Latest in the NJMP saga (for those interested)............
06-07-2011, 08:13 AM
#1
Three Wheelin'
Thread Starter
Latest in the NJMP saga (for those interested)............
Short version: New investor group has interest. Consisting of a local developer and "wealthy businessmen, racing enthusiasts and well-known names in the industry." Want to expand infrastructure to increase allure and profitability. Bankruptcy bid is $10M too high and is chilling bidders. Track not happy and claims others are interested in the Bidding process..
..........
Investors want to take over racetrack
MILLVILLE -- The man who put together the deal that gave the city its newest shopping center is now aiming for financial control of the cash-strapped New Jersey Motorsports Park.
Real estate developer Steve Durst, who was project manager for the firm that developed the Union Lake Crossing shopping center, is serving as a member and the public face for a five-member group that is maneuvering to buy a note now held by Merrill Lynch Capital Inc.
Durst and retired businessman Jack Gallagher went public Monday for the first time about the group, which formed about two years ago. The group is in communication with Merrill Lynch, they said.
In interviews, Durst and Gallagher said if they succeed in taking over the park the group would invest $10 million to $15 million immediately in the facility on a range of capital improvements. The idea is to take the facility's "clubhouse theme" and develop the park as a "total family involvement" recreation spot.
• The group would build a 50,000- to 55,000-square-foot facility for The Racers Group at a cost of about $5.5 million. TRG recently left rented space at the park, criticizing current owners.
• An all-terrain vehicle course and a motocross facility would be developed "on a site not objectionable to area residents," Durst said.
• A "family recreational campground" would be developed.
• Amenities for members and competitors, such as showers, would be added. More vegetation and paving to hold down dust are proposed.
• The group would fully compensate the park's long list of unsecured creditors, largely small area businesses, to the sum of about $2 million.
"Steve and I and three other investors have worked rather diligently to come up with a remedy to the rather slow start and lackluster, let's say, development of that opportunity down there," Gallagher said. "It is a terrific opportunity for the region, which is currently extremely tied down with an extreme amount of debt. We think it needs an influx of capital and some capital improvements to turn it around and we're anxious to get that opportunity."
Lee Brahin, a co-managing partner, owner and founder of the park, said Durst's proposed takeover plan doesn't make sense legally. He defended the park's ongoing voluntary reorganization plan through federal bankruptcy court.
"We think we have an equitable plan of reorganization," Brahin said. "We think the auction process is fair. If someone wants to step to the plate and bid -- the starting bid is $23 million -- that is something that would be satisfactory to the secured lender and unsecured creditors. That process is in place."
Durst, no longer with the firm that developed Union Lake Crossing, said the investment group is sitting out the upcoming auction of the park, set for next month. The group feels the auction will exclude meaningful bidders and that the $23 million minimum bid is $10 million too high.
The names of the remaining three members of the investment group remain confidential for now, Durst said. They are described as wealthy businessmen, racing enthusiasts and well-known names in the industry.
Merrill Lynch is the park's top creditor in a voluntary bankruptcy action that started in March. It holds a $30.54 million note that it devalued to $20 million as part of the Chapter 11 reorganization plan.
Brahin said the auction is drawing interest, too. "We certainly have signed a few confidentiality agreements and vetted out whether folks are financially qualified or not," he said.
Brahin acknowledged some development is on hold, but only due to the economy.
"The activity at the Motorsports Park is brisk," Brahin said. "I was down there this weekend. I participated in an event. We had about 200 participants. But there is no indication of anything being lackluster. It seems to me this proposal runs counter to what has been approved by the court and does not favor one bit the position of Merrill Lynch, who is the secured lender."
Durst said, if successful in obtaining the park, his group would do things differently.
"However, what we would do differently is expend a significant amount of money to the capital facilities that I think would elevate the status of the Motorsports Park in the eyes of competitors and spectators," Durst said.
Link.....http://www.thedailyjournal.com/artic...xt%7CFRONTPAGE
..........
Investors want to take over racetrack
MILLVILLE -- The man who put together the deal that gave the city its newest shopping center is now aiming for financial control of the cash-strapped New Jersey Motorsports Park.
Real estate developer Steve Durst, who was project manager for the firm that developed the Union Lake Crossing shopping center, is serving as a member and the public face for a five-member group that is maneuvering to buy a note now held by Merrill Lynch Capital Inc.
