Closure Update:
We would like to provide some more complete information to help everyone understand the suspension of operation at the raceway. We read the official statement from Wade Horton and the County of San Luis Obispo with dismay as it conveniently omitted a significant portion of the timeline of events and key facts. Mr. Horton stated that “After meeting with the County, the owner applied for and received a Temporary Commercial Outdoor Entertainment License (aka 6.56 license) in November of 2020”, which is true, but ignores a series of events prior to 2020.
The omissions include the due diligence with the County prior to the purchase of the property, and the on-site meeting that took place with County officials, including 4th District Supervisor Lynn Compton, in October of 2018. The purpose of this on-site meeting was to get guidance from the County on the improvements that would be allowed as not to jeopardize our existing use permit that allows numerous types of events (including concerts). We were given instructions from the County officials on which improvements would be allowed (new grandstands, remodeled bathrooms, improved catch-fencing, new landscaping) and not allowed (covered garage ports in the pits, new back stretch grandstands, or any new permanent structures) to preserve the land use permits that allows almost unlimited kinds of events without the need for additional permits. The County officials who were on site, including the heads or several County agencies, agreed that we were allowed to host an array of events, including live music events as stand-alone events. Again, this was October of 2018.
After getting the confirmation from the County of the existing land use permit that allows an array of events, we proceeded with spending approximately $750,000 over and above the purchase of the property on the needed improvements. This was the largest investment in the property since the track was originally built. We also entered into an agreement with an outside promoter to provide us acts for future live music and rodeo events covering 2019-2021. We would not make this investment or entered into this agreement without the confirmation and support of the County of San Luis Obispo. Lynn Compton was also very supportive of our efforts and fully understood our business plan that relied on the revenue from non-racing events to keep the facility viable, and to ensure the successful continuation of running racing and motorsports events well into the future.
The improvements were made and were ready for the 2019 season. The successful 2019 season of events was a mix of racing, monster trucks, motorcycle shows, and live music with racing having the most scheduled dates. The diversity of events allowed the venue to be exposed and utilized by more of the community and 2019 was a profitable season. The season proved the business plan was viable to keep the place open to all who enjoy the facility well into the future. The reviews and comments regarding the improvements from attendees and participants were overwhelmingly positive. We even gained the attention of the World of Outlaws, who wanted to return to the raceway after over a 20-year absence. We gained the attention of national concert promoters like Live Nation, and Neste Live, who came and toured the facility with the intention of bringing in quality music acts, from county music to rock and roll.
We received no County notices of any violations for any of the concert/rodeos held in 2019. In fact, at the end of the 2019 season Lynn Compton spoke to some of the residents of Costa Pacifica Estates at a meeting of the South County Advisory Board on November 25, 2019, in which she addressed the tracks permit and right to hold live music events. She stated that the raceway had a perfectly legitimate right to hold these events based on the original permit issued in the 60’s. She stated to the SCA Board that while the permit was old it allows for races, concerts, festivals, and all kinds of other events. She also stated that the County can’t legally change the specifics of the license or force the raceway to get another one. She was quoted as saying that the raceway, “whether you like it or not, is operating under his permit”. This meeting was reported in an article of the SLO New Times by reporter Kasey Bubnash published on December 5, 2019.
Compton’s statements to the South County Advisory Board and the residents in 2019 were consistent with the guidance provided by her and numerous County officials back in October of 2018. This was prior to the remodel and the signing of the contractual agreement with the live music promoter. Her statement was also consistent with the information we received from the County prior to the purchase of the property in 2018.
But only two months after the statements from Compton at that SCA Board meeting we received a letter from Matt Jansson, at the time the division manager of Code Enforcement for SLO County Planning & Building, dated February 7th, 2020. This acknowledged the meeting with County officials in October of 2018. Much to our surprise, he stated that if the staff indicated that we could hold these events that the statement “was not technically correct”. In essence, sorry we made a mistake. Again, this after operating for a full year under their previous guidance. Mr. Jansson, who has since resigned his position at the County, then suggested that the only way to continue with the events was to either apply for a change in our Conditional Use Permit, a long and difficult process, or to apply for a 6.56 Temporary Entertainment License that would only be valid for one year and would have to be renewed each year. This was a direct contradiction of the County’s previous guidance and the statement from Lynn Compton just two months earlier. He stated that all bookings of events must cease until one of these options was completed. Because we were just about to start the 2020 Season of events, it was determined, after consulting with our attorneys, that we had no choice, in the short term, but to proceed with applying for the license. It was determined at that time that this was the only option that would allow those events to take place in 2020.
