STAR Bond District Expansion Proposed; Heartland Park Deal Announced
TOPEKA, Kan. - An agreement between the City, State, and Jayhawk Racing will pay off for Topeka, and secure the future of racing in northeast Kansas. Topeka City Council members on June 17th approved a measure that could lead to a Sales Tax Revenue (STAR) Bond district expansion around Heartland Park property, increasing revenue for the City of Topeka.
“This project will significantly benefit Topeka going forward, both economically, and in allowing Heartland Park to continue as a world-class motorsports venue,” City Manager Jim Colson said. “The proposed plan addresses a significant cash flow challenge for the City. In addition, it allows us to enhance the economic impact of Heartland Park and it positions us to address blight and economic issues in the Topeka Boulevard corridor.”
In the plan, the City would agree to issue approximately $4.7 million in new STAR bonds to acquire Heartland Park and all associated property from owner/operator Jayhawk Racing, free of encumbrances. STAR bonds provide Kansas municipalities the opportunity to issue bonds to finance the development of major commercial, entertainment, and tourism areas, and use the sales tax revenue generated by the development to pay off the bonds. Total debt service will be more than $6.3 million, and will satisfy loan payments to CoreFirst Bank, the Small Business Association, the Kansas Department of Commerce, and Jayhawk Racing, LLC.
The Kansas Department of Commerce supports expanding the STAR bond district north on Topeka Boulevard to Croix Street, to encompass several properties, including White Lakes Mall. The expansion will allow the City to address the added debt service with an increased revenue stream. The City will reap the State’s portion of sales taxes in the expanded district – a move that’s projected to generate about $17 million over the next 12 years, satisfying the total debt service of the deal. The new district boundaries are expected to bring in more than $8.6 million total over current boundary revenues.
Heartland Park has an annual $160 million economic impact, making it an important contributor to Topeka’s economy. Kansas Commerce Secretary Pat George says the decision to extend the STAR bonds district will be a boon for Topeka and northeast Kansas, and will enable the park to attract even more visitors.
“With the MARS plant now in operation, the timing is right to extend the STAR Bonds district, increasing economic development around the track and along Topeka Boulevard,” George said. “This decision will enable Heartland Park to remain competitive in the racing world and spur additional growth in the region.”
In February 2015, Jayhawk Racing will assign all rights and reversionary interest of Heartland Park over to the City of Topeka, and the City will have clear title and management of the property and race track. Operations at Heartland Park Topeka will remain the same until the transfer is complete. In the meantime, the City will seek a purchaser or operator for the complex; officials hope to have an agreement in place by the closing of the property.
Ray Irwin, president of Jayhawk Racing, LLC, and owner and operator of Heartland Park Topeka, says this is the perfect opportunity to maintain what he’s spent more than a decade working to create.
“I am extremely pleased that the City of Topeka and Heartland Park Topeka will be joining together in this new agreement, assuring our mutual goal of continuing the excellence and tradition of NHRA and other highly visible events at Heartland Park,” Irwin said. “Equally important is that this agreement also provides additional property for the City to use in its ever-improving economic development of Topeka. Since my involvement more than 12 years ago, the City of Topeka, the State of Kansas, and Heartland Park Topeka have worked hard to re-establish Heartland Park Topeka as a premiere Motorsports and Entertainment facility. The results of those collaborative public-private efforts have been highly successful; returning Heartland Park to being a centerpiece for the Topeka community and a major source of economic growth and benefit for Topeka, Shawnee County and the great State of Kansas.”
“I am proud of how the parties came together to address this long-term economic development challenge in our community,” Mayor Larry Wolgast said. “We thank Secretary George and Ray Irwin for their efforts. The City’s interest is in protecting the public investment and allowing us the best opportunity to service existing public debt. As stewards of taxpayer money, the motivation of the City is to support the facility as a major economic development hub in the community, in order to generate income and associated tax revenues.”
Topeka voters authorized the issuance of general obligation bonds for the acquisition and construction of a motor sports raceway at Forbes Field in April 1987. The Topeka City Council gave its authorization five months later, and soon after that entered into an operational agreement with Lario Enterprises, Inc. Heartland Park, under Lario, closed in 2002, then was purchased by Jayhawk Racing Properties, LLC, in 2003.
Heartland Park has grown into a multi-million dollar complex, including a quarter-mile drag strip with 23 luxury suites, a 2.5-mile championship road course and a 3/8-mile dirt oval track. The track underwent a $20 million renovation 2003 that added 33 garages, a state-of-the-art tech building, and a new timing and scoring building for road course events.