Durst and retired businessman Jack Gallagher went public Monday for the first time about the group, which formed about two years ago. The group is in communication with Merrill Lynch, they said.
In interviews, Durst and Gallagher said if they succeed in taking over the park the group would invest $10 million to $15 million immediately in the facility on a range of capital improvements. The idea is to take the facility's "clubhouse theme" and develop the park as a "total family involvement" recreation spot.
• The group would build a 50,000- to 55,000-square-foot facility for The Racers Group at a cost of about $5.5 million. TRG recently left rented space at the park, criticizing current owners.
• An all-terrain vehicle course and a motocross facility would be developed "on a site not objectionable to area residents," Durst said.
• A "family recreational campground" would be developed.
• Amenities for members and competitors, such as showers, would be added. More vegetation and paving to hold down dust are proposed.
• The group would fully compensate the park's long list of unsecured creditors, largely small area businesses, to the sum of about $2 million.
"Steve and I and three other investors have worked rather diligently to come up with a remedy to the rather slow start and lackluster, let's say, development of that opportunity down there," Gallagher said. "It is a terrific opportunity for the region, which is currently extremely tied down with an extreme amount of debt. We think it needs an influx of capital and some capital improvements to turn it around and we're anxious to get that opportunity."
Lee Brahin, a co-managing partner, owner and founder of the park, said Durst's proposed takeover plan doesn't make sense legally. He defended the park's ongoing voluntary reorganization plan through federal bankruptcy court.
"We think we have an equitable plan of reorganization," Brahin said. "We think the auction process is fair. If someone wants to step to the plate and bid -- the starting bid is $23 million -- that is something that would be satisfactory to the secured lender and unsecured creditors. That process is in place."
Durst, no longer with the firm that developed Union Lake Crossing, said the investment group is sitting out the upcoming auction of the park, set for next month. The group feels the auction will exclude meaningful bidders and that the $23 million minimum bid is $10 million too high.
The names of the remaining three members of the investment group remain confidential for now, Durst said. They are described as wealthy businessmen, racing enthusiasts and well-known names in the industry.
Merrill Lynch is the park's top creditor in a voluntary bankruptcy action that started in March. It holds a $30.54 million note that it devalued to $20 million as part of the Chapter 11 reorganization plan.
Brahin said the auction is drawing interest, too. "We certainly have signed a few confidentiality agreements and vetted out whether folks are financially qualified or not," he said.
Brahin acknowledged some development is on hold, but only due to the economy.
"The activity at the Motorsports Park is brisk," Brahin said. "I was down there this weekend. I participated in an event. We had about 200 participants. But there is no indication of anything being lackluster. It seems to me this proposal runs counter to what has been approved by the court and does not favor one bit the position of Merrill Lynch, who is the secured lender."
Durst said, if successful in obtaining the park, his group would do things differently.
"However, what we would do differently is expend a significant amount of money to the capital facilities that I think would elevate the status of the Motorsports Park in the eyes of competitors and spectators," Durst said.
Link.....http://www.thedailyjournal.com/artic...xt%7CFRONTPAGE
06-07-2011, 10:06 AM
#3
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Durst and Jack? Fellows, knock yourselves out...
This from some guys that tried to get a Camden street vintage race going for several years...
Jack's the event chair for the Memorial Day races at NJMP. They had about 70 cars. I wish them the best.
"Big names"? If you can't even put a little event together, how can you assemble the resources needed to keep the place going year round? Their plan only makes sense if they steal it.
Besides, TRG never actually rented any building space there, IIRC.
Lots of talk. Bring on the auction.
This from some guys that tried to get a Camden street vintage race going for several years...
Jack's the event chair for the Memorial Day races at NJMP. They had about 70 cars. I wish them the best.
"Big names"? If you can't even put a little event together, how can you assemble the resources needed to keep the place going year round? Their plan only makes sense if they steal it.
Besides, TRG never actually rented any building space there, IIRC.
Lots of talk. Bring on the auction.
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06-07-2011, 03:34 PM
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06-07-2011, 03:42 PM
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The numbers are the numbers. How much debt can the projected income support? Merrill Lynch is going to have to take a heavy haircut. I wish someone would come up with the magic answer that makes road courses economically viable.