The licensing application turned out to be an arduous and expensive process involving traffic studies, sound studies, detailed emergency plans, consultants, and other requirements before getting a hearing. At the public hearing on November 10, 2020, which gave the opportunity for residents of Costa Pacifica Estates to provide their input, we received numerous positive public comments, and several positive recommendations from County staff reports. This included a positive staff report from the SLO County Sheriffs office, describing us as an “established entertainment venue” with a good history of cooperation with SLOSD. We were then awarded our license with a 4-0 vote in our favor. This license included several new restrictions that we agreed to.
After the vote to approve our Entertainment License, the Costa Pacifica Homeowners Association, along with Robert Hatfield and Harold Orndorff, filed a lawsuit dated December 15, 2020, in the Superior Court against the County of San Luis Obispo and the raceway to block issuance of the license siting the California Environmental Quality Act. This suit alleged that the County improperly applied two waivers, either of which would allow the issuance of the license without an expensive Environmental Impact Study. CEQA allows for these exemptions if the applicant is an existing facility or if the activities permitted have taken place for three or more years. Because we are, in fact, an existing facility, and can show that all these activities have occurred before 2018, the County determined that we were eligible for both these exemptions. Unfortunately, because of the nature of the CEQA laws, the HOA can hold up the issuance of the license in litigation for years on a license that requires annual renewal and could be subject to lawsuits annually. Add to that the fact that the County has no legal liability in the licensing process, so any legal costs generated by this lawsuit (including legal cost incurred by the County) must be paid by the raceway.
In addition, COVID restrictions enforced by the state and County were still in place in early 2021. This made it impossible to utilize the license we were awarded. Because we could incur hundreds of thousands of dollars in legal fees for a license we could not use we had no choice but to rescind the license.
We have contractual obligations to run the live music events. To comply with the County’s current guidance that any live music must be part of a motorsports event we altered the contracted events on June 26th and July 17th to include motorsports. The County then sent us a letter saying that this was not an approved event as the racing was ancillary to the music. They laid out many definitions of racing that had not been applied before and couldn’t be found in County Code. Some of these detailed descriptions of a race were in direct contradiction of previously approved events like Monster Trucks and Relay for Life events which occurred successfully with no opposition from the County, even though these events were not technically “a race” as they now defined it (again, without stating any County Code). The letter stated we would be fined and laid out the fine structure that totaled $12,500 per event.
The potential fines and lawsuits have put us in a situation that has cost us an enormous amount of dwindling capital. We are still trying to recover from a year and a half of full closure and severely limited activities due to the COVID restrictions that were just recently relaxed.
The lack of capital from this fight has forced us to cancel the remainder of the racing season. Many have pointed out that the County has stated that racing can still take place. While technically true, the County ignores that its actions have put the entire facility at risk. Some have asked why we still are going to put on a few remaining events yet have cancelled the races. The remaining event on the 21st is an event we are contractually obligated to hold, otherwise it would have been cancelled. The Kart Track is leased and operated by Ron Smith, and he has sponsor commitments based on his total schedule. It also takes much less capital from the raceway to hold the Kart Sundays in a safe manner so these will continue until the end of the season. But the expenses to hold the Sprint races safely are much higher. Spending this remaining working capital could affect the financial ability to fight these lawsuits, and could hinder funding the reopening in the event that we can work out a compromise with the County and residents.
Going forward, we are working to open the dialog with the County and the residents of Costa Pacifica Estates. We are hearing that many residents are not interested in this fight and support our right to exist and hold events. We have been willing to make compromises on the number of events, time limits, and other concessions in operating the live music events to help the neighbors. We also want to implore our supporters to please not harass or otherwise do any harm to people or property of the Costa Pacifica Estates. Don’t punish the whole community over the acts of a few. We also want our staff, race fans and race teams to know that we are not giving up the fight. While we can’t make any promises, we want everyone to know that our goal is to return to racing as soon as possible, as well as the other events that keep the race program viable and successful. As the 2019 Season showed, we can and must have a diversity of events and revenue streams to justify the investment made after the County told us in 2018 and 2019 that we could hold these events. We have made every effort to involve the County from the beginning. We cannot understand why the County’s official statements do not acknowledge the communication with us prior to 2020.
Also, we have all the letters, articles, and lawsuits referred to in this post in our possession. And most are publicly available.
Again, we are committed to getting racing and our other events back at the track, but we need your support and understanding as we try to navigate the challenges that have been thrust upon us. But we need the County of San Luis Obispo to honor their original description of our allowable uses that they communicated to us and the public in 2018. We appreciate all the support we have received, including the petitions, funding offers, and most of all, the messages of support to our family and staff. It really has made a difference in this difficult time.
Nick Duggan
