LRP announcement

[kevin22]

Looks like LRP may finally repave and do some other improvements. he will have to if his club idea is going to work. I don't think the mega rich will not hand him over money unless the facility improves.

http://www.limerockclub.com/media/pr_07_07_07.asp

someone should sign up for the tour to find out whats planned. I don't have time, I barely can get away to race. But I am curious if his plans will benefit the racers. or will it just be a bunch of B.S. to attract those with $. It would be nice to see a repave and garages, not a clubhouse with a swimming pool.

[lateapex911]

http://www.limerockclub.com/become_member/benefits.asp

Heres the list of benefits. Seems sketchy at this point.
IT costs:
$110,000.00 one time fee, good for 50 years, transferable or resellable, thru Lime Rock. 2008 monthy fee of $550.
You get:
12 peak track days (of 60 alotted to club use)
skidpad access
8 off peak track days
A new private members only pit lane and clubhouse
Off site vehicle storage
A view of the Berkshires
A badge for your cars grill
4 VIP tix to pro events
and some other mumbo jumbo.

Promised in the release were repaving, a clubhouse, a new and nicer entrance, and better bathrooms.

If he sells al 300 member spaces, he rakes in $30,000,000
and he generates $150,000 per month, for 2008. More later if rates go up...no cap is mentioned.

Now, if we take those track days per year and apply todays test day value of $250 to them, and multiply by 20, we get $3000 .
Add the storage, and lets be generous at $200 a month, x 12 = $2400
and the VIP passes for you and three friends, at ?$50 each x 3 events a year = $600
So thats about $6000 of "value" per year, at the current rates.

Over the life of the membership, it adds up to $300,000.00

but...interestingly enough, IF the monthy dues remain at $550, they add up to $330,000.00 over 50 years.

Now, I'm no accountant, but I have no interest in spending my $430,000 or so dollars over the next 50 years to get something thats questionable value at $300,000.

But thats just me. Maybe those with a few hundred thou laying around might see it differently. It's probably a good write off if you're a corporate entertainment type.

[Greg Amy]

Pardon my cynicism, but:

- LRP's got more demand for their products that they can possibly fill, and continue to raise the track rates with no loss of demand, and
- The track has steadily degraded over the last 15+ years, but this has not degraded the rapidly increasing demand for their product, and
- They're fishing for $30M in capital.

Now, if you were a businessman, and you had a product in high demand such that you could pretty much charge whatever you wanted for it regardless of the condition of the facilities, and someone handed you $30M in capital and said, "go use it to maximize your profits", how would you spend it?

That's what I thought.

The stated reason for the $30M fishing expedition - to keep the "value" of the property as a racetrack above its value for alternate uses - cannot be accomplished with capital improvements. The value of that property as a race track is simply its ability to generate revenue. As noted before, the crappy track surface has not stopped organizations from paying ever-increasing rental rates, thus has no affect on revenue. Ergo, despite what they may choose to use the capital infusion for, its best use for maintaining the value of the property above its value for alternate uses is to simply put it in the bank earning interest, and thusly increasing the value of the corporation in held assets (i.e., in order to buy the track to turn it into a golf course, you're going to also have to buy out the $30M-plus-interest bank account, immediately adding $30M-plus-interest in the purchase price).

So, I'm guessing the real reason is that ALMS (and other Pro organizations) are finally putting their collective feet down and telling LRP's staff that the track surface ABSOLUTELY SUCKS (I'm more sore today after the July 4th event than I've ever been racing), and unless they fix it they're going to lose their main gate-and-concessions-revenue-generating events. And, LRP's management is looking through the wallet, realizing they don't have the cash to cover that expense.

They tried the increase-the-track-rental trick, so the next best thing is for them to leverage their #1 asset: history, location, reputation.

Of course, one can actually easily argue that paving the track is a BAD idea for us grassroots competition clubs such as SCCA and NASA, because an improved racing surface would very likely result in further increasing demand, thus further increasing rental rates. One has to also keep in mind that an additional 60 days of demand will be removed from the calendar, to be reserved for "Club" members, thus tightening the ever-tight available track dates.

