Bank pays off speedway taxes

Daily Journal file photo More than $250 million in back taxes on Rockingham Speedway were paid by Farmers and Merchants Bank between August and December of last year.

ROCKINGHAM — Farmers and Merchants Bank shelled out more than a quarter-million dollars within six months, paying four years worth of taxes and interest on Rockingham Speedway, according to county tax records.

The 244.24 acre property, valued at $6.85 million, has an annual tax bill of roughly $56,000.

According to a verified complaint filed Aug. 24, 2014, the bank was “being irreparably harmed because it had been unable to protect its collateral…ensure proper management of the property and ensure the prompt payment of the property’s operating expenses,” including the ad valorem taxes.

The complaint states that the bank had already “negotiated a payment plan with Richmond County to cure the past-due ad valorem taxes and has begun making payments pursuant to the plan.”

Tax records show a payment of $68,378.54 — which included $12,666.54 in interest — was made Aug. 15, 2014 and another payment of $421 was made four days later, closing out the 2011 tax liability.

The speedway’s 2012 taxes — $56,151 plus $9,546 in interest and a $7 lien cost — were paid on Sept. 12, 2014.

A consent order, signed Oct. 8, 2014 by Superior Court Judge W. David Lee, directed Rockingham Raceway Park, LLC to obtain an agreement with the county to prevent the government from pursuing its collection remedies until March 31 of this year, the appointment of a receiver for the property or the sale or other disposition of the property “that fails to result in all such taxes being paid,” whichever was first.

The defendant would not be considered in violation of the order if all 2013 taxes and interest were paid by Oct. 24, 2014 and the 2014 bill was paid by Dec. 15, 2014.

According to county tax records, the 2013 bill — $61,071.43 — was paid Oct. 31, which included $4,913.43 in interest and a $7 lien cost. Another payment, of $56,151, was made Dec. 19 to cover the 2014 taxes. No interest was charged for the final year.

Because of the back taxes, the county filed an application for partial disbursement on Nov. 14, 2014 to collect on a compensation payment from the N.C. Department of Transportation for a highway widening project on U.S. 1.

The state deposited $156,750 with the Richmond County Clerk of Superior Court in October as “just compensation” for the taking of land for a temporary construction easement and permanent drainage and utility easements.

The county argued it was entitled to the funds because the property owner “has continued to fail and refuse to pay the outstanding taxes,” citing a state statute saying ad valorem taxes “shall be superior to all other liens, assessments, charges rights and claims of any and every kind.”

However, county attorney Stephan R. Futrell, in a Dec. 29, 2014 letter to Senior Resident Superior Court Judge Tanya Wallace, withdrew the county’s motion, 10 days after all taxes had been paid.

In late January, F&M Bank attorney David M. Schilli filed an application for disbursement of funds arguing the bank was entitled because it was “the owner and holder of two commercial loans” exceeding $4.8 million, not including attorneys’ fees and other collection costs.

On April 20, Superior Court Judge Richard T. Brown granted the bank’s motion, with the funds to be released within 14 days.

A March 15 deadline for the sale or auction of the speedway — to avoid foreclosure by the bank — by owners Andy Hillenburg and Bill Silas came and went with no announcements or court filings.

Attempts to contact the parties involved both before and after the deadline were unsuccessful.

Craig Northacker, executive director of Vets-Help, announced plans to purchase the speedway and turn into a reintegration center for veterans and launch a racing circuit.

Earlier this month, Northacker blasted the bank’s attorney in a letter to the judge, accusing Schilli of holding up his group’s attempt to purchase the track property.

Reach reporter William R. Toler at 910-817-2675 and follow him on Twitter @William_r_Toler.