The Newton City Council unanimously approved an amended development plan for the Iowa Speedway during a special meeting Thursday night.
The goal of the amended development plan is to provide operating capital to the Iowa Speedway that will be used to upgrade existing infrastructure and to build new infrastructure in advance of an anticipated NASCAR Sprint Cup Series race event. Iowa Speedway has long been considered to be at the top of the list for any new race dates in the world’s premier racing circuit.
Iowa Speedway communications director Craig Armstrong was present at the meeting and was asked by Mayor Michael Hansen to describe what the amended deal would mean for the speedway.
“We’ve come as far as we can with the product we offer, and it’s a great product,” Armstrong said. “Iowa Speedway generates a direct economic impact of $60 million … when we get a Cup race, that will go to about $200 million.”
He said Iowa Speedway was perfectly positioned geographically and that race fans, drivers and team owners consider the race track to be “the greatest speedway in the world.” He said that should be a matter of civic pride for the entire community.
“It is for me,” he said.
The new amendment changes the minimum assessed value agreement for the speedway property — the minimum amount at which the speedway may be taxed — from $40 million to $20 million. During discussion of the proposal, Acting City Administrator Bryan Friedman explained that most properties in Newton do not have Minimum Assessment Agreements because they do not generate revenue like major businesses or Iowa Speedway.
The change has the potential to create a nearly $600,000 shortfall in paying down the city’s bonds for the Speedway Urban Development TIF District. Currently, the speedway is more than covering the city’s annual bond payment on infrastructure installed in its vicinity.
“Not one cent — not one penny — of debt service levy is going to the speedway,” Hansen said.
In the seven years since its inception, Iowa Speedway has generated $600,000 in property tax revenue, $715,000 in ticket surcharge revenue, and $814,000 in direct interest payments to the city.
The potential shortfall would be covered by enacting a $4 ticket surcharge for all events at the Iowa Speedway and by merging the Speedway TIF District with the adjacent Prairie Fire TIF District. Friedman pointed out many of the infrastructure improvements that have benefited the Prairie Fire district were paid through the Speedway district.
Currently, the Prairie Fire district has more than $200,000 each year in excess tax revenue that could be applied to the Speedway district’s indebtedness if the two were merged. Such a merger into a “Super-TIF District” is allowed by state law.
The speedway would only need to have an attendance of 100,000 across all of its events in 2014 in order to cover the remaining $400,000. Excess revenue generated by the surcharge would be used to pay down the district’s indebtedness faster, saving the city interest fees in the future.
During the public hearing portion of the meeting, no written comments were received, but two citizens did come forward with their concerns.
Joyce Moen said she doesn’t go to races, but isn’t opposed to Iowa Speedway. However, she said it was difficult to support the proposed changes to the agreement when the City Council had recently adopted more stringent enforcement of its nuisance codes without a means for assisting low-income homeowners who are struggling to meet the new demands.
Beverly Morris provided the council with a print out of a posting to the Newton Independent news blog and the associated comments, many of which were critical of the proposal.
Daily News Editor Bob Eschliman may be contacted at (641) 792-3121, ext. 423, or at firstname.lastname@example.org.