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06-07-2011, 04:10 PM
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On the latter observation, unless the project is very small in scope and privately funded (CMP), privately funded by a sole individual (MMP, Barber, NOLA) or the initial debt has long since been satisfied (LRP, Daytona, Laguna Seca), the simple answer is that there needs to be multi-pronged, cohesive and coordinated development as part of and in addition to the track operations.
That's what VIR and that's what NJMP have done and are doing. Just bad timing, but it is getting better and the light at the end of the tunnel is NOT a train.
06-07-2011, 10:56 PM
#10
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agreed
+1. The existing plan to emerge from the Chapter 11 filing is working. ML has apparently agreed to it by making sure they're not the only ones taking a hit. This is a structured, supervised reorganization, for goodness sake!
On the latter observation, unless the project is very small in scope and privately funded (CMP), privately funded by a sole individual (MMP, Barber, NOLA) or the initial debt has long since been satisfied (LRP, Daytona, Laguna Seca), the simple answer is that there needs to be multi-pronged, cohesive and coordinated development as part of and in addition to the track operations.
That's what VIR and that's what NJMP have done and are doing. Just bad timing, but it is getting better and the light at the end of the tunnel is NOT a train.
On the latter observation, unless the project is very small in scope and privately funded (CMP), privately funded by a sole individual (MMP, Barber, NOLA) or the initial debt has long since been satisfied (LRP, Daytona, Laguna Seca), the simple answer is that there needs to be multi-pronged, cohesive and coordinated development as part of and in addition to the track operations.
That's what VIR and that's what NJMP have done and are doing. Just bad timing, but it is getting better and the light at the end of the tunnel is NOT a train.
06-08-2011, 12:54 AM
#11
Race Director
Yes, but VIR has a major advantage over NJMP -- higher positive cash flow due to a racing season which is at least 2 - 3 months longer due to the more southern location.
06-08-2011, 10:35 AM
#12
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Good idea, it sure worked at VIR.
I think the track itself comes into play as well. VIR is a great track in many ways and it came with a past racing history.
NJMP is also in NJ. On the down side NJ is not the king of welcome when it comes to racers. The land was more expensive and they have to deal with the locals. On the up side it is close to lots of potential North East racers.
NJMP is also in NJ. On the down side NJ is not the king of welcome when it comes to racers. The land was more expensive and they have to deal with the locals. On the up side it is close to lots of potential North East racers.
06-08-2011, 10:45 AM
#13
Three Wheelin'
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^ This is true.
NJMP has an 'identity problem' IMO..
The only true advantage that NJMP has over any other NE track (ie competitor) is an adjacent airport that can land a corporate-sized jet. However, that 'location-service' advantage lends itself more to a 'country-club' Track for wealthy 'arrive (fly-in) and drive' types and styled more like a Barber or Monticello.
The problem is that the 'as-built' infrastructure on site is in no way attractive to such types at this time, nor are the off site options. When the Park's plans were initially introduced they were underwhelming. The area really requires an 'immersion type' experience. You go, you stay, you leave - maybe with some contracted services to the Shore or to the Casinos. But all the necessary amenities and facilities for a weekend or three-day should exist (in a quality way) on site.
I've looked a membership a couple of times (I would be a 'local', living within 30 miles). But unless my wife took up driving in a hard way, it is a tough sell as there is no pool, no spa, and no real amenities of interest to her... and that makes it hard for me to spend the money; but, even more importantly, the time, esp if it will take time away from other things like the beach home, etc..
Now maybe the plan was never to be a 'country club' track. If so, then the draw would have to be the physical characteristics of the courses themselves. But, again, while the tracks are fun and challenging no one here (or elsewhere from my experience) thinks of them as world-class or even 'classic' in the sense of WG or VIR, for example. We know that the configuration was altered from the original design. Whether that design would have been a 'classic' will never be known. However, the point is that it was altered; and, if the track was required to settle, on-site infrastructure then had to take on a new importance..
The economy certainly did not help the Track. But I cannot help thinking that the as built facility was conceived on a 'build it and they will come' theory as was noted by another poster somewhere. IMO just looking at the 'built out' site it is hard to see the stated total debt on the ground. Not saying its not 'there', just that it does not look like it is..
