Stuck in idle: Kentucky Speedway falls short of once high hopes 4 years after last NASCAR race

Republished from Kentucky Lantern

SPARTA — By the end of the year, the owners of Kentucky Speedway will have paid Gallatin County more than $900,000 for tickets never sold to races never run.

NASCAR abandoned the racetrack following the 2020 Quaker State 400, but a 20-year PILOT agreement (Payments In Lieu Of Taxes) obligates Speedway Motorsports Inc. to two annual payments through 2031: a $180,000 lump sum and a $1 per ticket fee with a $230,000 minimum, even if the venue remains dark.

Which may well be the way to bet.

Set in a sparsely populated stretch along Interstate 71, far enough from both Cincinnati and Louisville to discourage repeat business from fans who encountered epic traffic, parking and weather problems as the track slowly got up to speed, Kentucky Speedway will mark the fourth anniversary of its last NASCAR race on July 12. The $178 million facility now serves mainly as a temporary home for the Ford Motor Company’s excess inventory and, in turn, as a long-standing frustration for Gallatin County Judge-Executive Ryan Morris.

Gallatin County Judge-Executive Ryan Morris would like to see the 1,000-acre site put to better economic use. (Kentucky Lantern photo by Tim Sullivan)

“We should race in Kentucky,” Morris said. “We should race right here in Gallatin County. That’s my expectation. That’s what I want to see happen. I think it’s good for the community, brings people in, hotels fill up, campgrounds fill up, (generates) tax dollars.

“(But) If we’re not going to race, I don’t want that property to sit empty for another five or 10 years, just used as a parking lot. I want them to talk to us and economic development advisors that we have to market some of the ground for industry. Do you need 1,000 acres if you’re not going to race? Maybe 900 would be enough.”

Running on state subsidies

Kentucky Speedway will mark the fourth anniversary of its last NASCAR race on July 12. (Kentucky Lantern photo by Tim Sullivan)

Though rumors persist that stock car racing may eventually return to Kentucky Speedway, the state appears short on political will and financial muscle. Meanwhile, Speedway Motorsports and a Tennessee-based subsidiary have assigned higher priority and 11 registered lobbyists to doing a deal at the Nashville Fairgrounds. 

And as NASCAR Chief Operating Officer Steve O’Donnell has pointed out in multiple form letters, the big-league stock car circuit is essentially a zero-sum game. Each addition requires a subtraction. 

“The annual assignment of specific racetracks is made on a highly competitive basis, and there is always competition among tracks in different states to obtain a second race (by removing a race from another facility),” O’Donnell has written. “Further, there is competition when a track is currently without a NASCAR race and desires to obtain one, which, due to finite supply of dates, would necessarily have to be taken from another state. In addition to the criteria described above, NASCAR obviously looks more favorably on facilities that, in addition, have the support of their state or local communities.”

Translated: government subsidies can help get you to the finish line.

Reviving stock car racing in Sparta would almost certainly entail poaching a race from another track and would likely require a political push and a funding mechanism not currently in evidence. While other states are providing multi-million-dollar incentives and infrastructure improvements to attract and maintain major motor races, Kentucky lags so far behind that it risks being lapped.

Greg Fante (Louisville Sports Commission)

“As far as a pure war chest or bucket of money that we are tapping into, it doesn’t exist,” said Greg Fante, president and CEO of the Louisville Sports Commission. “We would love to see monies funneled into a bid pool allotment to get us in a more competitive spot statewide, but that’s going to be a long, hard trudge based on where we currently sit.”

The only incentive program available through Kentucky’s Tourism, Arts & Heritage Cabinet is the Tourism Development Act, which enables operators to recoup up to 25% of a project’s cost through refunded sales tax. Though Kentucky Speedway has twice been approved for refunds that potentially totaled more than $44.5 million, the actual payouts have been much more modest. Annual refunds peaked at $1.14 million in 2011 following the first Quaker State 400 staged in Sparta, but they subsequently fell sharply and steadily as attendance atrophied, hastening Speedway Motorsports’ decision to move the race to Atlanta.

Between 2011 and 2019, Kentucky Speedway realized $5.3 million in sales tax refunds, and just $353,000 in 2019. (COVID-19 caused the 2020 race to be run without spectators.) By contrast, Texas’ Major Events Reimbursement Program records show Texas Motor Speedway was able to extract $26.4 million in subsidies between 2016 and 2022. 

In North Carolina, home to multiple NASCAR races and most of the circuit’s race teams, the state’s Motorsports Relief Fund provided $45.8 million in grants to 17 racetracks in 2022, including an $18 million allocation that enabled small North Wilkesboro Speedway to land and retain NASCAR’s All-Star Race after more than a quarter-century of inactivity. According to a press release from the North Carolina governor’s office, the 2023 All-Star Race increased the value of the state’s economy by $42.4 million.

