Originally Published: April 27, 2015 6:01 a.m.
Racecar fans who hoped the Prescott Valley Speedway might be able to open for the season in spite of the owner's new bankruptcy can forget the idea.
"There's too much exposure," U.S. Bankruptcy Trustee William Pierce said Friday after a bankruptcy creditors meeting in Prescott, referring to the liability faced by him as well as the major creditor at the track, the U.S. Department of Agriculture.
Prescott Valley Race Course LLC is the owner of the car track as well as the neighboring horse track that has been shuttered since the previous owner went bankrupt before the 2011 summer racing season. Gary Miller is the owner of PV Race Course.
It could be years before the car and horse track reopen, if ever. It took two years to work through the last bankruptcy case. The previous trustee didn't allow any uses on the property during the previous bankruptcy either.
Miller bought the facilities in bankruptcy court in February 2013 for $5.5 million, by taking on $5.5 million of the existing loan on the track from the U.S. Department of Agriculture's Rural Development arm. The federal government at the time held a $14.7 million loan on the facilities, mostly for its construction in 1999-2001 when the Yavapai County Fair Association decided to leave its long-standing smaller track in Prescott where horse racing had been a staple for nearly a century.
Horse racing has a long and storied history in this area. County fair racing started in Prescott in 1913. The summer racing meet started in Prescott in 1960, moving to a new $23 million Prescott Valley facility in 2001. The dirt car track first opened in 2004, and Miller had reopened it the last few years.
Miller estimated in his bankruptcy filing that the tracks, horse track grandstands, barns and approximately 125 acres on the northeast fringe of Prescott Valley is now worth only $2.5 million.
"It was just a guess," he said when the USDA attorney Paul Bullis asked him at the creditors meeting whether he conducted an appraisal.
Miller and Nancy Veres, community programs director for USDA Rural Development in Arizona, didn't respond to The Daily Courier's questions after Friday's meeting about how Miller was able to convince the previous bankruptcy Trustee Brian Mullen and the USDA two years ago that he had the money to restore and reopen the horse track and grandstands.
"I was always very serious and I'm very sad it didn't happen," Miller said. He declined to comment further, upon the advice of his attorney.
"The debt service (on the loan) was too high to be able to survive," he told The Daily Courier last month shortly after filing for bankruptcy. "The property couldn't be refinanced." He said he had been trying to find a buyer.
Veres said she wasn't here when the USDA extended its loan to Miller, so she doesn't know details about what the USDA required of him.
"We won't be extending the loan again to a third group," Veres added.
That means that taxpayers will likely be stuck with millions in losses, and the track is less likely to reopen without the extra incentive of a low-interest government loan. The federal government will get most of the proceeds of any sale of the property, but the sale is highly unlikely to reach the $6 million that Miller owes the USDA. Miller listed $187,000 worth of unpaid local property taxes among his bankruptcy liabilities, too.
Trustee Pierce has extended an offer to the federal government to maintain the facilities during the bankruptcy proceedings and market the property for sale. The USDA would cover the costs. He said the USDA asked him for a proposal. Miller never did replace the leaky roof on the 93,000-square-foot horse track grandstands, Pierce said.
Brian Hussey, who helped build the PV Speedway, said he knows people who are interested in buying the speedway and he hopes it can be sold separately from the horse track.
"There are hundreds of thousands of dollars invested in the car track," he told Pierce after Friday's meeting. "I have some investors who would like to try and buy it." The track regularly attracted 800 to 1,000 spectators on weekends, he said.
If anyone can find a buyer for the horse track, Pierce might be the man because of his history with local horseracing. He had to recuse himself from overseeing the previous bankruptcy filed by the Yavapai County Farm & Agriculture Association, an offshoot of the Yavapai County Fair Association, because he was too familiar with the local players. Miller, on the other hand, is a former president of the Arizona Horseman's Benevolent & Protective Association from the Phoenix metro area.
Pierce said he moved to the Prescott area in 1960 and was president of the Yavapai County Fair Association during the 1970s when it still ran Prescott Downs as well as the Prescott Frontier Days rodeo. The rodeo stayed at the historic site in Prescott and now operates under a separate group.
The county fair moved to PV with the horse track and took place at the county government-owned events center next to the PV horse track, but since the horse track closed it has taken place at Tim's Toyota Center in Prescott Valley. Fair organizers now are negotiating to return to their old stomping grounds in Prescott.
Miller had been leasing the county's events center for other uses, but now it too will be closed.
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