County settles raceway suits, resolving contractors’ claims

The Spokane County Raceway will cost taxpayers $850,000 more under a lawsuit settlement county commissioners approved Tuesday.

Commissioners Mark Richard and Bonnie Mager, who don’t agree on much about the raceway, both said the settlement makes the best of a bad situation.

Mager opposed the decision of Richard and Commissioner Todd Mielke to buy the 314.7-acre raceway for $4.3 million in an April 2008 bankruptcy auction.

The goal was to preserve an economy-stimulating entertainment venue, but county costs continued to mount and a 10-year contract with a new raceway operator guarantees only $73,346 a year in income.

Commissioners on Tuesday unanimously approved a $1,072,473 settlement of two lawsuits by seven contractors who weren’t paid for work at the raceway.

Insurance will cover only $222,473.

That’s the balance of the settlement after the county pays a $500,000 deductible and $350,000 to offset the value of improvements that benefit the raceway – whether county officials wanted them or not.

However, the county hopes to recover the entire settlement from the former raceway operator, Bucky Austin, who ran up about $1 million in debt for unauthorized work.

Austin spent his own money for $435,938 worth of other improvements, but commissioners say he’ll get no credit for that.

Austin was not immediately available for comment.

Richard said the settlement posed a “philosophical challenge” for him because he thought the contractors should have sued only Austin because their contracts were with him. But he also didn’t want to leave the companies “hanging out there” in the current economy.

The county will take over the contractors’ Superior Court lawsuits and go after Austin. A trial is scheduled in May.

The contractors claimed more than $1.1 million in unpaid bills, but the county refused to honor a Wm. Winkler Co. claim for a $200,000 personal note the company accepted from Austin.

Interest and legal fees brought the total back above $1 million, and county risk manager Steve Bartel urged commissioners to act before the costs go higher.

The county’s portion of the settlement will come from money set aside for insurance claims, and won’t affect general fund operations.

Commissioners approved various safety and handicap-access projects this year, including $588,500 to realign the road course.

County officials sold $7.1 million worth of bonds last month to cover all the raceway costs.

The 20-year bonds will reimburse the county general fund and be repaid with undesignated real estate and rental car tax receipts.

Meanwhile, a deal to give Airway Heights 45 acres of undeveloped raceway land for a regional sports park in exchange for sewer and water connections at the raceway showed signs of unraveling.

The utility connections are needed to keep the state Department of Ecology from limiting the raceway to bottled water and portable toilets.

The tentative agreement calls for the city to give the county half of its admissions tax money to pay for city-approved projects at the raceway.

Mager said City Manager Albert Tripp had last-minute qualms about lack of a sunset clause, and she agreed to recommend a 30-year sunset.

Mielke said raceway maintenance costs “won’t magically go away” in 30 years.

He and Richard believed they had an understanding with Airway Heights elected officials, and they weren’t willing to back down.

Richard said the tax eventually is expected to bring the county $30,000 to $60,000 a year.

Richard will try to patch up the agreement in a meeting later Tuesday with the Airway Heights City Council budget committee.