September is unfortunately the early close of our 2011 Driver Education season. After a 3-day visit to Lightning at New Jersey Motorsports Park (NJMP) September 9-11, the last event of the season is the advanced/solo event at Watkins Glen September 19-20. Many of us are lamenting that the traditional end to our season at VIR in November will not happen this year, but the track has promised us a primo date for next year. Going back to July, there was a momentary glimmer of hope that we would be able to get our date back, but the glimmer faded rather quickly. There were a few NNJR members who had gone to Mont Tremblant a few days before our July 15-17 event at Mosport. They had heard that the race that had bumped our date had been cancelled. I started to think that we might have a chance to resurrect VIR; there was still plenty of time to promote the event and based on the number of people who approached me at Mosport about getting the date back, still plenty of interest. Upon return to the states and checking on the situation, it turns out that yes, a race had indeed been cancelled, but no, it was not the one that was scheduled for our usual date in November. By the way, the Mosport event was fantastic – great weather, great people, and one of the best tracks in North America. Keep this one in mind for next year. As I write this now, final planning is underway for the August event at Watkins Glen. The event is a complete sellout, with waiting lists for every group, including instructors. I mention this as a reminder for next year: sign up the first day an event opens, you will always be accepted!
Last month I wrote about the long and rich history of Watkins Glen. Although NJMP has been open only since 2008, their history is short but turbulent. In July the facility emerged from Chapter 11 bankruptcy proceedings, two months ahead of schedule.
NJMP was originally conceived to be a motorsports resort, similar to VIR. The co-owner and developer of VIR, Harvey Seigel, would be the co-manager of the company along with Lee Brahin, a Philadelphia real estate developer. The 700-acre facility would be complimented by an assortment of automotive industries that would include high-end antique or classic automotive clubs; private garages; research and development campus with warehouses, distribution and sales facilities; All Terrain Vehicle (ATV) course; nationally renowned schools for more advanced driving techniques and training for defensive or military evasive driving skills; specialty car gallery for the display and sale of antique or classic automobiles; special motorsports country club and clubhouse; multiple restaurants; villas or condo-style resort houses and conference center designed especially to accommodate the automotive industry. Initially, just one track was planned: a fabulous 4-mile high speed circuit. The initial track design was absolutely awesome. They ended up with two separate tracks after approvals for a single circuit failed.
Whether one track or two, with Harvey and Lee at the helm, how could these grand plans fail? Remember I said the facility opened in 2008. The timing could not have been worse, coinciding with one of the worse housing crashes and economic slow-downs in history. By 2010 the business plan called for the sale of 100 condominiums. The total sold as of today is only eight. Annual income from racing events and concessions is $9 million, but short of expectations. Debt grew quickly. The facility owned over $33 million to 150 creditors, most of it ($30 million) to Merrill Lynch. NJMP’s largest local creditor was the Millville Rescue Squad. The park fell behind $520,035 on payments to the private nonprofit in 2010. The squad provides a range of emergency response services, without which the park cannot operate.
Bankruptcy was the only way out, allowing a restricting of debt, and resulted in a new majority owner, NEI Motorsports. Merrill Lynch cut $10 million from its $30 million loan. The park used $336,000 from Merrill Lynch interest and escrow accounts to help it prepare for the opening of the 2011 season in March. Part of that was used to start re-paying the Millville Rescue Squad.
NEI Motorsports was what is referred to as the “stalking horse”, bidding $22.5 million to be a majority owner of the NJMP upon bankruptcy emergence. This would also result in an immediate infusion of $2 million to fund obligations to the NJMP’s Plan of Reorganization. “Stalking horse” is a phrase derived from hunting, where prey was lured in by a dead horse placed by hunters. NEI emerged as the highest bidder, and they won majority ownership of the NJMP business with Merrill Lynch holding minority interest. Lee Brahin, the real estate developer who led and oversaw the development of the entire facility, increased his ownership stake, and became co-managing partner of NJMP. Harvey Siegel retained his ownership stake and will continue to work on future development concepts and activities, while fostering relationships within the racing community for the Park’s benefit.
What is the status of the facility today? Track officials have said the racing aspect of the facility was progressing well, but money from planned luxury villas, retail space and hotels never materialized. The inability to get those revenues made it hard for the park to be truly financially successful. The Racer’s Group (TRG) based in California, had planned for NJMP to be the East Coast hub of their operations as part of an expansion plan. After many years of planning, TRG backed out in April. In a tersely worded statement, TRG owner Kevin Buckler said “We no longer support the ownership and management of the facility or its vision for the future. Our brand is very strong right now and our NASCAR and Sportscar racing programs are in full swing. It is regrettable, but in the best interest of TRG to distance ourselves from this current situation. Our lease is not up for several months but we are removing all of our equipment, temporary personnel and signs as of today. We wish the park the best of luck in the future and hope we can be back again someday if the conditions are right.”
For all the track enthusiasts out there, I hope that NJMP continues to get stronger, so that we can continue to have a local facility at which to enjoy our passion for driving.