Finally, I'm extremely confident that this announcement is PURELY coincidental to the successful advancement of Palmer Motorsports Park - about an hour's drive away and probably a LOT easier to get to from Boston and even New York City - recently beginning to accept inquiries from capital investors from within the same demographics. One big difference here is, of course, PMP is not asking for a "revert-back-to-the-owner 50-year lease" with guaranteed ZERO chance of any return on investment; "join" LRP's club and that money is pissed away, dead, long gone, never to be seen again. PMP, on the other hand, is looking for investors interested in ownership of a track with a very realistic potential for greater-than-normal return, reasonably minimal risk of capital, plus all the perqs of truly being a partial owner in a motorsports facility (which likely includes more than 60 days of track time).

Sorry, LRP. You had your 50 years of opportunity and you squandered it. You watched other facilities across the country (for over 20 years now) be borne and grow using the "business model" you just "figured out" and you wasted those opportunities. You ignored your customers as they tried to tell you things weren't as rosey long-term as you thought.

Now you're seeing something viable showing up in your backyard, and suddenly you've found religion? Kinda "Day Late and Dollar Short", ain't it?

Nah, I'm not cynical. Good luck with The Club thing, though... - GA

P.S., Can you at least hire a graphic designer to do your web pages that understands "contrasting text colors"? Thanks.

[dj10]

[quote] Pardon my cynicism, but:

"So, I'm guessing the real reason is that ALMS (and other Pro organizations) are finally putting their collective feet down and telling LRP's staff that the track surface ABSOLUTELY SUCKS (I'm more sore today after the July 4th event than I've ever been racing), and unless they fix it they're going to lose their main gate-and-concessions-revenue-generating events. And, LRP's management is looking through the wallet, realizing they don't have the cash to cover that expense."

If the track is this bad why are you having your Runoffs there?

[kevin22]

I agree somewhat greg, I do believe that LRP should have been investing into their facility all along, what were they waiting for, Reminds me of the ending days of bridgehampton. I think LRP real competition is not Palmer, but the new track near Atlantic City, in Milleville, NJ. LRP is very popular with the NY Metro area, and the new NJ track is equal distance and is going to be a much nicer facility. I think LRP is going to loose much of its crowd once that track is up and running, and then if Palmer does open, LRP is again going to feel that. where would you want to spend your money, a brand new state of the art facility or an old rundown track. Personally Skip realizes he has some compettion and is trying to do improvements with out spending a dime out of pocket. He is either incredibly cheap or having money issues.

[Jeremy Billiel]

Finally, I'm extremely confident that this announcement is PURELY coincidental to the successful advancement of Palmer Motorsports Park - about an hour's drive away and probably a LOT easier to get to from Boston and even New York City - recently beginning to accept inquiries from capital investors from within the same demographics. One big difference here is, of course, PMP is not asking for a "revert-back-to-the-owner 50-year lease" with guaranteed ZERO chance of any return on investment; "join" LRP's club and that money is pissed away, dead, long gone, never to be seen again. PMP, on the other hand, is looking for investors interested in ownership of a track with a very realistic potential for greater-than-normal return, reasonably minimal risk of capital, plus all the perqs of truly being a partial owner in a motorsports facility (which likely includes more than 60 days of track time).

Sorry, LRP. You had your 50 years of opportunity and you squandered it. You watched other facilities across the country (for over 20 years now) be borne and grow using the "business model" you just "figured out" and you wasted those opportunities. You ignored your customers as they tried to tell you things weren't as rosey long-term as you thought.

Now you're seeing something viable showing up in your backyard, and suddenly you've found religion? Kinda "Day Late and Dollar Short", ain't it?

Nah, I'm not cynical. Good luck with The Club thing, though... - GA

[/b]

Wow Greg! I couldn't have said it better!

With that, the New England Region SCCA is actively looking for investors to help make PMP a reality. If anyone is interested in receiving more details please contact Dick Patullo or myself.

[RKramden]

One has to also keep in mind that an additional 60 days of demand will be removed from the calendar, to be reserved for "Club" members, thus tightening the ever-tight available track dates.
[/b]

It is my understanding that the single largest renter of track days is Skip Barber Racing. It is also widely rumored that they have had a real sweetheart deal contract from back when Skip owned it. Part of the story is that the contract is about to expire, and the track would be looking for a LOT more money.

Could this change the willingness of the Series/School to continue to operate out of Lime Rock? Would that free up a large number of track days?

