The roots of stock-car racing are located a few hundred yards north of Highway 421 in western North Carolina, a few miles southeast of the town of North Wilkesboro. Highway 2355, a two-lane paved rural road, winds around and over the rolling landscape, dotted with a few brick bungalows, some dilapidated mobile homes and a handful of corrugated metal-roofed chicken coops. Except in this case, Highway 2355 -- also known as Old Highway 421, or Speedway Road -- is the pathway to racing's roots.

Shortly after World War II, local resident Enoch Staley had a brainstorm. Why not build a facility to give local bootleggers a place to race their modified hot-rods legally and perhaps make some money the honest way? Armed with an initial investment of $1,500, Staley and his partners bought some farmland and began construction on an oval to be named North Wilkesboro Speedway. However, as typical of the time, the money ran out before the project was completed, leaving Staley ultimately with an oddly shaped five-eighths-mile track that featured a downhill-sloping frontstretch and backstretch that ran uphill.

North Wilkesboro

Chipped paint, overgrown weeds and rusted fence are now the backdrop at North Wilkesboro Speedway. Grass has sprouted through the asphalt as nearly 50 years of racing memories have faded.

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Still, North Wilkesboro Speedway was an immediate success, both officially and unofficially. A crowd estimated at 10,000 saw Fonty Flock win the first race in May of 1947, although local legend Junior Johnson -- all of 16 at the time -- claims he and his bootlegger buddies christened the track earlier by sneaking in and holding their own event in secrecy. And when Bill France announced plans to create a national stock-car racing series, North Wilkesboro Speedway was chosen as the final event on the 1949 Strictly Stock schedule.

Within two seasons, North Wilkesboro had earned the right to host two NASCAR races, a tradition that would last for close to five decades. In the middle of the 1957 season, Staley decided to pave the track. And as NASCAR grew in popularity, so did North Wilkesboro's reputation, which to Staley meant racing would be placed first and foremost.

He stuck to that ideal even as other tracks began to offer additional amenities, like luxury suites and condominiums, and started to add sideshows to the actual race. North Wilkesboro, with its 40,000 seats, remained a throwback, a place where fans were treated to racing up close at an affordable price. But when Staley died in 1995, the track was sold by his heirs and partners to Bruton Smith and Bob Bahre. North Wilkesboro's two Cup dates were transferred to Texas and New Hampshire, and the track was abandoned following Jeff Gordon's victory in the fall of 1996.

And while racing's roots are still evident in the foothills of the Blue Ridge Mountains, the current condition of North Wilkesboro Speedway shows that time and the elements, coupled with a minimum amount of upkeep in the 13 years since, have taken a heavy toll on what was NASCAR's first sanctioned track.

The entrance sign -- which still showcases the "NASCAR Winston Cup Series" -- is pocked with rust and flaking, fading paint. A glance through the window of the white clapboard building that once housed the ticket and credential office shows furniture still in place, as if waiting for employees to answer the phones that no longer ring and to handle transactions at now-empty ticket windows.

The entrance gate is padlocked, but it's not difficult to walk the perimeter of the track and peer through large sections missing from the weather-beaten wooden fence. With a few well-placed handholds, it's possible to climb high enough to get a panoramic view of the facility, and at first glance, what remains is not a pretty sight.

The concrete, bleached by the summer sun and battered by winter rain, is streaked in many places with brown rust and green mold. The distinctive red paint has faded to an odd pink color over time. There are saplings and brush growing rampant through and towering over the wooden bleachers. The metal and wooden sponsor signage has deteriorated and collapsed into piles at the base of their poles. And weeds are spreading through the cracks in the track surface, as nature attempts to reclaim the property.

Still, when the lumber trucks rumble by a few hundred yards away on Highway 421, it's easy to close your eyes and imagine Hudsons, Studebakers, Plymouths, Mercurys, Buicks and Oldsmobiles roaring around the track, like in the glory days. But those days have passed, and may never return.

Measuring the losses

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Paint has faded and grass has crept through the asphalt of the racing surface.

So how has the closing of North Wilkesboro Speedway affected the local and regional economy? How does a region replace the revenue lost when two major money-making events are eliminated? First, there's the matter of figuring out how much revenue an event like a NASCAR race provides to the local economy. And there are divergent opinions on how to come up with an accurate measurement.

"Clearly, there are people in town who wouldn't be there if not for the race," said Dennis Coates, professor of economics at the University of Maryland, Baltimore County. "And that's going to spoil over into some expenditures, mainly hotels and restaurants, bars, stores and gas stations. Then the question is, how much of that business translates into income for the community that there wouldn't have been otherwise. How much of it translates into tax benefits for the local government. That's when the questions become a lot sketchier."