‘Still pretty raw about them pulling up stakes and leaving’

Andrew McNeill

Whether Kentucky has the means, the motivation or the political support for policies that could provide similar incentives is at best unclear. Jason Bailey, executive director of the Kentucky Center for Economic Development, told the Kentucky Lantern (through communications director Adam Raymond) he had nothing to say on the subject. But Andrew McNeill, president of the Kentucky Forum For Rights, Economics and Education (KYFREE) was quite comfortable waving a caution flag.

“I’m not sure that the promised economic impact of NASCAR in Kentucky and that racetrack in Sparta has ever really delivered,” McNeill said. “I simply think over the long run, no matter the amounts or the duration of subsidy, there’s just a limited market for that race in that location to be successful. 

“I think they probably got a little bit over their skis in thinking what the market was for NASCAR racing in the country. I don’t see that there’s any reason to put together any type of subsidy package with the hope of bringing NASCAR back.”

Crystal Staley, spokeswoman for Gov. Andy Beshear, told the Lantern, “Supporting economic development and tourism growth is a top priority for this administration.” Still, Staley said Beshear had not been contacted by track owners or local officials.

Senate Republican Floor Leader Damon Thayer, a former Kentucky Speedway consultant, says the state has done enough to support the stock car track. ( LRC Public Information)

“I feel like the state has done its part over a 20-year period to make (Kentucky Speedway) a first-class sports and entertainment destination and I’m still pretty raw about them pulling up stakes and leaving,” said Damon Thayer, the Kentucky Senate’s majority floor leader and a former Kentucky Speedway consultant. “I don’t think there needs to be any more incentive than what already exists.”

Thayer points to the widening of Interstate 71 along the approaches to Sparta and the completion of Kentucky 1039 to the Indiana line as proof of Kentucky’s commitment to the speedway’s success. Gallatin County’s industrial revenue bond with Speedway Motorsports spares the owners from paying property taxes through 2031.

“Speedway Motorsports just up and pulled out of Kentucky and took the race back to Atlanta with no warning, no explanation,” Thayer said. “So I don’t know why the taxpayers should be on the hook for bringing the place back to life when the owners decided to kill it in the first place.”

McNeill’s response to Thayer’s statements: “If Kentucky Speedway has lost Damon Thayer, they don’t really have anywhere else to go to get the General Assembly behind them.”

Leases with Ford, Amazon

Speedway Motorsports, which acquired Kentucky Speedway from a group headed by Jerry Carroll in 2008, declined an interview request from the Lantern, as did the track’s former general manager, Mark Simendinger. “At this time, we are not granting media interviews regarding Kentucky Speedway,” said Scott Cooper, the company’s senior vice president for communications. Instead, Cooper provided a prepared statement.

“Kentucky Speedway is a modern, multi-use facility which remains open to host music festivals, regional and national motorsports events, corporate entertainment and hospitality, driving schools, RV rallies and storage rentals,” it said. “While there is not a major motorsports event on the calendar for the immediate future, the facility and property is well-maintained and is utilized for track rentals on an annual basis.”  

With 10 other racetrack properties that are all on NASCAR’s schedule, Speedway Motorsports does not appear to be feeling a significant financial pinch from Kentucky Speedway’s prolonged dormancy. The track is not known to be for sale and has been able to offset a significant portion of its overhead by leasing land to Ford and Amazon.

On a recent visit to the track, thousands of Ford vehicles were parked behind the speedway’s grandstand, awaiting distribution. And though the terms of Ford’s speedway deal are not public, a similar arrangement with a Ford subcontractor has generated more than $1.2 million over the last 10 years for the Kentucky Exposition Center.

Still, parked cars would not seem to be the highest and best use for a facility built for speed. Not indefinitely, at least.

“If it’s just not in the cards to race, it could be worse,” said Ryan Morris, the Gallatin County judge executive. “We’ve got 1,000 acres in that location filled with infrastructure. We’ve got water. We’ve got sewer. We’ve got electric, high-speed internet, access to the interstate, good roads in the area. . .

“The urgency for me is I don’t want it to sit idle. I know there are tracks that have sat idle for years and years and years and then they got a race back. I don’t want that track to sit there for 10 years.”

Ford vehicles are parked behind the speedway grandstand awaiting distribution. (Kentucky Lantern photo by Tim Sullivan)

SUPPORT NEWS YOU TRUST.

Kentucky Lantern is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com. Follow Kentucky Lantern on Facebook and Twitter. Kentucky Lantern stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.

Donate to Kentucky Lantern here.

https://kentuckylantern.com/2024/06/14/stuck-in-idle-kentucky-speedway-falls-short-of-once-high-hopes-4-years-after-last-nascar-race/