ROAD RAGE.

• Author: Millman, Gregory J.

A record-breaking financing deal. A top-tier merger. A cash-rich company. A growth-hungry industry. Who wouldn't want to be in the driver's seat?

Perhaps not many people would include stock car racing in the sequence beginning "Baseball ... basketball ... football ... hockey...." Stock car events never had the cachet of, say, Formula One races, where the drivers included the occasional European aristocrat. No, stock car races were at the other end of the class spectrum, defiantly down-home, so rural and Southern that if the concession stands had served "possum sandwiches," nobody would have blinked an eye. But in January of 1999, stock car racing received the ultimate American endorsement as a mainstream sport: a $224-million superspeedway in Kansas City financed with a big chunk of tax-exempt municipal debt.

Kansas solons had in hand a stack of accounting analyses proving that a single weekend of Nascar could generate more economic benefits than hosting the Superbowl. So International Speedway Corp. CFO Susan Schandel was able to negotiate a deal with ample taxpayer support. ISC's equity in the new facility is a mere $78 million. Approximately $24 million of tax-exempt special obligation bonds, called STAR bonds, will be repaid by sales taxes generated from businesses in the speedway area. Another issue of roughly $70 million of tax increment financing (TIF) bonds will be serviced by payments made by ISC in lieu of property taxes. The state department of transportation committed $35 million to improving access roads to the site, and there was a mix of tax credits and other incentives topping off the rata-touille of subsidies.

Of course, there's nothing terribly unusual about public financing of stadiums and arenas for sports like football, hockey, baseball and basketball, but two things make ISC's Kansas project unique. First, no government entity has ever offered that much support to a stock car track before. Second, says Schandel, "In a lot of sports facility deals, the local government owns the stadium and has the right to use it for concerts or anything other than, say, football events.

"But we own the facility outright, and have the right to use it every day. All revenue from the facility is ours - whether naming rights, concessions, admissions, whatever. We were able to negotiate this cutting-edge deal because the Kansas government officials recognized what motorsports can bring to their community."

Greg Carey, a managing director in...