Posted on Sun, May. 11, 2008

Last August, Concord leaders learned that Bruton Smith, billionaire owner of Lowe's Motor Speedway, wanted incentives for a proposed drag strip and track expansion.

Three months passed, and Smith threatened to move his racing complex, before Concord and Cabarrus County worked out a deal he would accept.

The $80 million package included $20 million that local leaders hope the state will pay. If the state doesn't pay -- and there has been no indication that it will -- local taxpayers will be on the hook for the entire amount.

Smith agreed to stay in Concord, spend $200 million to expand the track and build a $60 million drag strip.

Under the N.C. Public Records Act, the Observer obtained more than 1,100 pages of e-mails, letters and other previously confidential documents. Those records and interviews with key players detail what happened behind the scenes:

• Concord City Council underestimated how Smith would react when, under pressure from homeowners near the proposed drag strip, they voted to block the project.

• Even after they realized their miscalculation, weeks slipped by before they developed a pitch to convince Smith to stay.

• Smith dispatched two old friends to negotiate for him, and they brainstormed the deal with public officials.

• To woo Smith, leaders sent him an overflowing fruit basket with pineapple and chocolates shaped like tiny race cars.

• And a last-minute decision cost taxpayers millions more than officials had expected.

Ultimately, leaders concluded that losing the speedway would be too big of an economic blow. So they agreed to a deal they still don't know how to pay for.

Aug. 16 to late September

Smith first told the city of his plans during an Aug. 16 meeting with Concord Mayor Scott Padgett and City Manager Brian Hiatt.Hiatt said Smith gave him a one-page list that mentioned property tax rebates and help with getting state money. The Observer got the memo in its records request.

Smith insists he never asked for incentives and does not remember the memo.

The next week, Smith met with the Cabarrus Economic Development Corp., which coordinates local business incentives. They discussed incentives and asked Smith how he would keep noise down.

Two days later, Smith's company, Speedway Motorsports, faxed an outline of its drag strip plan to local officials "assuming appropriate administrative assistance, financial incentives and infrastructure upgrades can be agreed upon." Smith doesn't recall that document, either.

Working out incentives is usually routine.

Hiatt said the city was waiting for details on how Smith would deal with drag strip noise. And it didn't make sense to discuss incentives before they had a good idea what the money would pay for, he said.

Residents near the drag strip site peppered the City Council with concerns about noise.

On Sept. 7, councilman Randy Grimes asked city staff to draft an ordinance to ban drag strips.

Grimes said many people had told him they didn't want a drag strip so close to their homes. He wanted the option of voting on a ban but didn't think the entire speedway complex would be in jeopardy.

"It was the only way council would have any leverage" on the noise issue, Hiatt said.

In a closed session with the council Sept. 11, Smith said noise would be minimal because dragsters race only a quarter-mile.

He also asked that the council immediately consider whether they favored the drag strip, and if they didn't want it, he could build it elsewhere.

Councilman Hector Henry wanted to see a noise plan before deciding the drag strip's fate. Other council members said noise made the strip a bad idea, but some said they would consider it if noise were addressed.

But Smith, then 80, was used to getting his way. After learning of the pending vote to stop the drag strip, he fumed about "seceding" from Concord and threatened to sue. He also began grading for the drag strip.

Sept. 28 to Oct. 3

Three days before the City Council was to vote, the city met with Speedway Motorsports staff and again asked for noise details.

For about an hour Oct. 1, neighbors in a packed City Council chamber lashed out against the drag strip.

Padgett expected Speedway Motorsports officials to say that night how they would handle the noise, but they didn't. Speedway executive Wes Harris said he could not recall what was said, but that the company always tried to respond to city concerns.

Despite the risk of a lawsuit, Padgett believed the city had no choice. The council voted 6-0 to change the zoning on Smith's property, blocking the drag strip. (Councilman David Phillips was absent; Padgett votes only if in a tie.)

Council members said they were mainly concerned about noise and were not trying to embarrass Smith.

But when Smith heard, he felt insulted and victimized. This was no longer just about a drag strip. They don't want me? he recalled thinking. Fine. I'll go somewhere else.

The next day he threatened to move the speedway.

"We clearly underestimated our opponent," councilman Henry said. "I guess we should've realized he would not take kindly to (Concord) saying no."

When they learned of Smith's threat, council members began talking about reversing the vote. "We screwed up. We needed to rescind that action," Henry said.

Concord, still reeling from a series of massive job losses, could ill afford to lose the speedway complex.

