By PETER HUSSMANN
The Newton City Council lent unanimous support to a plan to expedite the payment of the property tax rebate due to the Iowa Speedway to assist the track operators in freeing up funds for some immediate obligations related to upcoming Speedway events.
The Speedway owners, the Clement family, had proposed to pay their first half property taxes now even though they are not due until September. In doing so, the track operators asked that the city expedite the rebate payment that is due as part of the redevelopment agreement so they can access the cash for the expenditures.
Their taxes are kept in a special escrow account which is required to be used only for property taxes and is not accessible for track operation use.
Under the plan, the Speedway will make its full first half property tax payment of $894,591 to the county now. In return, the city will provide a loan of $760,402 to the Iowa Speedway as the portion of the overall tax bill that is subject to rebate per the terms of the redevelopment agreement. The difference is because taxes paid for debt service and the school district's Physical Plant and Equipment Levy fund do not flow to the TIF district, about $2 of the overall tax levy.
Once the county verifies that the taxes have been paid, the city will provide the rebate money to the Speedway. The county will release the funds to the city when certified allocations are sent by the state this fall.
The agreement also calls for the Iowa Speedway to cover all costs to the city, including lost interest on the $760,402 payment, attorney fees and any other out-of-pocket expenses. The city will calculate those costs and deduct them from the payment amount.
The Iowa Speedway's current valuation of approximately $45 million creates a yearly tax bill of $1.78 million. Under the terms of the redevelopment agreement, the tax abatement period for the Speedway were fiscal years 2008-09, 2009-10 and 2010-11. The rebate period is for fiscal years 2011-12 and 2012-13. The full, unrebated tax obligation begins for the Speedway in fiscal year 2013-14.
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