NJMP Bankrupt?

Linked Article for those too lazy to click said: MILLVILLE -- New Jersey Motorsports Park on Monday signaled it is in financial trouble and filed court papers seeking federal bankruptcy court protection. The Motorsports Park, entering its fourth year of operations, said its 2011 racing season would go on as planned even as it seeks a judge's agreement on a proposal to balance its books and settle with creditors. A petition for Chapter 11 bankruptcy protection was filed in midafternoon with the U.S. Bankruptcy Court in Camden. There will be no layoffs because of the filing, according to a statement from park officials. City officials deplored the impact on an undetermined number of local businesses that have overdue accounts with the park. Those creditors now face a long, uncertain recovery. Officials say the city government itself is not financially at risk, however. The park is current on all municipal tax and utility bills as well as repayment of a $600,000 municipal loan, city officials said. Motorsports Park Managing Partner Lee Brahin and General Manager Brad Scott announced the court filing. "Our overall plan for the future is still sound," Brahin said. "Our renegotiated debt financing will enable us to move forward with our existing operational plan, although we will continue to reduce operating expenses and are in the process of renegotiating debt with vendors." Scott said the park's principal lender, Bank of America, already has forgiven some of its debt while restructuring the park's mortgage. The current owners also are putting more of their own money into the operation, some of which could go to creditors, he said. Scott said the decision to file for bankruptcy protection was reached last Tuesday, with input from Bank of America. The park had been discussing the option for 90 days, he said. The bankruptcy news broke first locally at a private meeting at 9 a.m. at City Hall. The meeting punctuated weeks of rumors about the park's financial status. According to city leaders, park officials called last week to request a meeting with Mayor Timothy Shannon and Vice Mayor Joseph Derella. Shannon ultimately could not attend due to a family emergency. Scott and Joseph Savaro, a partner in the business, met for about 50 minutes with Derella, city Solicitor Richard McCarthy and city Administrator Sue Robostello. "As a city, we must reserve all rights and explore all options under state law as to what our actions will be in coming days," Derella said afterward. "We are also especially concerned about all the unsecured creditors that have provided products as well as services and have not been paid by NJMP. The city hopes that NJMP is successful in their reorganization, because we still believe that the project is the future of not just the city but the entire region." Derella, who oversees the city's finance office, said the park is up to date with loan, tax and utility payments. The city has extra security on a loan to the park. Brahin and Harvey Siegel, another Motorsports Park partner, both signed personal repayment guarantees that the court filing does not affect. The first public suggestion the park was in financial trouble surfaced in January. The park confirmed the nonprofit Millville Rescue Squad was owed an unspecified amount of money from 2010. The squad has a special division that provides a range of services to the park during events. In February, the rescue squad and park confirmed a settlement of the debt, but released no details. Scott said Monday's court filing won't affect that agreement. Besides the financial implications, Monday's news is a political blow to city officials who gave full support to the park from its inception. Just a few years ago, city and county officials had called the park one of the most significant economic development projects ever seen in Cumberland County. They envisioned it as a major employer whose success would be a catalyst for other investment. The park was conceived as a venue that could draw motorsports events and fans for the better part of the year, but in relatively small crowds of 10,000 to 30,000 people. The park is off Buckshutem and Dividing Creek roads, a property adjacent with the municipal airport. It comprises more than 500 acres and, if expansion plans are finished it would take straddle more than 700 acres. The city and county went all out for the project, which was announced in June 2004. Millville created a new zoning classification for it and helped with financing. Perhaps most grueling, city commissioners and other officials fought public relations and legal battles against opponents. Derella fully expects renewed criticism. "When you've got to make the call, all your have is the facts at hand," he said. "That's where being a leader comes in play. Yeah, we'll get criticized, but the city of Millville is protected." Shannon spoke with Derella about the meeting. " My first reaction to Joey was how extremely disappointed I was and obviously concerned for the vendors that are owed money," Shannon said. Despite the bad news, city officials confirmed their belief the park remains a key piece to the city's future. "I would surely hope they would take a good hard look at their management team when they restructure," Shannon added. "Obviously, something is not right. That is something for them to figure out. I don't have all the details. I still believe that the park, its concept, as an economic engine for the area. I still firmly believe that." The local community group Millville First has criticized government officials' coziness with the park. Paul Porreca Sr., a founder and leader in the group, reacted to the news with a wish the park does well. "I think it is very unfortunate when any business has financial problems," Porreca said. Another park critic is Michelle Post, a Lawrence resident who objects to the level of noise at the park. She owns a home nearby. Post formed TrackRacket with other residents, who have gone to court over the issue. She referred a request for comment to her attorney, who did not respond by press time. Post, though, did respond in an online discussion at thedailyjournal.com. "I am saddened that the track owners would treat their biggest and most vocal fans this way," she wrote. "In my opinion, this is downright despicable." Donald Ayres, the city's economic development director, said the park still has a future. "The first concern we have is the local vendors and how it is going to turn out for them through this process," Ayres said. "But I've read the press statement. And we have to hope that the path forward is the path they've laid out in there, so that long-term this can become successful and what we've all worked so hard to try to bring about here." Ayres said a successful 2011 racing season would help the park recover its image. City Commissioner James Quinn, who was mayor when the park project started, said the news was not a complete surprise given the state of the economy. "Things are really tough everywhere," Quinn said. "I was glad to see people will keep their jobs." Quinn said he is satisfied with the current ownership's efforts and, despite its troubles, said the park has contributed importantly to local development. "If it wasn't for the park, the Fairfield Inn wouldn't be built," Quinn said of the city's newest hotel. "That's a $14 million ratable. It is a bump in the road, and we're all hitting it."

