Full Throttle

Plans for the Newton Iowa Speedway have been going smoothly, but now questions are being raised about the financial terms and loans taken out by the developer, U.S. Motorsports Corporation.

Touted as the only track designed by a stock car driver ground was broken in June of this year. Driver, and now track designer Rusty Wallace, along with 7 time ARCA Champ Frank Kimmel and Iowa Gov. Vilsack were among the dignitaries that attended the ceremony. Both the USAR Hooters Pro Cup Series and the ARCA ReMax Series thought enough of the tracks progress and signed on to hold events in the fall of 2006.

Now the old bug-a-boo for projects of this type enters the picture. $70 million dollars was loaned to the developers for the project by a Georgia company, UBG Financial Corp. Questions were raised in April about its financing, its operations and its past projects but were met with silence. UBG also has attracted attention for its apparent role in the pending purchase of the Minnesota Vikings of the NFL. As part of it’s investigation into that deal a Minneapolis Star Tribune reporter said he found “little physical evidence of a company.” The newspaper said the company headquarters were located in a suburban office building where 20 unrelated companies share secretarial staff.

Now nearly eight months later questions are still being raised and a deadline for answers looms today.

A vote by the Newton city council tonight brings into question whether racing will take place - as scheduled - at the Iowa Speedway. US Motorsports, the group backing the speedway, has yet to show the city proof that it has the money to complete the project. It’s a problem that’s plagued them for months.

Nascar style races are scheduled to take place on the track, under construction near Newton, on September 15th. [the USAR Hooters Pro Cup event] The question is will the roads leading ot the Iowa Speedway and its sewer system be complete by the first race. The Newton city council voted unanimously to reject bids for work on the speedway’s infrastructure, citing the developers inability to prove they have the 60-million-dollars or so needed to complete the project..

The Newton City Mayor has put pressure on Newton’s economic development director who in turn has been getting the same promises from the developers. First UBG said they were making “final arrangments for the transfer of money” in July and again in October they stated “We are currently finalizing the terms of our financing.”

They seem to be in a perpetual state of “finalizing plans,” which isn’t surprising considering WHO TV’s investigators discovered UBG’s Dunn and Bradstreet report shows the company “has little - if any - history of financing projects of this magnitude.”

And as I said the deadline is looming very large: A letter from Newton’s city administrator, dated November 22nd of this year, says, “To keep this project on track, proof of financing should be provided before November 28th.”

As those in the Mid-West can testify to there is another “deadline” they better meet. Old Man Winter has blanketed the area with snow in the last few hours - and will only get worse from now until early spring - something not condusive to rushed construction projects.

Who wins the race is up for serious debate. Will it be potential financiers, Old Man Winter or race fans who want to attend Rusty Wallace’s dream in the tall corn of the Iowa plains? As things stand now I wouldn’t be ordering any season tickets.

UPDATE: The Newton City Council has turned down a $1.7 million contract that would start construction of a road adjacent to the Iowa Speedway “until it receives assurances that the developer has the necessary financing to finish the track.”

NASCAR, Auto Racing, Sports