Also, a new track in Jersey will take a bite out of their customer base as well. Millville isn't much farther from the city than Lime Rock, and for the folks in the Jersey/PA area, it is a lot closer.

The only thing I see in their future is more competition for their customers, and this looks like an attempt to lock in some deep pocket customers.

[dpc]

lets go back on 7/7/08 and reread these post and see where everybody is at that point in history, looking for a bright future for the little guy out there racing. dave

[gran racing]

I'm not saying I fully believe this is the solution but putting the cynicism and any hard feelings aside, what are some of your ideas of what LRP can do at this point in time to ensure it's around 50 years from now? From my understanding, the track is not doing so well financially right now and I'd like to continue see the property as a track and not a condo development.

[Scott Koschwitz]

To follow up on Greg's comment about the sanctioning bodies pressuring Lime Rock to improve the surface --

I attended the ALMS race yesterday, and there was near-universal driver criticism of the track surface (not of the track staff, which they praised quite nicely). The compaints concerned the lack of grip, bumpiness, concrete patches, and the single-groove nature (making it very difficult for the prototypes to pass the GT cars off-line). Johnny O'Connell of Corvette Racing was particularly critical, saying that Lime Rock promised in 2004 to repave, and, while they've made other improvements, they still haven't repaved; if they don't, the ALMS shouldn't return. I think the repaving will be the crux of any discussions about the ALMS returning for 2008.

By the way, the crowd yesterday was huge -- the biggest I've seen since the IMSA GTP days.

The race is on CBS this afternoon at 1 p.m., I think. You just might hear some of the criticism during the driver interviews.

[Jeremy Billiel]

To follow up on Greg's comment about the sanctioning bodies pressuring Lime Rock to improve the surface --

I attended the ALMS race yesterday, and there was near-universal driver criticism of the track surface (not of the track staff, which they praised quite nicely). The compaints concerned the lack of grip, bumpiness, concrete patches, and the single-groove nature (making it very difficult for the prototypes to pass the GT cars off-line). Johnny O'Connell of Corvette Racing was particularly critical, saying that Lime Rock promised in 2004 to repave, and, while they've made other improvements, they still haven't repaved; if they don't, the ALMS shouldn't return. I think the repaving will be the crux of any discussions about the ALMS returning for 2008.

By the way, the crowd yesterday was huge -- the biggest I've seen since the IMSA GTP days.

The race is on CBS this afternoon at 1 p.m., I think. You just might hear some of the criticism during the driver interviews.
[/b]

Watching the broadcast they made many mentions of the poor surface. What I found interesting though was their comment about the concrete having no grip. Isn't it the opposite? I thought they were crazy, but many of the cars did not use the concrete they were staying to the inside of the patches.

On a another note, I would hate the drive LRP as a prototype driver. There is not a lot of places to pass and way too many cars.

[Greg Amy]

Skip Barber was interviewed during the CBS broadcast this afternoon in regards to the LRP Club. I wrote down some quotes of things he said that I found significant (any transcription errors are my own):

In regards to the track, he noted that the track surface is obviously poor, and in need of resurfacing. He also said that the amount of money required to do this work is "...more capital, more money, than any normal-functioning road course could ever generate."

I certainly can't argue with that. I don't know the details of the finances of this track, but I can't imagine how a road course could generate enough profit to cover these costs.

He adds that resurfacing the track is, "...important is the long-range future of this place." I agree.

"There's a tremendous..demand for track time here...the waiting list is five years to get a day here.

"We're going to form a club - a very exclusive club - and ask all the existing users to give up some of their track time so that members of this new club could get access to the track. all that money - and it's a huge amount of capital - [will be spent] on the facilities.

"I think this is a great solution, long-term and short-term."

In watching this interview, and reading the press releases, I'd suggest my alternate theory was correct: they have either not been generating enough profit, or have not been putting aside any profits for a repave (hmmm, how's those "Pave the Track" funds you collected doing?). I suggest there are a number of organizations that are rattling sabers about not coming back (SIGNIFICANTLY detrimentally affecting the future revenue - and "future value" - of the track), and the track just flat out doesn't have the coin to pay for the work. I suppose this is a creative method of generating cash by leveraging the reputation and current high-demand of the track.

