The Yavapai County Fair Association and Yavapai County Farm & Agriculture Association have closed a $13.6 million loan deal with the U.S. Department of Agriculture that should go a long way toward keeping the Yavapai Downs horseracing track open.
The deal includes a lower interest rate of 4.375 percent on a $10.7 million loan that will save the track about $350,000 in interest annually - and save the track itself, the track's General Manager Gary Spiker said. The previous rate was a variable 7.5 percent with the National Bank of Arizona.
"It really helps us out," Spiker said of the loan. "The USDA (U.S. Department of Agriculture) has just been great to work with."
He estimated about 1,000 jobs depend on the racetrack.
"You don't see many deals like that, with such huge job creations," said Gary Mack, business and cooperative program manager for USDA Rural Development in Arizona. He has been working directly with the Fair Association (YCFA) and Farm & Ag Association on the loan issue.
"Now the work starts," Spiker said. That means lots of paperwork to transfer ownership of the track to the new group, along with related transfers such as insurance and a lease with the Yavapai County government to run the neighboring events center.
The new Farm & Ag group formed because the USDA rules don't allow it to refinance a loan it already has guaranteed, and it had guaranteed the National Bank of Arizona loan. The USDA also transferred its existing $2.9 million direct loan to the new group, which will keep the 5 percent interest rate.
The loans are what remains of loans the YCFA took out to build its $22 million racetrack and associated facilities along Highway 89A in Prescott Valley that opened back in 2001.
The YCFA will continue to run the county fair at the events center, and advise the Farm & Ag Association on track matters, Spiker said.
The groups closed the deal this week, but the Farm & Ag Association won't start operating the racetrack until it gets licensing approval from the Arizona Department of Racing. That process could take months or more than a year.
But the Farm & Ag Association won't have to wait that long to start writing checks to patient vendors, some of which have been waiting a year to get paid for services, according to Fair Association Controller Sharon Fischer. She hopes to have accounts set up early next week so checks can go out.
The USDA allowed the YCFA to stop making loan payments in January, and it won't have to restart those payments until November 2010, Fischer said. Thereafter, its payments will take place in the fall after the track season ends, instead of the previous monthly payments.
"One thing that's nice about our programs is our regulations give us a lot of ability to structure payments based on cash flow and needs," Mack said.
The USDA also added about a $1 million cash cushion into the loan, Fischer noted.
"What's nice about that is everybody gets paid and it allows the Farm & Ag Association to have capital to benefit the community and bring in events," Fischer said.
Already, the events center has conducted events every weekend since the track closed for the season on Labor Day weekend, Spiker said. This weekend it has "Rage in the Cage" fights. The center seats 2,000 people.
The groups also have set up horse camps and dog events, and are working on non-horse races such as flat track motorcycle races, he said.
"Events like that could bring quite a few dollars into the community," he said.
Posted: Monday, November 09, 2009
Article comment by:
how long will the loan money last this time?
I suppose everybody out there just got a raise.
Posted: Saturday, November 07, 2009
Article comment by:
Louis
Does the USDA do any investigation BEFORE they throw good taxpayer money after bad? Glad to see the Cage Fighting is out there with the animals. Maybe we should dub the place White Trash Capital of Arizona
well if Spiker does anything like he did in ash fork things will be messed up in no time.... he couldnt be a good superintendent and hired a person that cant do the job either... do you really think this loan is for a good cause.. yeah if its in the pocket of gary and his wife....
Posted: Saturday, November 07, 2009
Article comment by:
Gracie
USDA Money to promote "Rage In The Cage" what a country!
Posted: Saturday, November 07, 2009
Article comment by:
What a WASTE!!!
Seriously- does anybody really care about the racetrack besides Spiker and the other people that rely on it for a job? I for one think any money loaned to this place is a WASTE. Let the Fains support this eyesore- they built it!
Posted: Saturday, November 07, 2009
Article comment by:
Are you kidding?
This may be on of the goofiest uses of taxpayer money that I have seen in some time. Here we are in a serious economic crisis and we’re bailing out a racetrack? Horse racing is probably in trouble because not enough people patronize the tracks. Is that the taxpayer’s problem? I don’t think so. People will say that it's just a loan and the feds will get the money back. If the racetrack sold bonds to solve their problems, would you buy them?
