September 3, 2009 in City

Track pact in danger

Unpaid bills prompt default notice
By The Spokesman-Review
 

On the Web: A copy of the county’s default notice to Austin Motorsports can be read at www.spokesman.com.

Facing a possible $1 million lawsuit from local builders, Spokane County told the operator of its West Plains racetrack Wednesday he has 60 days to pay the builders or lose the contract he won just nine months ago.

County commissioners approved a formal notice of default to Bucky Austin, of Austin Motorsports Management LLC, contending he is breaching four areas of his contract, including not paying for some renovations earlier this year at the Spokane County Raceway. Four contractors have filed liens against the county totaling more than $1 million, and two other contractors reportedly have not been paid.

Austin assured county officials in early July that contractors would be paid, and agreed to obtain a bond or take out a loan to ensure payment. That hasn’t happened, and commission Chairman Todd Mielke indicated Austin’s assurances have worn thin.

“Actions always speak louder than words. I’m at the point where I need to see actions,” Mielke said.

The 60-day notice means the contract wouldn’t be terminated until the racing season concludes at the beginning of November, he added.

Neither Austin, a racing enthusiast who owns a string of auto repair shops, nor Cindy Gibbs, the spokeswoman for his Spokane track operations, could be reached for comment Wednesday.

An attorney for several of the contractors said he was glad the county was taking a tougher stance on Austin’s failure to pay. The contractors filed a claim with the county’s Risk Management Department in July, contending the county was negligent in overseeing its contract with Austin, attorney Jason Piskel said.

“We’re waiting out our statutory time before we file a lawsuit,” he said.

Although Piskel said the final decision to file suit has not been made, the county’s chief civil deputy, Jim Emacio, acknowledged the county expects a suit if Austin doesn’t pay the bills.

While Austin ordered the work, it was done on county property, Piskel said. If Austin Motorsports doesn’t have the resources to pay for the work, he said, “the county’s going to bear the brunt of it.”

When Austin was picked to operate the track last December, county officials hailed the 25-year agreement as a way to save taxpayers from being stuck with the cost of the facility, which the county bought for $4.5 million after previous owner Orville Moe went bankrupt.

Monthly payments from track operations were supposed to repay the money the county borrowed to buy the 315-acre site. Mielke and Commissioner Mark Richard defended the purchase as a boost for economic development. Commissioner Bonnie Mager opposed the purchase of the track but said the county owed Austin “a whole lot of gratitude” for reaching the agreement.

Austin agreed to make $2.3 million in track improvements over two years, but he opted to make most of them this spring before the 2009 season started. He paid about $1.2 million in construction bills, but in June contractors began notifying the county they weren’t being paid.

Mielke said it was Austin’s choice to speed up renovations, and the notice of default contends he didn’t receive the necessary approval from county officials for some of the work. He also didn’t get a performance bond to ensure payment, which was required in the contract.

After a meeting with county officials in early July, Austin said in an interview he would get a bond or borrow the money to pay the contractors “as quickly as possible.” He blamed his construction manager for failing to get the bond required in the contract.

But county officials were later told Austin couldn’t get a bond because the work was completed, and he was having trouble borrowing money because of stricter loan requirements, Mielke said.

If Austin doesn’t comply with the contract in 60 days, the county could take over the track and look for a new operator in the off-season.


There are three comments on this story. Click here to view comments >>

Get stories like this in a free daily email