But, why the handout route? Why not generate cash the old-fashioned way, through financing or selling equity (selling ownership shares)? I find it bordering on arrogant that Skip thinks he doesn't have to give up equity in the track to generate cash, instead relying on, effectively, donation and selling his product (by further prioritizing track time). But, if he can pull it off, generate the cash he needs for without giving up equity, more power to him.

Of course, then there the troubling line about "ask all the existing users to give up some of their track time so that members of this new club could get access to the track" (and that's a direct quote). Any suggestions as to whom that might be...? The only saving grace in this regard is that the "club" likely only needs non-competition time (read: HPDE time) and the competition days will go to the same existing competition customers. PURELY speculation on my part (but if the HPDE days generate more profit than comp days, he should be selling those to HPDE/Club groups, too...)

Finally, from an investor perspective, I see no value in giving LRP $100k with no potential for any return on that "investment", versus truly investing capital into a very-well-could-be-a-profit Palmer. Suppose it depends on your financial goals, though.

I do wish Skip luck in his endeavor; I'm sure we all united in wanting to see the track repaved and successful well into the future. However, I suggest this push may very well siphon off capital from other options, and I'm sure that the bumpiness for existing track users is only getting started... - GA

[zchris]

Well, I cannot imagine in the middle of farm country, anyone in there right mind would build condos. Kinda thin there Skippy. You mismanaged the track and now are looking for a free ride on the repave and additionally want to line your pockets. I could care less if the track fails under his leadership. Someone else will buy if he fails and could not run it as poorly as it has been. You guys afraid of travel are being to kind to Skippy. With new tracks being built, we do not need them anymore. I'm tired of taking it up the butt at Lime Rock. Like there doing us a favor by renting us there crappy bumpy little bull ring. Good ridence.
Chris Howard

[RKramden]

When I go to other tracks, and see the number of people working there, I am amazed that Lime Rock can turn any sort of profit with the HUGE number of people they have on "Staff". For our non-spectator event, they must have had 40 or more people at the track on the pay role, not counting those up in the office doing other things. That alone must be costing them many thousands of dollars a day.

[GregM]

Greg,
Maybe you should join me for lunch on Tuesday at the Chowder Club at Sardi's where non other than Skip Barber is the guest speaker. I guess I will be asking some very pointed questions............

The track was given a deadline for the track repaving by ALMS. I would have to look back but I believe the date has passed.

Not much has been improved in the past few years at the track. If you want to make money you have to spend money. Maybe they should look at how Thunderhill( which is SCCA owned) is run ?? or maybe take a lesson from Don Panoz. He seems to have the ability to run racetracks and make money ? does he not ?

The also is a " track repaving fund " . What has happened to that ? How much money was in it ?

If the wait to get a date is 5 years why oh why did SCCA give up the National for Mosport where there was 1 T1 and 1 T2 car this past weekend ???? ( 70 cars @ $295 , did this event pay for itself ? ) sounds like a real money maker for SCCA on July 4th weekend. Cheaper entry fee's and a way longer haul ( think fuel prices ) makes Lime Rock fee's look cheap. But this is a whole other topic........................................

$100,000 + $10,000 for membership !!!! Lets see how many fork that over.......... I can think of many other ways to spend my money and earn some equity with it.

Bridgehampton is missed by many lets hope that Lime Rock doesn't follow the same fate..................... .

[gran racing]

Well, I cannot imagine in the middle of farm country, anyone in there right mind would build condos. Kinda thin there Skippy. [/b]

Gesh, I don't know. I wouldn't be overly surprised if another group came in and purchased the land for other use. Thinking selfishly a bit, is this proposed solution such a bad deal for us especially if Palmer happens? Maybe we only have two regional races at LRP each year, but with a much nicer facility and repaved track...

[zchris]

Dave, what, a horse farm. Half the property would be considered wet land for new construction purposes. Bridgehampton had completely different issues that killed it. And if they sell these 100k memberships, our now 3 dates will cost us even more. New York snobery knows no bounds. And what no one has talked about is the dirty little secret. That is how anyone that runs in the Northeast will pay more to run everywhere because to offset loosing money at Lime Rock, regions will have to charge more to subsidize Lime Rock losses. Ultimately the club cannot lose money. So your NHIS entry will have a Lime Rock subsidy built in. Sorry, it will have to. And those of us that do not run Lime Rock will subsidize those that do. Think about that in 2008 when racing at NHIS. GEEZ, track rental only went up 5% but entries went up 25%. Glad I can pay for those that want to run Lime Rock. Not. There is a National at the Rock in 3 weeks. I would rather take the 150.00 in entry fee difference and drive to VIR. It will cost more in time and gas. But I will drive on a smooth, fast and way more fun facility. 400.00 for the bumpy bull ring is not happening. 250.00 for the real race track will. Hope everyone has a safe season.
Chris Howard

[wdether]

or maybe take a lesson from Don Panoz. He seems to have the ability to run racetracks and make money ? does he not ?

