October 30, 2009 in City

County boots raceway operator; debts remain

Commissioners say not all work OK’d
By The Spokesman-Review
 

On the Web: Read past coverage at spokesman.com/tags/spokane-raceway-park.

Spokane County commissioners Thursday fired the company they hired less than a year ago to operate the county’s Raceway Park, their controversial purchase near Airway Heights that drew crowds this summer but racked up some $1.2 million in unpaid construction debt.

The county’s insurance may be needed to pay contractors that performed work ordered by Austin Motorsports Management but never approved by the county, commissioners said.

Commissioners voted unanimously during a special afternoon meeting Thursday to terminate the contract with the company and owner Bucky Austin, a racing enthusiast who owns a chain of auto repair shops in the Puget Sound region. Despite promises in August and September that he would make good on all outstanding debts for park improvements, Austin still owes money to several local contractors, who have filed liens worth about $1.2 million against him and the county.

The county is looking for a new operator to run the track in 2010, and commissioners expect to keep a “closer, watchful eye” on Austin’s replacement, Todd Mielke, chairman of the Spokane County Commission, said Thursday.

The county learned of financial problems at the track last summer, when contractors began serving notice that they would file liens for unpaid bills. Austin called the liens standard procedure and said he had to review billing to make sure the work was actually done. He promised to pay everybody by November.

But commissioners discovered Austin had ordered more construction than they expected, essentially compressing renovations the county thought would take two years into the first year the track operated. He did so without securing performance bonds, as required by state law, or seeking competitive bids on the projects, commissioners said.

Because of those problems, commissioners said Austin’s contract was in default.

Austin was put on notice in September that he’d lose the contract in 60 days if he didn’t “cure” those problems. He said he would find financing or partners to make payments. But his attorney confirmed this week that “Austin Motorsports Management is unable to find additional financing to continue to operate the raceway,” Jim Emacio, the county’s chief civil deputy prosecuting attorney, told commissioners.

The notice of default had a 60-day time limit, which would have been up Sunday. Commissioners said they terminated the contract three days early because the weather was turning cold and they wanted to have county staff “winterize” the facility as soon as possible.

Asked if the decision was at all prompted by fears Austin’s management company, a limited liability corporation that’s separate from his repair shops, could declare bankruptcy, Mielke would only say: “Rumors abound.”

The county will allow new potential operators to submit bids.

“We hope to find an operator that can continue to operate the track … and maintain its credibility with the community,” Mielke said. “We’re going to do our due diligence with any construction projects that take place.”

The county will also review all the outstanding claims to make sure the work was done, is up to standards and has not been double-billed, Commissioner Mark Richard said. Legitimate claims will be submitted to the county’s insurance carrier for payment.

That process could take up to 60 days. John Black, an attorney who represents seven of the contractors holding some $1.2 million in unpaid bills, said his clients could eventually file suit against the county if they aren’t paid. But it might take about two months to prepare a lawsuit, so the contractors might hold off.

“If in fact there is a commitment to pay, it would make sense to wait,” Black said.


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