I was hoping to run Thunderbolt next summer. Will wait and see the news.

http://www.thedailyjournal.com/article/20110308/NEWS01/103080307

Sucks for all of the vendors who paved, constructed, ran electrical and whatever else was needed to get the place up and running who are now getting shafted.

Isn't that track just a few years old? How do you get to bankruptcy so fast?

carguy123 wrote: Isn't that track just a few years old? How do you get to bankruptcy so fast?

Lots of high interest debt and having to pay for lawyers because of some lawsuits over noise (I'd guess).

I think the track is only 3-4 years old.

Brotus7 wrote:

carguy123 wrote: Isn't that track just a few years old? How do you get to bankruptcy so fast?

Lots of high interest debt and having to pay for lawyers because of some lawsuits over noise (I'd guess). I think the track is only 3-4 years old.

I don't think noise is/was the issue. The airport next door has P-51 Mustangs and giant dual prop helos running in and out all day long.

I think that when it was conceived - there was a lot more money floating around. The idea that it would dry up in just 5yrs along with the wallets of tons of folks who just can't afford to come out and race was not accounted for.

NJ is a terrible place to try to get anything done cheaply. The construction industry is choked so tight you cannot have the same guy install the lamp and screw in the light-bulb. I am sure it was the most expensive race track in North America. It is a really nice facility in a great location - I hope someone can turn it around.

Giant Purple Snorklewacker wrote:

Brotus7 wrote:

carguy123 wrote: Isn't that track just a few years old? How do you get to bankruptcy so fast?

Lots of high interest debt and having to pay for lawyers because of some lawsuits over noise (I'd guess). I think the track is only 3-4 years old.

I don't think noise is/was the issue. The airport next door has P-51 Mustangs and giant dual prop helos running in and out all day long. I think that when it was conceived - there was a lot more money floating around. The idea that it would dry up in just 5yrs along with the wallets of tons of folks who just can't afford to come out and race was not accounted for. NJ is a terrible place to try to get anything done cheaply. The construction industry is choked so tight you cannot have the same guy install the lamp and screw in the light-bulb. I am sure it was the most expensive race track in North America. It is a really nice facility in a great location - I hope someone can turn it around.

Ya gotta grease Bobbarinos palms, whatsamattayou?

It could also be a ploy to get better financing. Kind of like OCC was shown to be doing in their TV series. This track was started before The Great Meltdown.

Time for the GRM crew/forum members to chip in and buy it for a steal. GRM Raceway has a nice ring to it... So does Grassroots Motorsports Park.

