third of that,” Sublet said. “It's $53 million in economic impact.”

 

Legislative auditors pointed to “bias or slant” in the Hedges assessment and found there was “not clear and convincing evidence” to support the report’s central conclusion.

 

In response, auditors recommended the Legislature and Gov. Sam Brownback amend Kansas law to require economic impact studies related to STAR bond proposals to be conducted by independent firms selected by the commerce department.

 

The 50-50 split

 

The state’s STAR bond law dictates tax subsidies not constitute more than 50 percent of an economic development project’s cost. Current state law doesn’t penalize cities, counties and their private business partners that fail to comply.

 

Chris Imming, who led the legal fight to require a public vote on Heartland Park, said an October report on the previous STAR bonds showed Irwin was $3.4 million short of the minimum.

 

“The ignorance of the requirement, unwillingness to comply or inability to meet the requirement for the existing project should be a concern to Kansas Department of Commerce when considering approval of the city’s new request,” Imming said.

 

Initially, Topeka city officials and Jayhawk Racing’s attorney John Frieden proposed a novel method of matching the investment guideline on $5 million in new bonding.

 

They pointed to a $15.3 million appraisal of the motorsports facility and suggested that represented the actual value of Irwin’s reversionary interest. After the city used bond proceeds to pay Irwin and CoreFirst, they proposed, Irwin would contribute $5 million of his excess reversionary interest to the project. The commerce department and the Legislature’s auditors rejected the plan. In effect, Irwin would have been allowed to sell his interest in the track and count that as an investment in the track.

 

Frieden’s law firm submitted a letter to the commerce department in September listing 16 hypothetical upgrades to Heartland Park costing $5 million to $7 million. Contents of the document remained confidential until unearthed in February through a KORA filing.

 

Imming said the list submitted by Irwin’s attorney carried no legal weight but appears to have been accepted by the state as valid.

 

“The city council did not approve the amended project plan provided the Department of Commerce,” Imming said. “This is not a function that can be delegated.”

Share this post


Link to post
Share on other sites
Chevy Nick

Kansas City-area firm favored by city officials to lease Heartland Park

 

A Missouri businessman who held interest in a Kansas City drag strip closed in 2011 emerged Monday as the front-runner to lease Heartland Park in Topeka if the city council moves ahead with debt restructuring to save the motor sports complex.

 

The Topeka Capital-Journal learned city staff concluded newly created Shelby LLC, led by Monopoly Acquisitions’ executive Chris Payne of Raytown, Mo., was best equipped to breathe life into the dirt, drag and road racing facility operated for more than a decade by Jayhawk Racing’s Ray Irwin. City staff evaluated four applications submitted in December.

 

Payne was part of an investment group that owned Kansas City International Raceway, anchored by a drag strip, when it was sold for $1.5 million to Kansas City, Mo. KCIR was acquired by the city to build a public park.

 

Monopoly Acquisitions is primarily associated with commercial buildings, strip malls and apartment dwellings, but Payne’s background includes the KCIR ownership and time behind the wheel of race cars.

 

In recent years, Payne attempted to purchase Heartland Park and explored the potential of constructing a new track in the Kansas City metropolitan area.

 

“We always had an eye on Topeka versus building another one in Kansas City,” Payne said. “We’ve kind of been waiting in the wings. We jumped at the opportunity ... to voice our interest in it.”

 

He said the Heartland Park situation contrasted with his KCIR experience because Topeka officials were motivated to build up the racing industry rather than maneuver as people did in Kansas City to shut down a track.

 

“This is a unique situation,” Payne said. “In my prior history of racing, I was fighting the city to race. It’s the complete opposite. I think that it’s great there are so many people trying to see that the track survives, including the city.”

 

A final decision on the management of Heartland Park and a series of pivotal financial arrangements must be approved by the Topeka City Council. With four new members on the council, a May 5 vote was scheduled to ascertain whether a majority want to proceed with a plan for the city to acquire clear title to Heartland Park before leasing or selling the property.

 

Details about the length of a potential lease or annual compensation paid to the city wasn’t disclosed pending future negotiations. Payne’s attorney, Wesley Carrillo, said the objective was the establishment of a lengthy business partnership with Topeka.

 

“Any lease terms are going to be long term,” Carrillo said. “We’re not looking at a year-to-year situation.”

