CHARLOTTE, N.C. (CN) – Charlotte Motor Speedway claims its home city and county reneged on promises of $80 million in incentives to for the Speedway to stay put instead of moving out of town, and to help it build a drag strip next to its NASCAR racetrack.
The Speedway sued the City of Concord and Cabarrus County in Cabarrus County Court.
The racetrack claims that nearly 9 months passed between the city’s and county’s promises of the $80 million in incentives and their delivery of a written document, which the Speedway anticipated would be little more than the formalization of a “valid and enforcement contract.”
But the Speedway says it shocked to find that “the proposed formal agreement contains terms that were never agreed upon or even so much as mentioned during negotiations that culminated in the agreement or at any time.”
“The ‘new’ terms include, but are not limited to, provisions that would require SMI [co-plaintiff Speedway Motorsports Inc.] to spend tens of millions of dollars within only three years to construct extensive public transportation infrastructure improvements, but would allow the Local Government up to forty years to reimburse SMI, and furthermore provide that SMI would receive and keep the reimbursements only if SMI operates the Speedway and Dragway in Concord/Cabarrus for at least 40 years,” the complaint states. “These supposed terms were never agreed upon or discussed and are wholly unreasonable. SMI, accordingly, rejected the new terms.”
The racetrack claims the promised incentives were all that kept it from packing up and moving after a dispute arose over the development of a drag racing track to host events under the auspices of the National Hot Rod Association.
When the local governments passed ordinances to block the project, Speedway CEO O. Bruton Smith announced he was moving the track and would build the dragway elsewhere.
That touched off a bidding war with other North and South Carolina communities eager for the hundreds of millions of dollars of economic activity generated by the three NASCAR cup series races each year, the complaint states.
Concord and Cabarrus ultimately won out by promising $60 million for financing, design and construction of infrastructure to support the new drag strip in no more than 36 months, and an additional $20 million within 36 months after that, the Speedway says.
Based on those promises, the went ahead with the drag strip project even before a written contract was signed, in the hope of hosting an NHRA event from Sept. 11-14, 2008.
But on the day the Dragway opened, the municipalities held a press conference at which they said that they could not come up with the entire $80 million in the time the Speedway had anticipated, and they claimed that the financing mechanisms and schedules had never been set anyway, according to the complaint.
“The local governments knew or but for wanton and reckless disregard should have known in November 2007, before they sent the agreement to Mr. Smith, that it was impossible for the local governments to fund the $80 million in 30 months,” the complaint states.
“At no time prior to SMI’s completion of the Dragway did the City or County disclose that they would not fund the $80 million within the 36-month period as represented or that it was impossible for them to do so.”
In the meantime, the plaintiffs say, they spent $ 4 million on public improvements, which are reimbursable under the agreement.
The Speedway seeks an order of specific performance of the original agreement and damages for breach of contract and reckless misrepresentation.
The Speedway is represented by William K. Diehl Jr. with James, McElroy & Diehl, of Charlotte.