Payday Loan Ruling May Result in New Wildlife Sanctuary
Inside Subprime: Oct 15, 2018
By Kerry Reid
To paraphrase the Talking Heads’ song “(Nothing But) Flowers” – “Once there were racing tracks. Now it’s a peaceful oasis.” That vision could become reality in South Dakota if Badlands Motor Speedway in Brandon doesn’t find a buyer by the end of the year.
As reported October 2 by Mark Russo of kelo.com, the owners of the speedway have said they will tear it down and turn it into an informal wildlife sanctuary if they don’t get an offer. On the company website, the owners posted “We are going to extend a deeply discounted, temporary purchase price of $6,299,999… This deal would need to close by Monday, December 31st at Noon central time. This offer is truly for the first person or group to come up with the money. At this price we are not in a position to hold it for someone only to have them not be able to fund the deal.”
If they don’t find a buyer, the owners say “The top-soil would all be re-distributed and re-seeded and there would truly be a pristine area accompanied by the split rock creek for the deer and the antelope to play.”
The fate of the Badlands Motor Speedway is tied in with the 2016 passage by South Dakota voters of Initiated Measure 21, a statewide ballot initiative that limits interest rates on payday loans and auto-title loans to 36 percent. Previously, South Dakota didn’t have any legal limits on interest rates for such loans. Pew Charitable Trusts reported in 2014 that the average annual percentage rate, or APR, on payday loans in South Dakota prior to IM 21 was 574 percent.
The Badlands Speedway is one of many properties in the region owned by a magnate of storefront lenders. As reported in September of 2017 by Brian Haenchen and Jeremy Fuglebarg of the Argus Leader, the South Dakota Division of Banking revoked the money lending licenses for certain outlets in Sioux Falls and Rapid City. At that time, owenrs put the speedway on the market for $9.45 million. According to Russo’s report, the owner put $15 million into the 74-acre historic property, described as one of the best dirt tracks in the country.
The owner’s Badlands empire also included a radio station, pawn shop and a rock-and-roll academy. Following the passage of IM 21, as reported by Haenchen and Fuglebarg, the owner reopened his storefront loan shops in July of 2017 “under a different business model thought to be within the confines of the newly enacted statute. State regulators decided otherwise, and now the matter is in the courts.”
The South Dakota Supreme Court heard from the owner’s attorney, Zachary Peterson, on October 1 as part of an appeal filed by the business challenging the state’s revocation of the license. As reported by KSFY, Peterson claimed that the official from the banking division “made no attempt to conduct a pre-deprevation [sic] hearing rather he issued findings of fact and conclusions of law and revoked Dollar Loan’s licenses and then made it incumbent on [the payday loan provider] to ask for a hearing.”
A ruling from the state supreme court is expected sometime in the next few months. By then, Badlands Motor Speedway may well be on its way to being a “peaceful oasis.”
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