DALLAS — A continuing legal dispute has delayed Topeka, Kan.'s plans to issue $5 million of sales tax and revenue bonds to buy a financially troubled auto racetrack.
The city announced plans to delay the bond sale while the Kansas Court of Appeals considers granting a stay in a lawsuit challenging the city's purchase of Heartland Park from a private owner.
The city claims that buying the track for $5 million would be more cost-effective than letting the facility close. The city would face an $8 million deficit if the tax increment district lost the revenue-producing racetrack. STAR bonds are used in tax-increment districts where city and state sales tax revenue goes toward debt service on particular projects.
With revenues from the track falling short of debt service, Topeka officials planned to buy the track outright and enlarge the STAR district.
"In the simplest terms, the city is purchasing Heartland Park for $5 million dollars, and in exchange, is receiving $16.4 million dollars in sales tax revenue from the state," officials explained on the city Web site.
"Many people have seen this as the city getting into the racing business which is in no way the plan of the city," according to the statement. "To repeat: the City of Topeka has no interest or plans to run a racetrack. The city is in the process of identifying a management group with expertise in the racing industry and the financial ability to effectively manage the track."
In November, Shawnee County District Court Judge Larry Hendricks ruled that a petition seeking a public vote on the city's purchase of Heartland Park was invalid.
On appeal, the leader of the petition drive Chris Imming is seeking a stay on the lower court's ruling.
"Delaying the sale until the appellate court has considered the petitioners' motion for a stay will reduce uncertainty for potential bond investors, allowing the City to capture the best bond rates possible," city spokeswoman Suzie Gilbert said in a prepared statement. "Should the appellate court's decision be favorable for the City, the bonds will be taken back before the governing body for final approval."