Public’s NASCAR cost could hit $200 million

Published 9:00 pm Wednesday, October 6, 2004

OLYMPIA – The private developer that wants to build a NASCAR track in north Marysville told state legislators on Wednesday that the company would contribute up to $50 million, plus any cost overruns, for the $250 million project.

That would leave the public on the hook for as much as $200 million, according to information provided to legislators in a special hearing by a team of public and private officials.

Track proponents said the public’s contribution would be paid back in the coming years through sales taxes generated by race fans.

A panel from Snohomish County, Marysville and International Speedway Corp., of Daytona Beach, Fla., also revealed other details of the plan:

* The public would own some or all of the 850-acre facility, and ISC would lease it.

* Grass parking lots covering 300 to 500 acres could be managed as athletic fields and parks when there are no races.

* Owners of about 70 land parcels would need to sell and relocate.

* The officials are exploring mass-transit options, including extending Sound Transit train service north from Everett to a spur line along the track site’s eastern edge.

* The track length would be seven-eighths of a mile. The ISC plan calls for racing to begin in 2009.

Earlier total project cost estimates of $300 million were adjusted down to $250 million, and possibly less.

Paul Roberts, a senior policy analyst for Snohomish County Executive Aaron Reardon, explained that the $50 million difference was deleted because it was a rough estimate of off-site infrastructure improvements that would need to happen with or without the track.

Marysville’s city administrator, Mary Swenson, would not comment when asked if a new I-5 interchange near 152nd Street NE was still in the plan.

Proponents, including state Sen. Dave Schmidt, R-Mill Creek, said the public portion of the track financing would be paid back over perhaps 25 years by new sales taxes generated by the track.

“So there is no hit to the general fund,” Schmidt said. “As a sales tax-based state, that’s great, because (race fans) come, they spend their money and they go home.”

The financing plan depends on two big assumptions. First, revenues would have to live up to the track’s rosy economic predictions. A study commissioned by proponents figured the track might generate $66 million to $98 million annually statewide. Projected sales taxes from that race-related spending would be used to pay back the construction bond.

If the track draws NASCAR’s big-league Nextel Cup series, as expected, those numbers should hold, Schmidt said.

“To me, there is no question we will see an increase in revenue,” he said.

Second, legislators would have to approve a special plan similar to one created for the Everett Events Center and other facilities to allow using sales taxes in that manner.

Not all legislators share Schmidt’s enthusiasm. Rep. William Eickmeyer, D-Belfair, said urban areas have already been “exceedingly successful” with economic development, while rural areas have lagged far behind.

“Why would the state not want to locate (the track) in an area where the cost factors would be lower and the impact greater?” Eickmeyer said.

Rep. Dan Roach, R-Bonney Lake, asked Lee Combs, senior vice president of ISC, how committed the company would be if lawsuits by opponents were to delay the track’s opening beyond 2009.

“Are you in it for the long haul?” Roach asked.

“Good question,” Combs said. “I’m not sure I’ve got a perfect answer.”

His company is beholden to shareholders and can’t wait forever, he said.

On the other hand, Combs continued, “We believe strongly that this is an area of the country that will be successful.”

Rep. Bruce Chandler, R-Olympia, asked Combs what risks taxpayers would be asked to take and what risks ISC would assume.

Combs said NASCAR – ISC’s sister company – cannot guarantee that any track would get its most popular and lucrative Nextel Cup series beyond one year. If a track had a long-term contract, the track’s owner might not feel as compelled to make the periodic and costly safety upgrades that NASCAR requires.

“That’s why the annual contract is the mechanism (NASCAR) uses to make sure that racetrack owners continue to upgrade their properties,” Combs said.

The risk for ISC is that those upgrades could cut millions of dollars out of the company’s profits, he said.

Rep. John McCoy, D-Tulalip, asked about racetracks with strong NASCAR traditions such as in Rockingham, N.C., which lost its Nextel Cup race.

“What are the lessons to be learned for us?” McCoy asked.

Combs said Rockingham’s fate is unlikely for Marysville. NASCAR’s business strategy is to expand near major metropolitan areas and television markets such as Seattle.

“Rockingham is a town of probably 5,000 people,” Combs said. “A facility like that cannot stay in the hunt.”

Some fans and critics showed up at the hearing.

Carla Brown, an Arlington resident active with Snohomish County Citizens Against a Racetrack, said she thought the panel was “lowballing” the price.

She also doubted claims that the track would attract adjacent retail development.

“There’s just no room,” she said.

Lt. Gov. Brad Owen said legislators would meet with residents somewhere in Snohomish County soon, possibly in November.

Reporter Scott Morris: 425-339-3292 or smorris@ heraldnet.com.