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St. Louis Post-Dispatch, July 29, 2010 article [website]

 

 

Gateway track's owner takes $7.96 million writedown

BY DAVID NICKLAUS dnicklaus@post-dispatch.com > 314-340-8213 | Posted: Thursday, July 29, 2010 11:52 am

In a Page One story today, my colleague Kathleen Nelson reports that the absence of Nascar events next year leaves the future of Gateway International Raceway in doubt.  Here's a clue to how much the track's fortunes have declined: In its earnings report this morning, parent company Dover Motorsports announced that it's writing down the value of Gateway by $7.96 million. Here's the exact wording:

The Company concluded in the second quarter that it was necessary to review the carrying value of the long-lived assets of its Gateway facility for impairment. As a result of this review, the Company recorded a non-cash impairment charge of $7,964,000 to write down the carrying value of the Gateway facility to fair value. The Company's wholly-owned subsidiary, Gateway International Raceway, has notified NASCAR that it will not seek 2011 sanctions for its two Nationwide Series and one Camping World Truck Series races. The Company is currently evaluating all options for the facility.

The company doesn't say what value it now places on Gateway, but Post-Dispatch reports in 1997 called it a $25 million development. the Southwestern Illinois Development Authority issued $21.5 million in revenue bonds to finance the track's construction.

UPDATE: Dover's annual report, filed earlier this year, provides some interesting background on the track's finances. Dover also wrote off $7.5 million of Gateway's value in the fourth quarter of 2008, so its accountants now say the property is worth $15.5 million less than it was two years ago.

Also, the track owed a bit less than $3 million on the SWIDA bonds as of Dec. 31, but it also had a debt-service reserve of $5.3 million, which is more than enough to meet its principle and interest obligations. SWIDA holds a first lien on the track's real estate.

 

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