Race City owner balks at $1M lease hike

CALGARY – Race City’s owner is confident he can reach a deal to keep the speedway alive, but not with the $1-million lease hike the city has proposed.

Council voted this fall to extend Race City’s lease to 2015 rather than ousting it next spring to make way for a landfill expansion. The city then began lease renegotiations with a letter suggesting the facility’s annual rent rise from $37,000 to $1,080,000.

The multi-track raceway takes in around $2 million in revenue a year, owner Art Mackenzie said.

He had launched legal action against the city in the summer when it appeared his track facility was clearly doomed. There’s a January hearing date looming on that application if he can’t reach agreeable terms, he said.

"I don’t mind the fact that the city is hard-bargaining. But what I do mind is if you look at all the different aspects of that letter, it seems like they’re doing everything they can to specifically not have me there," Mackenzie said.

Landlords don’t normally spike the rent anywhere near as sharply unless they have an agenda, he added.

However, he said he’s "cautiously optimistic" he’ll be able to work out something, pegging at 80 to 20 the odds that engines will be revving at the track as usual next spring.

The city’s corporate properties branch has a policy of keeping lease negotiation deals confidential. It declined to comment while the matter is before the court.

The city assesses the 64-hectare site at a $6.3-million, but Mackenzie said the city is basing its proposed lease on a $27-million assessment. According to the city’s leasing process detailed on its website, its valuation doesn’t necessarily coincide with the city assessors’ figures.

"All I know is that both sides should negotiate in good faith. I was assured that is happening," said Ald. Ric McIver, whose southeast ward is home to Race City.

He has championed the speedway, but had to apologize recently for going too far in his advocacy by saying he hoped it would win in court against the city if negotiations crumbled.

Race City is one of only a few motorsports facilities in North America that exist within city boundaries.

Meanwhile, it’s unclear what the city will do regarding the $3.1 million in stormwater management work it has said is necessary to plan the nearby Shepard landfill’s extension without being able to work with the speedway site.

At last month’s budget deliberations, council refused to find funds for that project. The work isn’t necessary until 2012.

"We are not in a position to speculate on next steps," city waste services director Dave Griffiths said in an e-mailed statement.

jmarkusoff@theherald.canwest.com