NASCAR & Auto Racing

Would a new speedway pay off for Bruton Smith, SMI?

Lowe's Motor Speedway holds a lot of people and has a lot of history. It also is older than most other NASCAR tracks and offers fewer luxury suites than some.

Bruton Smith's bombshell that there's a 90 percent chance he'll close the Concord speedway may be just the latest rhetoric in a dispute with city officials over a proposed drag strip.

But a closer look at where Lowe's sits in the NASCAR pantheon and various dollar figures -- some from Smith, others from tax records -- suggest that Smith may consider a new speedway, even with a high construction cost, to be a sound economic decision.

Replacing a speedway in a major market is extremely rare, and Smith has said a new track would cost about $350 million -- $100 million more than it cost to build Texas Motor Speedway north of Fort Worth a decade ago.

Smith also has said Lowe's needs $200 million in improvements to remain a top NASCAR track, putting the difference between an upgraded Lowe's and a new speedway at $150 million.

The gap would shrink even more if Smith gets a good price for the speedway property, which could sell for more than $50 million, one area commercial real estate broker said.

Smith hasn't disclosed specifics about Lowe's improvements and declined comment to the Observer on Tuesday. But speedway spokesman Jerry Gappens said the venue has to compete not only with other NASCAR tracks but with Charlotte's pro basketball arena and pro football stadium, which offer newer luxury suites.

As Gappens explained, "We're in the same marketplace with some really nice sports facilities and venues with which we need to keep pace."

Since 1960

Opened in 1960, Lowe's -- then called Charlotte Motor Speedway -- is older than all but a half-dozen tracks on the Nextel Cup circuit. Most of those old speedways are in smaller markets, such as Darlington, S.C., and Martinsville, Va.In Concord, the speedway has been expanded and updated several times since the '60s and now seats more than 160,000. Speedway Motorsports also has added luxury suites, but Lowe's still has fewer than Tennessee's Bristol Motor Speedway -- which is the same age as Lowe's -- and the newer Texas Motor Speedway.

A new speedway likely would mean more suites, and Smith said it could be built on as little as 500 acres. That may be difficult, though, since Bristol -- a half-mile oval vs. the 1.5-mile oval at Lowe's -- is on 674 acres. Texas Motor Speedway is on almost 1,500 acres.

Land costs for a new track may not be a factor. Competition among other cities and counties for a track could include offers of free land, tax breaks or both.

Smith has said his team is considering about 20 sites that would be the same distance or shorter than Lowe's from Charlotte/Douglas International Airport -- about 20 miles.

Valuable property

At the same time, Smith could get a boost from selling the old speedway site, which would command a price of at least eight figures and possibly nine, said Rob Pressley, president of Coldwell Banker Commercial MECA in Charlotte.

Large sites with one owner are rare, Pressley said. The two largest parcels at Lowe's include more than 1,100 acres. The track is close to major highways, Charlotte, Concord and Kannapolis.

Although it would need Concord's approval, a redeveloped Lowe's site could have a combination of homes, offices, and shops, said Pressley, who also is a principal in Firmitas, which develops such projects. Examples include Ballantyne in southern Mecklenburg and Baxter Village in York County, S.C., he said.

The total assessed value of Lowe's, which includes several parcels, is almost $171 million, but the land value is about $46 million, according to Cabarrus County tax records.

If the buildings are removed from the site, Pressley said, it could sell for that much, which would be about $40,000 an acre. Pressley also said he wouldn't be surprised if it sold for $50,000 or even $100,000 an acre, or more than $100 million.

While that would help offset the cost of building a new speedway, any new construction ultimately depends on how serious Smith is about moving.

Right now, Gappens said, plans for Lowe's include removing some grandstand seats that have been in place since the speedway opened in 1960 and replacing them with wider seats. Because Lowe's has Nextel Cup races in both May and October, however, that work must be done in phases, he said.

Between those time restrictions, the age of Lowe's and the dispute with Concord officials, Gappens said, Smith might think "maybe I'm better off to start from ground zero and build another one."

PROS AND CONS AT THE TRACK

Smith's Speedways

Bruton Smith's Speedway Motorsports owns six tracks that host Nextel Cup races. Although Lowe's Motor Speedway has the largest capacity, other speedways have more luxury suites.



SPEEDWAY LOCATION ACRES OVAL (IN MILES) LUXURY SUITES SEATS
Atlanta Hampton, Ga. 815 1.5 123 101,000
Bristol Bristol, Tenn. 674 0.5 196 158,000
Infineon* Sonoma, Calif. 1,597 2.5 27 47,000
Las Vegas Las Vegas 1,028 1.5 102 140,000
Lowe's Concord 1,301 1.5 113 162,000
Texas Motor Speedway Fort Worth, Texas 1,490 1.5 194 158,000


* Road course; seating doesn't include temporary seats

Source: Speedway Motorsports documents filed with the U.S. Securities and Exchange Commission. Turn 4 at the Coca-Cola 600 at Lowe's Motor Speedway.

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