There have been so many inquiries and questions as to the fate of Badlands Motor Speedway since our attempted auction last month that we felt it necessary to explain exactly what is going on in one statement. Please bear with us as this has been a process. Since the auction we have spent an exhausting amount of time with our legal advisors, accounting staff, realtors, interested parties, media, and of course race fans and race teams from everywhere.
We have finalized our plans and as always we wanted to bring it to you directly to avoid you having to sort through all the rumors and all the people who are spreading rumors based on no facts or knowledge of the situation.
We have been asked by most to "Do it soon so we can move past the drama". We could not agree more, thus we will be laying it all on the line here, letting you know our methodology, and standing by to hopefully make a quick an easy deal with a new owner as soon as possible so there is plenty of time for the new owners to plan, promote and sell a successful new race and concert season at our state of the art raceway and amphitheater in Brandon, South Dakota.
We are going to extend a deeply discounted, temporary purchase price of $6,299,999 which is explained below in The Math section. This deal would need to close by Monday, December 31st at Noon central time. This offer is truly for the first person or group to come up with the money. At this price we are not in a position to hold it for someone only to have them not be able to fund the deal.
The entire facility will be completely maintained and race ready until that time. We have had and will continue to have our crews keep the place in tip top shape until it finds a new owner. This deal is completely turn key and includes everything. We want to help any new owner as much as possible to succeed beyond expectations.
There is a specific reason for this price point and please allow us to explain the situation. From our accounting team and tax advisors, this comes down to simple math. We have spent approximately $15,750,000 on Badlands Motor Speedway from the original purchase of the track to the complete remodel, buildings, labor, infrastructure and fixed assets. By shutting down the entity completely, discontinuing operations, and returning the facility to what would equate to a wildlife sanctuary, we can realize a full loss of all of those dollars spent for tax purposes.
When land is developed and assets are created, they are normally depreciated over 5, 10, 15 and even 20 years. But, tax laws allow the business owner to take a full depreciation of ALL monies spent once the business is no longer a business and if the assets are no longer able to be put in use or viable.
At the tax bracket/rate of 40%, by permanent discontinuance we will be able to realize an actual cash amount of $6,300,000 this year. Again, there would be a full write-off and depreciation of $15,750,000 of which 40% is $6.3M. So we have priced the facility $1.00 less than that amount if someone would like to purchase it.
Since the recent auction, we have been securing quotes to completely remove and recycle all of the buildings, bleachers, race track, electrical, sewer system, lighting, and basically everything at the facility except the topside fence and one road thru the 74 acre property. The top-soil would all be re-distributed and re-seeded and there would truly be a pristine area accompanied by the split rock creek for the deer and the antelope to play.
If there is no interest by a group, individual, Minnehaha County, the City of Brandon, etc.. to purchase the property and turn key operation and be able to close by noon central time on Monday, December 31st, 2018 our intention is permanently discontinue operations for tax and write off purposes in the 2018 tax year.
Once the teardown would be complete, we will be turning the entire case over to our legal team to aggressively approach any and all legal remedies that may be available to us from the reckless action of Minnehaha County earlier this year which impeded us from selling the facility we invested over $15M into.
We had a major curve ball thrown at us in June of this year, just prior to when the auction was scheduled the first time. We were at the peak of interest from potential new owners and were still early enough in the season for the Speedway to operate for the remainder of the 2018 race season.
The county recklessly issued press releases and a letter to us to cease operation because they claimed that we had fallen out of our compliance under some sort of grandfathering ordinance. This was just days before a practice race was scheduled to work in the track and to test out the various facility infrastructures. It was also just days before a posted auction was scheduled at the Speedway. Well, this blew up into a media frenzy and with the help of our legal team, the county finally retracted the letter and everything was back to normal.
But obviously it wasn't, as buyer after buyer and so many of the interested parties were now nervous that the county may come in and "shut them down" after they buy the track. We know this is not the fact, but with all of the news from literally every media outlet in the area reporting heavily on this "Bombshell News", it cast a deep shadow of suspicion on the sale.
We invite any potential buyers to contact our legal team of Chris Healy or Mark Meierhenry at Meierhenry Sargent LLP in Sioux Falls, SD, 605-336-3075. You can also contact Scott Anderson or his office at the Minnehaha County department of Zoning and Planning as he was the person who both wrote the letter and then retracted the letter. Although their actions have caused great damage to selling the property when we could have, we are confident from all sides that this was a mistake and will not be a problem for us or any future property owner.
We all truly hope we can pass the torch on to a new ownership group as soon as possible. We know there is a substantial amount of interest from several groups out there. We have put forth an incredible price and value for this historic piece of property and legendary race track and concert venue. We know time is of the essence as the off-season is the best time for the business to generate income by selling advertising, sponsorships, VIP Luxury Suites, Reserved Seating and much more to get ready for the gates to open to the thousands of race fans who have entered our gates over the past 60 years.
2012 S Splitrock Blvd
Brandon, SD 57005