E-mails flew into city hall. Aghast, many people told Padgett and the city to put aside their egos. Others warned Padgett not to let Smith bully him.

Smith publicly scolded Padgett, saying, "I don't know why the mayor of Concord dislikes racing ...." This of a man who is fluent in stock car history and drives a car with a NASCAR-logo license plate.

Even if people doubted the billionaire would really move, Padgett knew Smith could do it.

Oct. 5 to Oct. 11

A week or so after his threat, Smith called former speedway executive Doug Stafford.He develops hotels, including two near the track, and has served on Cabarrus tourism and Chamber of Commerce boards.

Smith asked him and another close friend -- John Kennedy, retired publisher of a Concord newspaper -- to be his liaisons with the city and county.

Stafford and Kennedy said they received no compensation for the work. Stafford described it as being a conduit and advising both sides.

Public officials welcomed Kennedy and Stafford into their brainstorming sessions, believing the two always had the community's interests at heart. County commissioners Chairman Bob Carruth said they offered insight into what Smith wanted and helped advance a deal.

But commissioner Coy Privette, a frequent foe of incentives, said anyone whom Smith appointed would have put Smith's interests first.

At that point, no one knew what it would take to persuade Smith to change his mind.

DeSales Wagster, who runs the county's tourism bureau, realized the crisis could devastate hotels and other tourist-dependent companies.

She hired Walker Marketing in Concord, where Karen Whichard whipped up a plan. In an e-mail, Whichard told Wagster that Smith "got slammed ... and his ego needs rubbing."

One idea was a letter-writing drive from schoolchildren. The bureau began an online "Save Our Speedway" campaign, delivering 11,000 postcards to Smith.

On Oct. 11, the City Council asked staffers to come up with tax incentives for Smith.

Oct. 17 to Nov. 1

In mid-October and early November, city leaders met with N.C. transportation officials in Concord and Raleigh, exploring how the state could help with incentives. They were told no money was available.

Meanwhile, the courting of Smith intensified. Wagster sent him a $260 fruit basket. She hired a plane to circle the speedway the next day towing a "We (hrt) You Bruton" banner. (The total cost for the tourism bureau's speedway campaign hit $39,000.)

On Oct. 24, Wagster delivered a DVD of local folks begging Smith to stay. The city and county got the state to change Speedway Boulevard's name to Bruton Smith Boulevard.

Residents ridiculed the overt courting.

"Your group sounds like the most pitiful suck-ups I have seen in a long time. ... Before it is over you will be giving (Smith) millions of dollars just to stay and he will still get his dragway," Marty Safrit e-mailed. "Pitiful."

Oct. 28 to Nov. 1

S.C. Lt. Gov. André Bauer cornered Smith at a race in Atlanta. South Carolina wanted Lowe's Motor Speedway, too.When Cabarrus leaders finally sat down with Smith Oct. 29, he told them to negotiate through Stafford and Kennedy. Officials saw that as a good sign because Smith chose prominent community members they liked and trusted. No one objected.

Some local officials had never met Smith, but they felt comfortable with Stafford and Kennedy.

"Bruton was calling the shots," said John Cox, head of the county Economic Development Corp.

After the meeting, Smith's staff told the city manager that Smith wanted help with major road improvements and drag strip noise abatement.

Rather than provide ideas for specific projects at this point, Stafford said, Smith wanted to get input from his engineers and also Stafford.

Nov. 5 to Nov. 14

In early November, Padgett, Carruth, Stafford, Kennedy and others met to discuss incentives.

They talked about extensive road upgrades and tax rebates. They even broached the politically volatile idea of raising property taxes to help pay for the deal.

The cost of the projects was roughly estimated at $75 million, County Manager John Day wrote in a memo. The city and county were hoping they could split costs evenly with the state.

By Nov. 9, estimates had been refined to around $60 million. But no one knew what Smith really wanted or how much it would cost.

Smith demanded a deal by Thanksgiving, two weeks away.

On Nov. 11, the public learned how much taxpayer money was at stake when the Observer ran a story about Day's memo on the $75 million estimate. That sounds like a lot of money, Smith remembered thinking.

Residents such as David Goodman teed off on the politicians, saying taxpayers shouldn't pay for the City Council's mess. Carruth wrote back: "We are in a very difficult situation, that yes, was not helped by the action taken by Concord."

