State revs up for run at NASCAR track

By Emily Heffter and Jane Hodges
Times Snohomish County bureau

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Community leaders in Snohomish, Thurston, Kitsap and Mason counties believe a track could diversify the region's economy, but it's state lawmakers — and a new governor — who ultimately will determine just how badly Washington wants an estimated $140 million track that seats 75,000.

Florida-based track developer International Speedway Corp. (ISC) has begun its homework on Washington. The firm hired Preston Gates & Ellis to advise it on state business law, and Gogerty Stark Marriott, the Seattle firm whose principal, Bob Gogerty, managed Paul Allen's 1997 campaign to build Seahawks Stadium, to meet with political heavyweights.

ISC also hired lobbyist Mark Greenberg, who represents NASCAR sponsor Anheuser-Busch. Since May, Greenberg and ISC representatives have visited gubernatorial candidates Ron Sims and Dino Rossi and are working to schedule a talk with Christine Gregoire.

Because ISC hasn't named a preferred site or explicitly discussed what it wants from the state, some legislators aren't ready to talk about what they're willing to offer. Lawmakers may be wary of more big-budget bills related to economic development, since the state just passed a $3.2 billion package to convince Boeing to build its new jetliner, the 7E7, in Everett.

"There seems to be a feeling that ISC is going to do basically what Boeing has done, so there's potentially going to be a competition," said state Rep. Brian Sullivan, D-Mukilteo. "Can you blame them for going to Oregon and Washington at the same time and saying, 'Who's going to cut us the best deal?' "

Others, who opposed construction of Seahawks Stadium — which required $300 million in public funding — are suspicious that a racetrack deal could carry hidden expenses.

Luring a NASCAR track to Washington Incentives may include new laws and elements of previous deals Tax-increment financing, a perennial topic in Olympia, is the buzz among NASCAR-friendly lawmakers. It's calculated by subtracting the tax (such as property tax) paid on an undeveloped property from the higher taxes that would be paid if the property were developed; the difference (or "tax increment") is used to pay down infrastructure costs (such as bond-funded road improvements) incurred for the project. Because the money comes from the difference between the original and new taxes, it doesn't remove the original amount of tax revenue from a local jurisdiction's budget, which means a locale offering the financing doesn't lose tax revenue by doing so. To woo the 7E7 jetliner last year, the Legislature passed a $3.2 billion, 20-year tax break for the aerospace industry that would go into effect only if the 7E7 were built here. Other aspects of the deal included cost savings for Boeing on unemployment and workers' compensation; a worker-training center; transportation improvements; state staff members committed to responding to Boeing needs; permits and assistance from the city of Everett; improvements to the Port of Everett; and the right for Boeing to operate 7E7 tests 24 hours a day, seven days a week, as long as it obeys noise-abatement laws. Seahawks Stadium: In 1997, voters approved a $300 million funding package partially financed through taxes on hotel rooms, parking and admissions taxes, lottery revenues and sales-tax breaks. Safeco Field, which opened in 1999, was financed through a $372 million public package that included a sales tax on restaurants and rental cars inside King County, an admissions tax, lottery revenues and commemorative license plates. The state also returned a percent of the sales tax collected in King County, and the King County Council passed an ordinance to sell bonds to help fund the stadium construction. Intel announced it would build a computer plant in Pierce County in 1995 after the Legislature eliminated the sales tax on equipment and machinery for manufacturing businesses and agreed to speed up construction of a DuPont freeway interchange. Information on past deals compiled from Times news sources by researcher Gene Balk.

Rep. Bob Sump, R-Republic, is a self-described "NASCAR nut," but he said he'll favor a track only if the financing makes sense for taxpayers. "I'm philosophically opposed to government getting involved to the extent they did [for the Seahawks Stadium], of financially subsidizing the project," Sump said.

Sen. Mary Margaret Haugen, D-Camano Island, also opposes a track. A ranking minority member of the Senate Highways and Transportation Committee, she could help block track-related transportation improvements.

"I think another tax break for a sports facility is going to be a hard sell," Haugen said.

The Kansas example

Many who support a track in Washington have traveled to NASCAR races at ISC tracks in Kansas, California and Florida.

Rep. Gary Alexander, R-Olympia, supports the track. He traveled to ISC's Kansas Speedway last fall and is helping leaders in Thurston County finish proposals to ISC.

He assumes ISC will approach Washington the way it did Kansas. There, once ISC decided on a site, the company gave state legislators the numbers: A 150,000-seat track would cost $250 million to build, and ISC would provide roughly half. The state and Wyandotte County then had six months to agree on how to fund the remaining $120 million and make permitting decisions, said Jim Thompson, president of the county economic-development agency.

