The town of Speedway’s massive redevelopment project has hit a bump in the road over its effort to build a roundabout at a high-profile intersection near the Indianapolis Motor Speedway.

As part of its 16th Street reconstruction project, the town wants to build a roundabout where the street intersects with Georgetown and Crawfordsville roads near the main entrance of the track.

But a billboard near the intersection, at 16th and Main streets, has landed its owner, San Antonio-based Clear Channel Outdoor Inc., and the Speedway Redevelopment Commission in court.

The commission filed suit on Feb. 21 against the company in Marion Superior Court and is threatening eminent domain if Clear Channel doesn’t give up its lease to the billboard.

Speedway already has purchased the quarter-acre sliver on which the billboard stands from owner Carl Culmann. But the town needs to acquire Clear Channel’s “leasehold interest” in the parcel and remove the billboard to begin work on the roundabout, according to the lawsuit.

Clear Channel rejected the commission’s offer of $165,000 and hasn’t countered with an alternative, said Scott Harris, executive director of the commission.

“We followed all of the federal and state guidelines, which require that we do appraisals and tend an offer and give them 30 days to either accept it or reject it,” he said.

Brett Beshore, Clear Channel’s Indianapolis division president, declined to comment on the lawsuit. The company's corporate headquarters said via e-mail Monday morning that it would be "premature for us to comment on the lawsuit until we have the opportunity to fully review the filing."

The billboard in dispute is behind a vacant house on the parcel of property. Harris said the town plans to tear down the home to build the roundabout. Other road improvements near the intersection include new curbs, gutters and sidewalks, as well as road widenings.

The 16th Street reconstruction project is part of an overall $500 million redevelopment project town leaders hope will transform Speedway into a year-round racing-themed destination.

Speedway officials broke ground in November 2009 on the first phase, which involved $6.7 million in road improvements to Main Street, laying the foundation for redevelopment.

The ambitious project includes more than 350 acres from Main Street to Holt Road and from 16th to 10th streets, just south of IMS.

In all, 2.5 million square feet of new development could be constructed, which could return a 10-year economic impact of up to $5.2 billion and more than 2,000 jobs, Speedway officials say.

Harris of the commission said the dispute with Clear Channel shouldn’t delay the building of the roundabout because an exact timetable has not been set.

Court documents show Clear Channel signed a long-term lease with Culmann in April 2011 in which annual rent of $7,000 is set to increase in stages, ultimately rising to more than $11,200 in 2036.