For the Track to make money, not just exist, going forward; it needs to either fill the niche of a 'driving destination-resort' or be considered an annual track season 'can't miss' road course by all drovers within a 300 mile radius... Which is more likely now? My 0.02 cents, soon to be inflated to nothingness.
NJMP has an 'identity problem' IMO..
The only true advantage that NJMP has over any other NE track (ie competitor) is an adjacent airport that can land a corporate-sized jet. However, that 'location-service' advantage lends itself more to a 'country-club' Track for wealthy 'arrive (fly-in) and drive' types and styled more like a Barber or Monticello.
The problem is that the 'as-built' infrastructure on site is in no way attractive to such types at this time, nor are the off site options. When the Park's plans were initially introduced they were underwhelming. The area really requires an 'immersion type' experience. You go, you stay, you leave - maybe with some contracted services to the Shore or to the Casinos. But all the necessary amenities and facilities for a weekend or three-day should exist (in a quality way) on site.
I've looked a membership a couple of times (I would be a 'local', living within 30 miles). But unless my wife took up driving in a hard way, it is a tough sell as there is no pool, no spa, and no real amenities of interest to her... and that makes it hard for me to spend the money; but, even more importantly, the time, esp if it will take time away from other things like the beach home, etc..
Now maybe the plan was never to be a 'country club' track. If so, then the draw would have to be the physical characteristics of the courses themselves. But, again, while the tracks are fun and challenging no one here (or elsewhere from my experience) thinks of them as world-class or even 'classic' in the sense of WG or VIR, for example. We know that the configuration was altered from the original design. Whether that design would have been a 'classic' will never be known. However, the point is that it was altered; and, if the track was required to settle, on-site infrastructure then had to take on a new importance..
The economy certainly did not help the Track. But I cannot help thinking that the as built facility was conceived on a 'build it and they will come' theory as was noted by another poster somewhere. IMO just looking at the 'built out' site it is hard to see the stated total debt on the ground. Not saying its not 'there', just that it does not look like it is..
For the Track to make money, not just exist, going forward; it needs to either fill the niche of a 'driving destination-resort' or be considered an annual track season 'can't miss' road course by all drovers within a 300 mile radius... Which is more likely now? My 0.02 cents, soon to be inflated to nothingness.
06-08-2011, 11:03 AM
#14
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Interesting comments Cello, but I'm not sure I agree with a few. This area is much more of a "destination" than say Monticello. That place doesn't have a good restaurant or hotel near it to save it's life. No pool. No distractions for the non drivers. (Mind you, there's a much higher concentration of wealth which makes the Monticello model a very easy day trip rather than the extended stay that you refer to)
While Millville/Vineland isn't Atlantic City, there are modern accommodations, restaurants, and amenities nearby.
I agree, they need to finish the build out to make this a truly comprehensive facility but even in it's current form I don't see it as very different from its nearby competition (WGI/VIR excluded).
Did the original plans call for the two tracks to be linked? Assuming that's off the table now. That would be real interesting.
BTW, although I'm not a member, I think its a decent value.
While Millville/Vineland isn't Atlantic City, there are modern accommodations, restaurants, and amenities nearby.
I agree, they need to finish the build out to make this a truly comprehensive facility but even in it's current form I don't see it as very different from its nearby competition (WGI/VIR excluded).
Did the original plans call for the two tracks to be linked? Assuming that's off the table now. That would be real interesting.
BTW, although I'm not a member, I think its a decent value.
Last edited by kush07; 06-08-2011 at 11:20 AM.
06-08-2011, 02:03 PM
#15
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As far as I can see, membership provides the right to pay a $2,400 annual fee to attend all spectator events with preferred parking and pay a $165 fee for four 25-minute track sessions with other members and guests. There are about 30 member days each year and a coupld of them offer the advanced driver more track time. The restaurant and guest suites are available to non-members (although there are slight member discounts for the suites on member days).
I'm not sure membership can be justified on any economic basis. What am I missing?
As noted, there is not much at NJMP for a non-driver. The staff is trying, with member wine dinners and other events throughout the year, but....
I'm not sure membership can be justified on any economic basis. What am I missing?
As noted, there is not much at NJMP for a non-driver. The staff is trying, with member wine dinners and other events throughout the year, but....