2004-10-11

Army Corps won't rule out bond for racetrack

FOCUS to feds: help us, state legislation took away local control

Nate Giarnese

TAMWORTH — U.S. Army Corps of Engineers is no longer ruling out a bond as a condition of a wetlands permit for Club Motorsports Inc. to build a 251-acre motorsports country club at Mount Whittier.

The Army Corps had stated last month that it would not impose a bond, because bonding is left to local boards. But at a public hearing on Wednesday, the citizens group, FOCUS:Tamworth, asked the federal agency to require a $10 million bond against environmental fallout in the event the project is abandoned because state legislation has taken away the town's authority to impose a bond. Army Corps officials said they would consider the group's request.

On Sept. 30, Army Corps attorney Michael Hicks had told the Sun, "We're not going to require a bond. We're not in the business of bonding construction projects."

During a break in the three-hour hearing at the Brett School on Oct. 6, Frank Delgiudice, chief of the Army Corps Regulatory Division, said the bonding request would be given the same consideration as any of the 58 testimonials pertaining to the proposed 3-mile, $28 million Tamworth project. "That's what public hearings are all about," he said. "To add to to the record what the concerns are."

"We grant no weight publicly to anything that was said here," the division chief said. "There are no foreseeable conclusions to this project... including the bond."

Amending his earlier statement, Hicks said Wednesday, "It is part of the public record and will be considered as part of the conversation this evening,"

According to Hicks, his office has no history of adding a bond clause to a permit. Usually, he said, local boards will take up any bonding issues. "I asked around and I couldn't find anybody that had heard of us ever requiring bonding a project. Requiring bonding is an issue for local people to deal with local permits," he said earlier.

Attorneys for FOCUS: Tamworth, argued Wednesday that the town had tried to take local control last year by passing a racetrack ordinance. The ordinance, attorney Sherry Young said, were undercut by state legislation pushed exempting Club Motorsports from local control, and that the federal agency has the power to re-enact the people's will.

In a letter presented to Hicks, Young wrote, "The USACE has indicated that it assumes appropriate bonding requirements for this project will be imposed by local authorities. USACE regulations state that when the USACE is evaluating whether special conditions are needed to satisfy legal requirements and the public interest, the USACE can, where appropriate, take into account the existence of controls imposed under other federal, state and local programs that would achieve the requirement."

The letter continues, "However, there are no local controls that can adequately protect the public interest. The town's race track ordinance imposed local controls, including a bond provision and noise restrictions, but the applicant has obtained a legislative exemption from the ordinance (SB-458, now N.H. RSA 287-G)."

"Federal regulations provide that the Corps 'will add special conditions' to satisfy the public interest requirement," Young submitted in additional written testimony. "If the Corps has reason to consider that the permittee might be prevented from completing the work necessary to protect the public interest, it may require the applicant to post a bond of sufficient amount to indemnify the government against any loss as a result of corrective action it might take."

Willie Farnum, FOCUS steering committee member and Democratic challenger to State, Sen. Joseph Kenney, backed up Young's statements. In written testimony submitted to Hicks, under the sub-heading "Army Corps and DES position is ill-founded and irresponsible," Farnum wrote, "Both DES and the Army Corps have said that they feel no need to require a bond because the local permitting process will cover that. In most cases that would be true. In this case, it is not. CMI avoided all local control thus far by choosing a town with no zoning, making an end run around the town's efforts to regulate this project, and refusing to obtain a special use permit. The Army Corps and DES may be the only regulatory authority with the power and the opportunity to impose a bond. Given the enormous potential for significant damage and government expense if this project is abandoned, the only responsible action for the Army Corps and DES to take is to require a performance bond in a significant amount."

"The Army Corps and DES need to carefully consider the impacts of the project. Because we can't," Farnum pleaded Wednesday. "We ask you to do for us what we can no longer do for ourselves."

Alex Moot and Stephen Gaal, venture capitalists and FOCUS members, testified earlier in the hearing that CMI's finances and experience would prove inadequate to complete the project. If construction were abandoned mid-way though, they and many others fear the town would be left alone to absorb the environmental clean-up bill. "This is a tiny start-up company, thinly-financed and highly mortgaged. Mr. Condodemetraky and his management team have no prior experience in building or operating similar businesses. I am concerned that they will start to build it, run out of money, and leave us with the problem of stabilizing the site," Gaal said.

Engineers from Haley and Aldrich, a firm retained by FOCUS, estimated that the track would cost $50 million to build, $22 million more than quoted by developers. The cost of stabilizing the site if the project were abandoned would go to taxpayers to the tune of $11 million, Haley and Aldrich engineer Jim Bartlett said.

Developers maintain they will complete the park's construction on the side of Mount Whittier at any cost, while standing by their original estimate of $28 million. "Both myself and the investor group involved has the financial where-with-all to build 50 of these facilities," Condodemetraky boasted at the onset of the hearing. Two days after, company spokesman Scott Tranchemontagne said Condodemetraky was using the 50-facility figure to illustrate CMI's financial security and may not have meant it literally.

"Our position is that we will stimulate the economy," Tranchemontagne said. "We are going to bring in a couple of thousand new visitors per year to the area. Visitors who have the resources to spend a lot of money while visiting."

"A lot of people were talking about a bond. The Army Corps said they weren't going to issue one," Tranchemontagne said Friday. "I didn't hear anything new. It was more of the same allegations," he added. "A lot of people gave opinions without any facts."

CMI attorney Susan Duprey joined that testimony by project opponents was only "allegations not borne out by science."

Hicks said on Sept. 30, that while the federal agency focuses on environmental impacts, it did make note of financial factors. "We are involved in environmental evaluation, not financial evaluation," Hicks said. "I know people up there are concerned about this guy," he said, referring to CMI President and CEO Stephen Condodemetraky. "We legally can't take sides, but we didn't go in with blinders on."

"So far as we know, he has the financial means to do the project. He invested a lot of money in legal fees," Hicks said. "We interpret him as a serious developer."

The federal permit review will consider affects of the proposed Valley Motorsports Park and road course on noise level, public safety, wildlife and the Ossipee aquifer which runs from Bartlett to Saco, Maine. According to the Army Corps the impacts must be minimal. N.H. Department of Environmental Security has already issued a wetlands dredge and fill permit, stating that Valley Motorsports Park will impact less than three-quarters of an acre of wetlands and will not significantly impair wetlands, surface waters, and groundwater resources; and a site specific “alteration of terrain” permit.

U.S. Army Corps of Engineers will accept written comments for the public record until October 16 at 5 p.m. Written statements should reference File #NAE-200302257 and should be forwarded to the U.S. Army Corps of Engineers, New England District, Regulatory Division (ATTN: Michael Hicks), 696 Virginia Road, Concord, MA 01742-275, (978) 318-8157.