Early Nov. 14, Padgett and Carruth, along with Day, Hiatt and state Sen. Fletcher Hartsell, R-Cabarrus, met in Raleigh with N.C. Commerce Secretary Jim Fain and two top advisers to Gov. Mike Easley, Dan Gerlach and Ruffin Poole.

They wanted the state to help keep the speedway. Padgett felt hopeful; Carruth saw it as a shot in the dark.

Gerlach and Poole explained they could not commit to anything beyond the one speedway-area project the state already had authorized: an extension of George W. Liles Parkway in 2013. They stressed that no more road money was available.

Fain knew he had no money to give them but listened and offered encouragement. "I nodded a lot," he said, chuckling.

Nov. 14 to Nov. 15

That afternoon, Carruth and Padgett met Smith at the track, along with other government leaders and Kennedy. Stafford joined by speakerphone.South Carolina still wanted the speedway, Smith reminded them. In an interview, he later said South Carolina was informally dangling $300 million in incentives, and he was scouting land there. (Lt. Gov. Bauer, S.C. commerce and tourism leaders, and York County economic development officials all said they never heard of a $300 million deal.)

The next day, Speedway Motorsports sent the city a list of projects important to Smith. It totaled an estimated $97 million; Stafford later said Smith would have been happy with less than the entire list.

Nov. 20

Two days before Thanksgiving, Hiatt and Day wrote an offer of $60 million for road, pedestrian, utility and noise abatement projects. Taxes and grants would pay for some, and the city and county would seek state money.

At last, Padgett believed, a deal appeared within his grasp.

Kennedy and Stafford delivered the letter at Town & Country Ford, Smith's Charlotte auto dealership, late that afternoon.

Smith said no. He had just one figure in mind -- $80 million -- though he didn't say so then.

Bruton, you're milking the cow dry, Kennedy said. Well, tomorrow's Wednesday, Smith replied. You still have time to do it, guys.

Carruth groaned when he heard. How can we go any further? he thought. Padgett hadn't slept well in weeks.

Smith had not told his negotiators how much he wanted. But after talking to Smith and seeing his wish list -- and based on a sense of what his friend of more than 20 years expected -- Stafford knew the price tag would have to be $80 million.

Then he thought of a solution: The city and county could simply promise another $20 million and try to get the state to commit to part or all of it in the next three years.

Nov. 21

The commissioners wouldn't agree to more money. But Padgett said he considered Stafford's plan a good compromise, and that council members had said they would go higher if they had to. "It's difficult to deal with a thousand-pound gorilla with all the cards," councilman Henry said.Stafford and Kennedy phoned commissioners, pushing the new deal. Most weren't willing to risk losing the speedway if promising $20 million more could sew it up. They weren't willing to find out whether Smith was bluffing.

City and county leaders figured they'd work out the details later. "So we changed the wording, from Tuesday to Wednesday, from $60 million up to $80 million," Hiatt said.

That afternoon, the governor called Smith, who asked whether Easley was still with him. The governor said yes.

Easley gave the same promise his aides had given Padgett and Carruth: Liles Parkway would get done. Easley said he told Smith no other money was available.

Smith later said Easley had assured him the state would provide $20 million in incentives, and that he and Easley remember the conversation differently.

Around 4 p.m., Kennedy and Stafford made a final pilgrimage to Town & Country. The plan offered $80 million for "financing, design and construction of road, pedestrian, utility and noise attenuation projects."

They really want the speedway, Smith recalled thinking.

He shook hands with Kennedy and Stafford, and called the mayor. Then Smith spoke the words Padgett desperately wanted to hear: We have an agreement.

`We're here forever'

On the Monday after Thanksgiving, Smith and Padgett officially announced the deal.

"We're here forever," a grinning Smith said. He spoke of how community support influenced him. He gave $1,000 each to 25 of the students who had written.

Padgett praised Smith's plans, predicting great things.

But earlier that day, in a response to another e-mail, Padgett wrote of Smith, "He would take advantage of any situation."

The drag strip will open in September.

In an interview, Padgett said the city addressed residents' concerns, advanced road projects that would benefit everyone and cemented Concord's place in motorsports. They were not simply handing Smith $80 million.

"We did what we had to do, given the circumstances we were under," Padgett said. "We all came out as winners."

Smith's eyes widened when told people called him a bully and believed he needed ego-stroking. "They don't know me," he said.

He also dismissed Padgett's comment that he would take advantage of any situation. The city started the fight, he maintained.

"I don't have any apologies," Smith said. "It's just business. That's all it is."