Giant Purple Snorklewacker wrote: I don't think noise is/was the issue. The airport next door has P-51 Mustangs and giant dual prop helos running in and out all day long.

Didn't stop a NIMBY citizens group from forming with the express purpose of bitching about the noise. They've had numerous battles.

I'd bet the economic downturn has been more of a problem. It was built at a time when it seemed the sky was the limit. Then the bottom fell out.

I've driven both Thunderbold and Lightning - Fun tracks, low key area, easy to get to from my home in NYC. One thing I noticed on each visit was the empty-seeming trackside condo/garage units. I think the developers counted on selling the condos, and that sales basically tanked...

I don't think the track is going away, I get more of a feeling that the track's financial backers have forced the issue. I have seen some stuff that leads me to believe that the financial types have really held the finances under very tight control. This could be a ploy to get back some control. That being said the management at NJMP don't seem to get the business end of the facility and hopefully this will bring some good changes to the whole situation.

NY535iManual wrote: I've driven both Thunderbold and Lightning - Fun tracks, low key area, easy to get to from my home in NYC. One thing I noticed on each visit was the empty-seeming trackside condo/garage units. I think the developers counted on selling the condos, and that sales basically tanked...

They priced them like a penthouse in Manhattan. You can rent or buy a whole house with a pool, garage and so on anywhere in the area for nothing these days and they are asking top dollar.

Hello pay toilets and $8 dollar beers and $8 burgers

Bankruptcy doesn't mean the track is going away. It only means that those owed money will not get paid in full (or at all).

considering that they still plan to run a full 2011 schedule, and none of the employees will get laid off, my guess is that the speculation about this being a control/forecasting the future sort of thing are true. Im sure they are looking to fix this thing now before they really are broke and cant keep the lights on, which is kind of nice to see versus the typical omfgweneedabailout that most "too big to fail" types are seeing.

Never mention "too big to fail" in my presence.

My closest friend lives about 15 minutes to the track. He'll be miffed.

Can't say I'm shocked. All of these projects started in the mid 2000's with $2 gallon gas, 14,000 point Dow Jones and housing increasing 10% to 20% per year. $100,000 for a track membership? I can run Lime Rock with my local club for 317 days at that rate.

I'm not shocked either, they are rather expensive. Hopefully they'll drop their prices a bit in order to get more people on the track to make money off of.

It sounds as though this is more about controlling/restructuring finances than it is about ending badly now that I have asked around a bit. That is the spin they are giving the local NASA, PCA and BMW clubs. Nobody is getting stiffed yet. Our 4 events are still fine and they sent the notice to the registrars in advance of the press release with a story to quell the panic.

I love racing, and would love to have my own track... however, unless I knew I had unlimited cash flow for an unlimited time I would never build/own/invest in a race track, they are just giant black holes IMO

As always, I blame Jersey, but this time, I may actually be half-correct. That state is insanely expensive, and as someone else pointed out, it was built pre-bubble-burst.

Damned shame though, I still haven't been there.

Giant Purple Snorklewacker wrote:

NY535iManual wrote: I've driven both Thunderbold and Lightning - Fun tracks, low key area, easy to get to from my home in NYC. One thing I noticed on each visit was the empty-seeming trackside condo/garage units. I think the developers counted on selling the condos, and that sales basically tanked...

They priced them like a penthouse in Manhattan. You can rent or buy a whole house with a pool, garage and so on anywhere in the area for nothing these days and they are asking top dollar.

We have a winner!!! Ding Ding Ding!! Jerzy housing market is in a free fall still (not as bad as south florida, but you get the idea).

Having worked in Millville I was a stone's throw from the track. And being the first "real shop" nearest the track I'd see a lot of neat machines coming and going. It was exciting to see it get built up.

But I also know that who area went through a huge buildup pre-bust era, not just the track. Evidently someone in South Jersey was very good at a talking up the area's potential, but it just doesn't have the cash flow. The locals aren't called "Mill-Billies" for nothing.

That said I don't think its going anywhere. Its just restructuring as has been stated.