The Princeton Speedway could be on its last lap after a half century of operation, or it could be run next season by someone leasing the facilities.
The fair board, formally the Mille Lacs County Agricultural Society, is in charge of the speedway. The board began discussing the future of the quarter-mile, oval clay track speedway two months ago because the track has lost money five of the last 10 years – including more than $57,000 the past two seasons.
The fair board discussion led to agreeing to consider three options – continuing to run the speedway through the hiring of a manager, leasing the speedway facilities to someone to run it as their own operation, or closing the speedway.
On Oct. 9, the fair board’s speedway committee met and recommended leasing the track and seeking lease proposals.
Michele McPherson, director of the county’s land services office and a member of the speedway committee the last two years, said the speedway was $38,126 in the red this past season. It was just over $19,646 in the red the year before that, and only made $314.33 in 2010.
A set of financial books are kept on the speedway operation, separate from the rest of the fair board’s operations, and both sets of books are audited separately.
The fair board has revenue from its annual county fair, from winter storage, leasing the fairgrounds for non fair events, and from some grant money for maintaining the grounds.
Why the loss?
“In my opinion, the theory should be that the (speedway’s) back pit gate should pay the driver’s winnings,” McPherson said when asked why the speedway has been losing money.
McPherson, who has been working on a spreadsheet of the speedway’s revenue and expenses the past 10 years, said this: When comparing the pit revenue versus the speedway paying the driver’s winnings, in only two of those years prior to 2012, “did we make money on the back gate, so we’re running negative.”
For example, the pit gate was $26,000 in the hole during the 2008-09 fiscal year.
“So we’re taking from the front gate to pay the back,” she said. “If you do the final analysis and started totaling the losses in the back gate, you can see the correlation on the front and when we ran a banquet (for racers and their families) we went in the hole (on that) each year (for nine years).”
McPherson said she realizes the annual banquet is about “warm fuzzies. But when a banquet runs about “six grand in the hole” (as it did in the 2005-06 year), the fair board has to look at “unreasonable expenses versus income,” McPherson said.
The deficit in the speedway operation is considered an “internal loan from the agricultural society,” with the understanding that the speedway is supposed to make good on that, McPherson said.
But what happens if the speedway can not come up with the money to pay back that loan?
“Therein lies the rub,” she answered.
McPherson said she is not blaming the speedway drivers or anyone for the speedway’s poor financial condition. But the fair board cannot continue on the course it has with the speedway, she said.
Right now, a decision has not been made regarding the track’s future.
“We need to test the market” on the lease option, McPherson said.
Comments from fair board chairman
“We have decided we no longer want to manage the race track,” said fair board chairman Frank Hartmann. “It’s not profitable to micromanage. In the last two years we lost money and the bills are still coming in.”
What the speedway needs is someone with marketing skills who can “really promote the track,” said Hartmann, who added it seems to him the “biggest thing is the attendance.”
Factors that Hartmann said are involved in the speedway’s declining revenue are the economic downturn in recent years and competition among race tracks.
Hartmann did not want to mention the race track at Ogilvie as one of the more recent competitors. But the fact does remain that the Ogilvie speedway opened in 2009, adding to the number of race tracks.
One problem Princeton Speedway had in 2011, was its eight rainouts, Hartmann noted. So the fair board couldn’t just say, after a season with so much rain, that it should make an immediate decision on the future of the track, Hartmann said. But year 2012 was a “probationary year” for the speedway, he said.
“You don’t want to lose money,” Hartmann continued. “It hurts the initial effort and you hire a manager. “Since I’ve been on the fair board (12 years) we have had four different managers.”
The lease proposals are due in the fair board office on Friday, Nov. 9. The fair board is on record that it would select a leasee by Dec. 1, 2012. McPherson did say that the fair board could reject any and all of the lease proposals.
Most of the parts of the lease are negotiable. Two items are non negotiable: the name Princeton Speedway has to remain and the races would have to continue being run on Friday evenings.
One thing that could change are the concessions.
Area 4-H clubs operate a food stand during the county fair and also sell food on race nights.
Under terms set by the fair board, a leasee could only use the 4-H food stand facilities if it first negotiates a mutually-agreeable lease with the University of Minnesota and 4-H Extension Service.
One option for selling food would be through the use of a food truck. The leasee would also have the option to have alcohol sales as long as the alcohol vendors are licensed and provide proof of insurance with the Agricultural Society named as an insured party.
If a track operator is identified, a lease agreement for the speedway would be for three years. Each lease year would run March 1-Nov. 1. Either party could give written notice 90 days in advance to terminate.
County Commissioner Jack Edmonds, who represents the city of Princeton, is on the speedway committee with McPherson. Edmonds is working with her on securing a lease proposal.
Because the fair board is going to try to sign a lease, it was not ready to look at closing the speedway, Edmonds said. The ideal candidate for leasing the speedway, Edmonds said, would be someone with experience in the racing business.
“Hopefully, we will get some interest,” he said.