In Kansas, state officials came up with the $120 million in a package of legislation that:

• Changed tax-increment financing laws (extending deals to 30 years from 10) and allowed for roughly $70 million in tax-increment financing. (For more on tax-increment financing, see box with this story.)

• Allowed the use of $25 million worth of "Star" bonds (issued against future sales-tax revenue) for a neighboring tourism and retail district.

• Allowed ISC eminent domain to buy 146 residential lots and farmland at 125 percent of fair-market value.

• Approved speeding up $40 million worth of previously planned road projects.

Making decisions

ISC told Washington state legislators in February that it would like to make a site decision by the end of 2004. Absent a site to legislate around, state leaders are already thinking about decisions they might make during the 2005 session.

Sen. Tim Sheldon, D-Potlatch, who chairs the Senate Economic Development Committee, said he expects the state will need to shuffle planned transportation projects or pass transportation bills if ISC wants to locate here, a technique Kansas used.

Sheldon, who supports the track, said the state also could offer ISC master-planned permitting, which would allow the developer to obtain all of its necessary permits up front, so as to save time later.

Other leaders believe tax-increment financing (TIF) — an incentive most states can offer businesses — may be the answer.

Washington's constitution allows a limited form of such financing, and legislators have spent the past decade trying to pass bills to make the state's TIF incentives competitive with other states' so Washington can more easily recruit employers.

Last year, Gov. Gary Locke endorsed a tax-increment financing bill that didn't pass, but Alexander said he will amend the bill and reintroduce it in 2005.

Locke's bill would have capped the dollar value of TIF deals at $1 million per year, but Alexander said he plans to propose a higher cap of $25 million a year — or no limit.

While not aiming his proposal specifically at NASCAR, Alexander said the track opportunity might finally spur passage of a bill.

Rep. John McCoy, D-Marysville, is leading work on a tax-increment financing bill designed specifically for the track.

He believes his bill has a better chance of passing than previous attempts that he said were "too broad, too far-reaching." McCoy said his bill would limit the amount of money available and also cap the window of time within which a developer could act — probably at seven years.

Local leaders' efforts

Thus far, leaders and landowners involved with prospective sites either have nominated or plan to nominate themselves for ISC's consideration. Many of their proposals assume support from the state, particularly for road projects.

In Washington, the three counties where landowners are proposing property have taken different approaches.

Snohomish County made a public proposal to ISC in April, pitching a site near Marysville and close to Interstate 5.

Snohomish County Executive Aaron Reardon said he doesn't think legislators will hold the 7E7 deal against Snohomish County, but regard it as proof the county is competitive and can land world-class business.

Kitsap County sent a proposal to ISC in September, but David Porter, Kitsap County Economic Development Council executive director, won't comment on it.

The site is on the Mason-Kitsap county line, south of Bremerton National Airport amid 2,500 treed acres designated for industrial development and near a community drag-racing strip.

In Thurston County, the two most viable sites are in Yelm, where the city has 1,400 empty acres of farmland and other property it annexed in 1993, and in Lacey at a 300-acre site in the Hawks Prairie area west of I-5.

Individual property owners along the I-5 corridor and near Grand Mound and Tenino also may propose land. To date, none of the sites has a completed proposal, said Michael Cade, executive director of the Thurston County Economic Development Council.

Reardon said sites in Oregon may be Snohomish County's — and Washington's — biggest competition, even though many Oregon communities are coming to the table later than those in Washington.

Oregon's Columbia County isn't done with a pitch for land in Scappoose, and the council governing the Confederated Tribes of Grand Ronde has not yet decided whether to pursue a track, said spokesman Brent Merrill.

Other possible Oregon sites include a former aluminum plant in the Portland suburb of Troutdale, which also is being considered for an intermodal truck and rail facility or other industrial uses, said Troutdale City Administrator John Anderson.

The opposition

Snohomish County's very public pitch has roused major opposition from a group that calls itself SCAR (Snohomish County Citizens Against the Racetrack).

John Graham, ISC's vice president of business affairs, says opposition doesn't necessarily discourage the firm from entering a community.

"We don't ever expect for there to be unanimity," he said.

Joe Corsiglia, a county commissioner in Columbia County, Ore., who is helping with the Scappoose proposal, said any location has drawbacks — ranging from community feedback to legislation and geography.

"There are drawbacks everywhere," Corsiglia said. "But those things can be cured by money."

Emily Heffter: 425-783-0624 or eheffter@seattletimes.com;

Jane Hodges: 425-745-7813 or jhodges@seattletimes.com

Copyright © 2004 The Seattle Times Company

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