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+--- Thread: NJMP files for bankruptcy (/showthread.php?tid=2549)
- dcwest - 03-08-2011
Posted: Monday, March 7, 2011 11:22 pm | Updated: 11:21 pm, Mon Mar 7,
2011.
New Jersey Motorsports Park files for Chapter 11 bankruptcy protection
By THOMAS BARLAS Staff Writer pressofAtlanticCity.com | 0 comments
MILLVILLE - The New Jersey Motorsports Park filed for bankruptcy Monday.
Operators say the bad economy has stalled the residential and retail
development on which they depended for full financial success.
The filing for Chapter 11 bankruptcy protection - less than three years
after the park opened - will allow for debt restructuring and the
addition of new equity that operators say will allow the facility to
remain open.
Park officials would not comment on exact details of the Chapter 11
action. A U.S. Bankruptcy Court spokeswoman, Deputy-in-Charge Mary
Shashaty, said the agency had not received a filing involving any of the
names under which the park's owners operate.
However, park owner and managing partner Lee Brahin said in a statement
that the filing was "necessary to protect future operations and to allow
the park to continue providing employment and other economic support to
the local and regional communities."
Park officials, who held a job fair about two weeks ago, said the park
will operate for the 2011 season, adding that while the racing aspect of
the facility was progressing well, the money from planned luxury villas,
retail space and hotels never materialized.
Co-owner Joe Savaro said one of the park's main "profit centers" was to
be its potential real estate development.
"When we opened in 2008, it was the beginning of the worst recession in
economic times in 50 or 60 years," Savaro said. "We never were really
able to develop ... that commercial or residential aspect. That clearly
has been a struggle for us from the very beginning. We don't see the
residential market turning in 2011. It will be a challenge to get hotel
financing in New Jersey to begin with. We were kind of stymied on both
of those for the foreseeable 2011 calendar year."
City officials and park vendors said they were notified of the
bankruptcy action Monday morning.
"It's certainly hugely disappointing, and I hope that they can navigate
the path forward," city Economic Development Director Don Ayres said.
"There's a huge concern from all of us here, especially the local
vendors and what happens to them in this process."
The city has spent about $9 million on site remediation for the park.
Much of that involved building water and sewer lines to which the park
could connect.
Ayres said the park also has a $600,000 Urban Enterprise Zone, or UEZ,
loan that financed some startup costs. The park is current on its UEZ
loan payments, he said.
"We do have personal guarantees from the principals, so we fully expect
that we will continue to be paid," Ayres said.
Some vendors contacted Monday by The Press of Atlantic City declined
comment, saying they first wanted to learn more about what was
happening.
Park General Manager Brad Scott said the facility has a wide array of
vendors who provide services such as food, marketing, fuel and office
and cleaning supplies.
"Vendors who are creditors will be paid back according to the petition
under Chapter 11," Scott said. "We don't know what it is now. The
petition is filed, and the decision is made from there regarding
payment."
Located on about 700 acres next to the city's municipal airport, the
park has drawn a mix of praise and contempt since it opened in 2008.
Supporters called the park a jobs catalyst and something sorely needed
in Cumberland County, which has the worst economy in the state.
Opponents claim it is falling short of job delivery, and residents who
live next to the park say the noise from the facility is destroying
their quality of life.
Original plans called for a mix of racing, residential and retail. The
park's website advertises plans that include a world-class road course,
an "exclusive motorsports racing club," luxury "trackside Villa homes"
and a "first-class karting facility where anyone can experience the
thrill of motorsports behind the wheel for the first time."
Scott said attendance at the racing events is "pretty close to where we
had projected."
City officials said the park's land and buildings are assessed at
slightly more than $23 million. The park paid $172,559.94 in property
taxes in 2010.
Park attorney Jeff DiLazzero said in October that the facility has spent
more than $45 million on capital improvements to its property. About
half of that money was paid to Cumberland County contractors employing
union labor, he said, with the rest paid to other southern New Jersey
contractors that also use union labor.
In its first two seasons of operation, track officials said the facility
has paid more than $3.8 million in wages to full- and part-time
employees.
Scott said the park employs between 250 and 300 workers, with only about
22 or 25 being full-time staff. The rest are part-time and seasonal
workers, he said.
The park held its most recent job fair Feb. 22, and it snowed that day.
"The turnout was not as dominant as in prior years," Scott said. "We
have a lot of open positions and filled a lot of positions during that
job fair."
Businesses in the area said they benefit from the park.
Craig Smith, an owner of Executive Protection and Investigative
Consultants, said he and his partner opened their business in Millville
in part because of the park.
Smith said his company is talking with park officials about providing
security for some events. He said the last talks occurred about two
weeks ago and that he was "putting some prices together" for park
officials.
"I still think they're going to be OK," Smith said. "Brad reassured us
that everything is going to be fine in the long run."
Scott Meyers, who owns Glasstown Art Glass on High Street, said "the
whole downtown benefits" from the park.
"I've seen customers," he said. "All the restaurants in town benefit.
Car owners and club members, they're an above-income group, and they
have the time to shop and eat. Everyone around here is very busy during
the racing season."
Ayres said the park is directly responsible for the construction of two
hotels in Vineland and one in Millville, and the planning of several
others in the area.
But not everyone is happy.
The biggest concern from residents living near the park is the noise it
produces.
Some days, depending on atmospheric conditions, sound from the park can
be heard as far away as Vineland and Port Elizabeth in Maurice River
Township. The City Commission frequently hears from residents angry
about the noise.
The anti-noise group TrackRacket has sued the park and the city,
alleging the track is a nuisance and that it has contributed to
decreased property values. A Superior Court judge dismissed Millville
from the case in August.
Park opponents have some support on City Commission: Panel member Dave
Vanaman said he has never been to the park and likely will never go
there.
Vanaman declined to comment Monday, saying he first wants more
information about the bankruptcy proceedings.
- dcwest - 03-08-2011
Sorry, didn't see it already posted