So how do you figure the economic benefit? Coates said it's a matter of looking at several variables.

"What economists do is say, 'What will happen if the event doesn't occur and what will happen if it does?'" Coates said. "And what portion of the stuff that happens when it does would have happened otherwise? The typical impact story doesn't do that last question. They'll say, 'Here's what happens when the event occurs' and they'll never, or in a very sort of off-hand unsophisticated way, say, 'Well, some of this would have happened otherwise.' Typically, they don't.

"So the typical impact study will find a lot larger number than will the typical economist's evaluation of the situation. The multiplier effect is a part of that difference between what happened specifically and what would have happened otherwise. If you take the full spending, and say all of these occurred because of the event, when only perhaps half of it did, then multiply that as money circulating through the economy, then you're going to get a much larger number."

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Grass and rust have overcome much of the track and grandstands.

Coates said the multiplier effect can create a situation where the economic impact is shown to be substantially larger than it really is.

"There's also a question as to what magnitude that multiplier should be," he said. "Do you multiply that initial spending by two, seven, 10? The initial estimate that economists who don't have a dog in this fight suggest 1.2. A typical impact study may use two, three or four. Obviously, you're going to get more impact."

The Washington Economics Group, a private firm hired to conduct economic impact studies for several NASCAR tracks, recently announced findings that show Darlington Raceway creates $54 million in direct and indirect economic benefits to the region, while Martinsville Speedway had an economic impact of more than $170 million to the immediate area.

However, there are economists who feel figures like those may be overly optimistic. Victor Matheson, an economics professor from the College of the Holy Cross, has looked at the effects of major sporting events on the local economy, specifically NASCAR's most well-known race.

"One of the first studies I actually did took a look at the Daytona 500," Matheson said. "The numbers we came up with for the Daytona 500 -- which legitimately does bring gigantic crowds from around the country -- we have that being about a $30 million impact on Volusia County. That's the biggest possible event, when people come in for several days, and we ended up with $30 million in taxable sales increases over that time. We kind of use that as an upper boundary for any possible economic impact for a big race."

Another of Matheson's studies dealt with a situation very similar to what occurred in North Wilkesboro on a twice-yearly basis, a major event taking place in a small community.

"We've also looked at college football in small towns," Matheson said. "That's where you're pouring 50,000 people into a Clemson, S.C., or a Jackson, Miss. We've come up with figures of about $2 million increase in taxable sales for a college football weekend. That's again because a lot of people are locals anyway, and they stop shopping at the mall to go to the football game instead. So even though you may be doubling the size of your city because of the stadium for that day, it really doesn't translate much into economic impact."

"And if you take $2 million in taxable sales at a 5 percent tax rate, you're talking about maybe $100,000 in tax money coming into the city for that."

So why the huge discrepancies in economic analysis? According to Matheson, there are three major factors that some studies fail to take into consideration: the substitution effect, crowding out and leakages.

"The substitution effect [is] when local people spend money at the race track rather than elsewhere in the local economy," Matheson said. "If you have locals who go down to the race track and spend their money a couple of times when the races come down, rather than spending it at local restaurants or local movie theaters, while the race track is creating economic activity in a gross sense, in a net sense it's just shuffling the money around."

"We think probably the bigger the event, the less that becomes an issue," Matheson said. "In general, if you're talking about the Truck Series and lower level stuff, at that point you're probably looking at primarily drawing locals instead of people from around the country, compared to something like Daytona, which does draw a nationwide audience. So much more of the economic impact of a big event is going to be from outside the area. The smaller the events, it's more likely that you're just reshuffling money in the economy."

According to Matheson, "crowding out" is a situation where normal tourism revenue is replaced temporarily by fans attending a major event.

"This is certainly an issue in big races or any sort of races in small towns," he said. "What happens here is that race visitors come to town and they crowd out any other economic activity that happens. No one in their right mind plans a vacation to Daytona Beach in mid-February, even though Daytona Beach is a lovely place to be then, because they know they'll be crowded out by race fans.

"For example, I was a referee for Major League Soccer for a number of years. The first year, we had our training camp in the spring and we held it in Orlando in mid-February. It was so expensive for us to fly into Orlando then because we were doing it the same weekend as the Daytona 500, that we have never gone back to Orlando again because when we want to hold our event coincides exactly with Daytona. So Daytona brings in a bunch of people, but it flat out keeps others from going there."

Then there are leakages, described by Matheson as a situation where not all the money that changes hands during a major event remains in the local economy.

