Wednesday, January 05, 2011

Might the Obama/Bush tax cut extensions for motorsports be financial incentive for Metro to keep the speedway?

Considering that the Metro Finance Director called the revenue potential of Nashville's Fairgrounds Speedway "marginal" this week in the latest attempt to remove its obstacle to selling off the Fairgrounds, the Mayor's office might not have exactly welcomed the news that President Barack Obama extended the Bush era tax cuts. One of the Bushian panders that the Obama administration made to racetrack owners—who had been fighting the IRS's attempt to remove them from the sweet tax break categories that amusement parks get—was the extension through 2012 of tax breaks for "motorsports entertainment complexes." This could amount to a $40 million windfall for owners:

Hidden in the fine print of the $858 billion bill were tax breaks of up to $40 million for tracks and other racing venues to finance capital projects, the Washington Post reported. The original bill was to keep the government from raising tax rates, especially on people who earn more than $250,000 a year, and to extend unemployment benefits. The breaks for sports facilities were part of nearly $55 billion in earmarks.

As owner of the speedway, Metro Nashville stands to write off taxes on the property, should the speedway stay operational through 2012. I am a fan neither of car racing nor of Obama's extension of the Bush tax cuts, but this turn of events is a clear disincentive for Metro to move to demolish.

Coincidently, the group attempting to stop the demolition obtained Metro documents that they contend indicate that the Mayor's Office is rushing to demolish with or without the public input on the matter scheduled for later this month in council chambers. According to Save My Fairgrounds:

Save My Fairgrounds has discovered a Request For Proposal ("RFP") to "[c]ommence work promptly" to demolish the Fairgrounds Racetrack.  RFP #10-159 from Metro Parks department calls for proposals for "Master Planning and Design Services for Fairgrounds Park" ….

The RFP describes the site as "currently characterized primarily by…a former racetrack," and states "[t]he project consists of development of a park master plan and construction documents for a roughly forty-acre portion of the tract that was formerly the Tennessee State Fairgrounds in Nashville, Tennessee."

If the speedway is a "former racetrack" then Mayor Karl Dean does not seem to be interested in those Obama/Bush tax cuts. Or maybe ending its status as a racetrack is another deliberate Metro Finance attempt to sabotage Fairgrounds cash flow. More significantly, Hizzoner would not be referring to the racing oval just so if he were not intending to repurpose or to demolish it. Given that there is still financial incentive to keep the track open, the rush to close is strange, unless we see closure as a step that puts Karl Dean closer to his ultimate goal of driving out Expo small business, minimizing the blue collar presence in South Nashville, and cashing in on the conversion of public property to private real estate.


 

HT: Christian Grantham

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