 

Topeka City Attorney Chad Sublet confirmed a controversial financial guarantee to the National Hot Rod Association for races set for May would be dropped. In an attempt to retain NHRA’s presence at Heartland Park, the organization was guaranteed a return of $1.8 million by the city. If race revenue were to fall short, the city was obligated to pick up half of a net revenue deficit up to $900,000.

 

The evaluation process revealed Payne had the greatest potential to successfully operate Heartland Park and develop the property, said Doug Gerber, the city’s director of financial and administrative services. He said Payne’s notions about commercializing 270 acres of open ground around the track and his established contacts in the racing industry were points in his favor.

 

“Those are the three factors that really made Shelby stand out among all the proposals,” Gerber said.

 

Payne said he had contemplated the potential of adding a motorcycle dirt track, a convenience store affiliated with a chain restaurant, the rental of large storage units and leasing of warehouse facilities to automotive companies engaged in research and development.

 

Under a strategy initially advanced last year but peppered by controversy, Topeka City Manager Jim Colson recommended the city and state collaborate on issuance of $5 million in a special type of municipal bond to provide cash necessary to buy Irwin’s residual interest in the track and cover Irwin’s track debt to a Topeka bank.

 

Obtaining an unchallenged title to Heartland Park would allow payment of new bond debt and more than $8 million in old bond debt with a combination of state and city sales taxes. It is possible local property tax revenue would be required to fill year-to-year revenue shortages, depending on the final repayment schedule.

 

The intent is to pay Irwin $2.4 million for his “reversionary” interest in Heartland Park and allocate $1.9 million to cover Irwin’s default on debt at CoreFirst Bank and Trust. The city owns the racing facility, but needs to acquire Irwin’s reversionary right to claim the Heartland Park property when all bond debt was paid around 2025.

 

Payne’s company wouldn’t assume responsibilities at Heartland Park until after completion of the bonding transaction in mid-2015, the city’s attorney said. Sublet said any contract with Payne wouldn’t include a reversionary interest.

 

Sublet also said elected officials on the city council and the general public would have opportunities to pose questions and comments about the evolving Heartland Park proposal.

 

“The governing body has got to weigh in,” he said. “We want the citizens to weigh in as well.”

 

Topeka resident Chris Imming, who attempted to force a public vote on the Heartland Park deal, has a pending appeal of lower court decisions before the Kansas Supreme Court.

 

Meanwhile, the Kansas Legislature’s auditing arm completed in March an analysis of the idea of issuing a second set of State Tax Revenue Bonds for Heartland Park. Revenue from the racing facility was inadequate to meet expectations when $10 million in STAR bonds were sold for Heartland Park in 2006. The city has been subsidizing repayment of those bonds for years.

 

State auditors concluded expansion of the bond repayment district beyond Heartland Park could generate sufficient revenue to pay both sets of bonds. Auditors emerged from that review with a set of recommendations for reform of Kansas law on STAR bonds to hold municipalities and private business partners more accountable.

 

Topeka city officials also assessed bids submitted by MK Investments; Larry Sinks; and International Motorsports Entertainment and Development Corp.

 

In February, individuals involved in MK Investments sold a stake in Lakeside Speedway. Michael Johnson and his wife, Kyle Johnson, agreed to sell their interest in that track to business partners Don and Donna Marrs after the Marrs’ leveled fraud allegations against the Johnsons.

 

Sinks was owner of JoeCollege.com, which in 2008 was ordered to pay Kansas Athletics Inc. $660,000 in attorney fees and expenses resulting from a legal dispute over his KU-themed T-shirts.

 

IMEDC, based in Coon Rapids, Minn., had been active in developing NASCAR and NHRA complexes in the Midwest.

Share this post


Link to post
Share on other sites
Chevy Nick

Here are images from the presentation materials at the Topeka City Council meeting:

 

HPTPresentation1.jpg

 

HPTPresentation2.jpg

 

HPTPresentation3.jpg

 

HPTPresentation4.jpg

 

HPTPresentation5.jpg

 

HPTPresentation6.jpg

 

HPTPresentation7.jpg

 

HPTPresentation8.jpg

 

HPTPresentation9.jpg

Share this post


Link to post
Share on other sites
Chevy Nick

One of the concerns voiced in the Heartland Park STAR bond issue is that the citizens Topeka should have a vote in the city owning the racetrack. Well guess what? They already did....

 

Thanks to Topeka Capital-Journal for the research on this. On April 4th, 1987 the residents of Topeka voted 13,289 to 12,579 to issue $7.5 in bonds to build what would become Heartland Park Topeka.

 

1987Election.jpg

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×