"For example, even though hotels are more expensive for race weekends, if the local chain hotel triples their room prices, they're not tripling the wages of their local employees," Matheson said. "All of that extra money is going back to their corporate headquarters. People come and stay in chain hotels and eat at chain restaurants -- that's money that very specifically may not stick in the economy very long."

And it's intensified during a race weekend, Matheson said, because visitors rarely take a chance on trying something new, like a local restaurant or motel.

"People from out of town tend to go to chains rather than local places because they know what to expect," Matheson said. "It's slightly more subtle with big events. We know that's accounted for in the multiplier effect in general, except we think it's even more pronounced during mega-events, because you have even more of the economic activity shuttled to the big hotels. Regular tourists will frequent chains, but when you have a mega-event, you're spending a disproportionate amount of money at places that's going to leave town."

Coates did a research paper on hotel accommodation tax revenues for the area surrounding Darlington, and found that race weekends typically did not make a major difference in revenues for local municipalities.

"When I look at all of that data, when I take the Septembers when the Southern 500 was run and compare it to the Septembers when it wasn't run, or I take the Marches and compare them, what I find is there is basically no difference in the hotel accommodation tax revenues," Coates said. "And that's true basically in Darlington and most of the counties around it.

"Now that doesn't mean there's not a benefit to Darlington County or the surrounding area for having the races there. You just can't claim that there's all these huge tax revenues being generated by people staying at hotels that would otherwise be empty. That's one of the points that most of us who do this want to get across. That doesn't mean there isn't an impact. But it's not big. People look at these numbers and say, 'Wow, that's a big deal.' But what they don't understand is that it's relative to an economy that's much larger."

Coates said there's a logical reason why that would be the case. The hotels along the Interstate 95 corridor have steady business throughout the year, so a temporary spike in occupancy from a race weekend isn't going to change the overall average that much.

"Those hotels couldn't possibly stay in business if they were consistently empty all the time, or have the same amount of traffic," Coates said. "At a basic intuitive level, they couldn't survive if two weekends a year, they were full, and the rest of the time, they had 10 percent of their rooms occupied. They wouldn't last."

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Wooden signs have crumbled at the track in North Carolina's countryside.

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One day or one weekend is really only a drop in the bucket. That doesn't mean it isn't a nice drop to have -- I think you'd rather have the race in town than not. On the other hand, I don't think it's going to kill you to have that go away. If the local track wanted the local government to spend money on improvements to get the race back, that's probably not a very wise use of public money.

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VICTOR MATHESON, College of the Holy Cross economics prof.

But what about the prestige of holding an event like a Sprint Cup race? Doesn't that account for something?

"So how much does an event like this put a city on the map?" Matheson said. "There is certainly something to be said about that. I would only throw in two caveats. First, just because people come to the town does not mean they are favorably impressed and want to come back. It's not always something that leads to a positive image for a city. Just because you're getting publicity does not mean it's always positive."

For example, the controversy surrounding the judging at the Salt Lake City Winter Olympics may have had led to a negative image of the city. Or even worse, fans attending an event return home unimpressed, as may be the case for some Super Bowl sites.

"Secondly, when places have held big events, any sort of bump you get tends to be short-lived," Matheson said. "For example, Calgary held the Winter Olympics in 1988. It was the center of world sport for a month, a huge increase in name recognition among people worldwide for about two or three years, but within four or five years, any bump in name recognition had basically dissipated. Obviously, if this is an annual event, it's a little different. But it's the same sort of concept. Once the attention is directed elsewhere, it fades pretty quickly. I don't know how fast it would fade with NASCAR."

And the tax revenue that a major event provides is truly only a tiny portion of a municipality's overall fiscal budget. For instance, Wilkes County's 2008 budget is more than $70 million, up nearly $15 million from three years ago. So even if North Wilkesboro Speedway was in operation, the benefit to the county would be minimal.

"One day or one weekend is really only a drop in the bucket," Matheson said. "That doesn't mean it isn't a nice drop to have -- I think you'd rather have the race in town than not. On the other hand, I don't think it's going to kill you to have that go away. If the local track wanted the local government to spend money on improvements to get the race back, that's probably not a very wise use of public money."

In the case of North Wilkesboro, the owner -- Speedway Motorsports Inc. -- is still paying property taxes on the facility, which was reportedly assessed at $4.83 million.

"Unless [Bruton Smith] declares bankruptcy, that's still a revenue-generating property," Matheson said. "If he wants to redevelop it or sell it for redevelopment into something else, government shouldn't stand in the way. They should do everything they can to encourage private investment but spending public money bringing that back, I don't think there are many economists who would think that would be a particularly wise use of public money."

