NHRA Profit Shortfall Clause Revealed In Heartland Park Negotiations

A report published on Sunday by the Topeka Capitol-Journal regarding the ongoing saga of the city of Topeka’s acquisition of the Heartland Park Topeka racing facility has revealed a number of confidential agreements in place between the NHRA and the facility that could prove to be hurdles in gaining approval from city residents on the plan.

According to the Courier-Journal, the city has a binding agreement with the NHRA that would require the city and/or the track operator to offset any profit shortfalls from the NHRA Kansas Nationals, as well as covering the advertising costs for the annual national event. Per this agreement, the city would pay half of the shortfall if the event doesn’t profit $1,831,000. It also must bankroll $340,000 in advertising costs.

This information was briefly shared with the public on the city’s website as part of a request for proposal package, but was promptly removed due to the confidentiality agreement. This move, of course, upset city residents who felt information was being hidden from them. In the 70-page document were a number of key points agreed upon by the city and NHRA, which holds the city and the owner they choose financially liable, to an extent, for the event.

These key points include clauses that give NHRA power to select the new owner of the facility, specific requirements for the upkeep of the track, the right to audit all of the books and records of the track, obligations of expenses by the track, exclusive use and control of the facility, and other bullet points. But the primary clause surrounds the profit guarantee, in which the city is jointly liable — if there is a profit shortfall and the operator cannot make up the difference, the city is on the hook for half of the difference, split between the city/operator and the NHRA.

Per the agreement, the city must have the rights to Heartland Park Topeka by January 15, 2015, or the NHRA has the green light to terminate the contract in full, thereby eliminating the NHRA Kansas Nationals from the event calendar for the first time in 26 years.

This new information has drawn additional ire from the citizens of Topeka, who were told by city leaders earlier in the negotiations that the city would not invest any additional funds into the track once it’s purchased and subsequently sold. There are reportedly four prospective bidders in line to acquire the track.

The Topeka City Council is expected to reconvene on the matter on January 6, with a potential vote on the table for moving forward with the plan. Courier-Journal reporter Aly Van Dyke points out that that vote may or may not happen in light of this new information. To read the story in its entirety, click over to the Topeka Courier-Journal.