Local governments ask for dismissal of Lowe’s Motor Speedway suit over incentives

By Bob Pockrass - Associate Editor

Tuesday, December 01, 2009

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CONCORD, N.C. – The city and county governments in the area of Lowe’s Motor Speedway contend in court documents that they can’t be sued for breach of contract nor forced into a formalized agreement with Speedway Motorsports Inc. that would give SMI $80 million in grants and tax incentives for renovating LMS and building a drag strip across the street.

SMI Chairman Bruton Smith had threatened to move LMS in October 2007 if he did not get the permits to build the drag strip on land near the existing 1.5-mile oval. As other area governments began offering incentives, the City of Concord and Cabarrus County offered an $80 million incentive package in November 2007 – with the details to be worked out later – to keep LMS where it’s currently located.

The local governments and SMI never reached a formal agreement, and SMI, which says it has spent $4 million already on public improvements it claims are reimbursable, filed a lawsuit in September in North Carolina Superior Court in Concord.

SMI asks for a judgment requiring the governments to take all necessary action to formalize an agreement and damages for breaches of the agreement and misrepresentations.

In a filing last week, Concord and Cabarrus County ask that the case be dismissed. Both the city and county state that their elected boards had not approved a contract, which must go through public hearings, and therefore they had no enforceable agreement.

“The City denies that a contract was formed; because many material details had yet to be determined, the parties had merely agreed to agree,” the City of Concord says in its motion.

The City of Concord also alleges that SMI did not act in good faith, terminating negotiations after the initial offer.

The governments’ proposed agreement, filed as an exhibit in the case, requires SMI to spend $60 million on the drag strip, which now has been completed, within one year and $200 million on the speedway and various roads over three years. It also requires SMI to have three Cup events at the race track for each of the next 40 years, as well as to operate the drag strip for 40 years or else SMI would have to repay any of the incentives and grants it already had been awarded.

In its complaint, SMI claims the wording in the contract allows the governments 40 years for the $80 million to be paid. SMI claims the governments want to avoid their obligations.

In its response, the City said a judge cannot force it to sign a deal.

“Courts have no power to mandate municipal legislation, and the decision to enter a contract is political, not judicial,” the City says.