The closing of the speedway came at a particularly critical time for North Wilkesboro and Wilkes County. While the spotlight was focused on losing the race dates, several major long-time Wilkes County employers shut down or downsized.

"Furniture and textiles were our second emerging industry, and really they were huge industries down here as late as 10 years ago," said Don Alexander, executive director of the Wilkes Economic Development Corporation. "About the same time that the speedway was still going, we had Carolina Mirror, the largest mirror manufacturing plant in the world, and Ansell Gloves. American Drew had a significant presence. Key City Furniture was a local company born here and a very significant player, and of course, Lowe's, which started out as North Wilkesboro Hardware.

"Now we're seeing a reversal in that. The Chinese influence has devastated the furniture and textile industry."

But as one door has closed, another has opened. The old Wilkes Mall, once nearly devoid of retailers, now provides office space for Lowe's Companies Inc.'s information technologies division. The long-awaited Highway 421 widening project, which ironically was completed too late to be used to alleviate the speedway's legendary traffic tie-ups, has dramatically changed Wilkes County's commuter flow. At least 100 residents of 19 different North Carolina counties, some from as far away as Raleigh, work in Wilkes County.

And local tourism hasn't skipped a beat, either. In addition to promoting the area as the gateway to the Blue Ridge Mountains, events such as Merlefest, the Shine to Wine Festival, the Blue Ridge Music Hall of Fame and the Brushy Mountain Apple Festival bring in visitors from all over the Southeast.

Economic leaders correctly realized they needed a new marketing strategy, which is how MX Aircraft, one of the world's leading manufacturers of sport aircraft, now calls North Wilkesboro home.

"Last year, we attracted an aircraft manufacturer of composite sport, aerobatic and racing airplanes," Alexander said. "It's basically the Ferrari of airplanes. So last year's advertising campaign was 'We're racing to a new height.' And the reason why MX Aircraft chose Wilkes County was in part because of our rich and deep racing heritage. ...

"For us to survive, we needed to diversify and go after niche industry clusters that are growth industries. Composite manufacturing is one of them."

In addition to MX Aircraft, Alexander points with pride at two other locally based companies that may drive the economic engine for the near-term. One is Powersport Grafx, a company that creates bold graphic design detailing for several different brands of motorcycles and accompanying accessories. Alexander said there are plans to add a motocross test track as part of the company's research and development department. In addition, Powersport Grafx may be adding "two well-known global brands" to its current manufacturer list, which includes Honda, Suzuki, Kawasaki and Yamaha.

The third company on the Wilkes County watch list is Industrial Process Solutions Inc. According to Alexander, the company is close to a breakthrough that would allow for the extraction of clean methane gas from coal. And the byproduct -- activated charcoal -- could be readily made into synthetic diesel fuel. Originally planning to build a facility of about 5,000 square feet for 10 employees, Alexander said IPS is now looking at a 125,000-square-foot facility with as many as 200 employees.

Blessing in disguise

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Bruton Smith will sell the race track for a price of $12 million.

The future of North Wilkesboro Speedway remains murky at best. Smith has set a $12 million price tag on the facility, and there have been several serious inquiries. One of the biggest drawbacks is the track's condition. In addition to the obvious repairs, the septic tank system was woefully inadequate when racing was still held there, and the new owner would probably need to install modern water and sewer lines. It's estimated that the facility would need a minimum of $2 million in renovations before any events could be held there.

A Georgia businessman reportedly plans to lease North Wilkesboro Speedway this spring to produce a reality TV show based on a fictional women's racing league, but some civic leaders are skeptical of its success. More encouraging is the news that some NASCAR teams have inquired about the possibility of testing there. Because the speedway falls outside of NASCAR testing ban, the track could see use. However, there are no SAFER barriers and it's unknown what condition the racing surface is in, and how much SMI would be willing to spend in repairs.

But Alexander admits all of this wouldn't be possible without Wilkes County's racing heritage, which revolves around the monument to racing's roots, out on Speedway Road.

"Thanks to the speedway and the area's racing heritage, all these variables make us one of the preeminent business destinations," Alexander said. "The first thing you have to do in economic development is make sure people are aware of where you are, aware that you exist and have some sort of mental picture of what you're about. If a manufacturer in another part of the country is looking to move, and he doesn't know a thing about Wilkes County and doesn't know it exists, he's not going to think about it.

"This year's campaign will be, 'We Speak Speed.' That ties back to the earliest days of moonshining to North Wilkesboro being the first officially sanctioned NASCAR track to now, having the fastest thing on two wings and a propeller in the world."