Another day, another folly

By 11:05 a.m. on Jan. 28, the final chapter on Paul Lyndaker's dream of owning a major NASCAR-sanctioned auto racing track in New Bremen may have been written. At 11 a.m. on that day, there will be a sheriff's sale of the Adirondack International Speedway and surrounding property to satisfy a judgment in favor of Empire State Development Corp. Mr. Lyndaker, if the track is sold, ultimately will have lost his dream to one of the many, many arms of government that he so diligently solicited for money to fund his folly.

The track's history is written in two volumes – one dedicated to racing, one to business. The volume on racing shows a series of modest successes, as Mr. Lyndaker was in fact able to attract NASCAR races – small ones, and not often, but still – to his venue. The business story, however, is much more complex and in many ways, offers cautionary tales to those who go begging for corporate welfare, and those who dole public money out to private enterprise.

Let's start with the final chapter, assuming Mr. Lyndaker doesn't miraculously come up with the more than $400,000 it will take to save his ownership. The track is being auctioned because Mr. Lyndaker sought and received a $300,000 ESD job creation grant in 2002. To retain that money, the track had to build employment to 33 positions in two years. By 2006, when ESD started demanding a refund of its grant because Mr. Lyndaker defaulted on its terms, the track had eight employees. That is, according to Times records, the same number it opened with when it ran its first race in 2001. Now, that $300,000 is long since spent, the track has essentially no employees because Mr. Lyndaker cancelled the 2010 racing season a couple of weeks ago, and the track will be sold.

This isn't the only government lien against the property, however. Lewis County holds a $342,725 security position in the track that must be called if the property ceases to be used as a tourism destination. That lien stems from a disastrous adventure in 2003 in which Lewis County legislators, save two, did everything but form themselves into pretzels to get a $500,000 infrastructure repayment grant into the hands of the track. The scheme they hatched was so convoluted that Bruce Krug, the West Leyden legislator who is no longer in office, said at the time "This is nothing more than a political version of money laundering."

And it turns out he was right; a comptroller's office audit in 2005 said the money shoveled into Mr. Lyndaker's pockets was in violation of the state Constitution and forced the county to recover the $120,000 or so that hadn't been spent, and $40,000 from Mr. Lyndaker that had.

It is indeed ironic that Mr. Lyndaker's pending loss of his dream came not from this feat of financial legerdemain, but from a prior legal and unheralded grant given out by a state agency that many have long considered out of control. The ESD grant was perfectly legal, if ill advised. Yet the subsequent illegal payment provided him with almost $350,000 that was never recovered by either the state or Lewis County.

And Mr. Lyndaker, for his part, acted as a spoiled child, pouting and taking his toys home when anyone had the temerity to criticize him. In 2003, for example, he cancelled racing until the media and the county Legislature stopped picking on him. The media shrugged, but the Legislature responded by passing, 8-2, a meaningless and fawning resolution in support of Mr. Lyndaker and his track. And he said a couple weeks ago that he was cancelling the 2010 season because of high taxes and (he implied) unreasonable state Department of Health mandates. How boorish.

Mr. Lyndaker also managed to funnel a total of $17,500 into the campaign accounts of Gov. George E. Pataki and Assemblyman Ray Meier. His political machinations were exposed by Times columnist John Golden at the height of the illegal grant controversy, and the column was met by a scathing letter from Mr. Lyndaker impugning the writing but not offering any corrections of fact. It was a protest damned by its lack of refutation.

The Adirondack International Speedway history should be read by every state and local official who wants to promote the unfettered giveaway of taxpayer money to almost any scheme that wanders through the door. According to one former Lewis County official, Mr. Lyndaker sought and received about $2 million in public money to pour into his dream. And he got it with a business plan that any bank commercial lending officer would look at and say "You want to do WHAT?"

Now, the track will sit idle unless someone comes along with almost half a million dollars to clean up the state lien. The track also has property tax problems that will have to be addressed before the title is clear, including $85,985.89 from the past two years on the main parcel that will have to be paid by February to avoid foreclosure by the county.

In effect, this enterprise has been a financial disaster since its inception. Without the infusions of public capital, it isn't likely the track would even have been built. But that money has not served to save the business, nor to enrich Lewis County. A deeply flawed study of sales tax impacts was done in 2002 that brashly claimed that a major race at the track provided the county with $50,000 in sales tax revenues. That would have required, at a 3 percent local sales tax rate, that 8,500 spectators would have had to spend $1,666,667 in Lewis County – or $195 per person. And that included Lewis County and other north country residents who attended the race, and more than likely did NOT spend an additional $195 per person to attend the event. (That the Lewis County Planning Department put its name behind that study stands as a monument to self-serving political expediency.)

In reality, pouring public money into this venture was no more reasonable than funding a major league ballpark in Constableville or an aerodrome for dirigibles in Watson. If you build it, they probably won't come. Or at least not enough of them to make it pay. As long as public economic development decisions can include pipe dreams like this one, taxpayers are not going to get the kind of return on their dollar that they deserve. It’s a waste of money, and there is no longer enough money around to waste.