If the wait to get a date is 5 years why oh why did SCCA give up the National for Mosport where there was 1 T1 and 1 T2 car this past weekend ???? ( 70 cars @ $295 , did this event pay for itself ? ) sounds like a real money maker for SCCA on July 4th weekend. Cheaper entry fee's and a way longer haul ( think fuel prices ) makes Lime Rock fee's look cheap. But this is a whole other topic........................................

Bridgehampton is missed by many lets hope that Lime Rock doesn't follow the same fate..................... .
[/b]

New York Region shared the track and rental fee with the Canadian CASC/BARC group, I am not sure how much the region had to pay. The region may be somewhat close to breaking even with 80 cars registerred. Mosport is a Don Panoz owned track, the rental fee must have been substantially less than the $27K+ per day (if you include the mandatory service from the on-track catering service) Limerock charges. Some regions in other parts of the country only have about 100 cars per race and still manage to keep racing. It does beg the question how Panos can charge less and still make money. It was obvious money has been spent on Mosport since Panos bought the track (several new paved paddock areas, etc.).

If New York Region kept the national at Limerock they may have been forced to charge close to the $425 NNJR is charging for its national at the end of the month. With $53K in track rental fees and about $13K in other needed charges (catering fees, insurance, etc.) the breakeven figure for NNJR's race is about 165 cars. Will NNJR get that many cars? New York Region may have been smart to take the national to Mosport.

[ulfelder]

A few random thoughts on this thread:

- I consider myself as jaded as the next guy, but wow! The outpouring of cynicism and schadenfraede, from some usually level-headed folks, is surprising. Whatever else is happening, I hope Skip Barber and everyone at LRP realize how little goodwill they have left in the Club Racing community.

- In my experience, it's a sucker's game to try to outguess a business on why it's doing whatever it's doing. I've seen some very reasonable thoughts in this thread on what's going on at LRP (for example, it may well be that ALMS and other pro series are demanding a repave), but there's no way any of us can know the full range of pressures, offers, and opportunities faced by the track. Just to serve up one hypothetical example: would you be surprised if it turns out Barber has a standing offer from a golf-course developer, but he sincerely wants the parcel to remain a race track? I wouldn't. I've got a little family history in the commercial real-estate game, and I know how traumatic it can be when there's a big stack of money on the table in front of you, and you'd love to be rid of the damn parcel, but you don't approve of the planned use.

Again, just thoughts from another racer with the racer's typical love-it-and-hate-it relationship with LRP.

Steve U
05 ITS
Flatout Motorsports

[dj10]

A few random thoughts on this thread:

- I consider myself as jaded as the next guy, but wow! The outpouring of cynicism and schadenfraede, from some usually level-headed folks, is surprising. Whatever else is happening, I hope Skip Barber and everyone at LRP realize how little goodwill they have left in the Club Racing community.

- In my experience, it's a sucker's game to try to outguess a business on why it's doing whatever it's doing. I've seen some very reasonable thoughts in this thread on what's going on at LRP (for example, it may well be that ALMS and other pro series are demanding a repave), but there's no way any of us can know the full range of pressures, offers, and opportunities faced by the track. Just to serve up one hypothetical example: would you be surprised if it turns out Barber has a standing offer from a golf-course developer, but he sincerely wants the parcel to remain a race track? I wouldn't. I've got a little family history in the commercial real-estate game, and I know how traumatic it can be when there's a big stack of money on the table in front of you, and you'd love to be rid of the damn parcel, but you don't approve of the planned use.

Again, just thoughts from another racer with the racer's typical love-it-and-hate-it relationship with LRP.

Steve U
05 ITS
Flatout Motorsports

[/b]

You have pretty well talked me out of running the NE Runoffs @ LRP. Why should I tow 7 + Hrs to race on a track that is in terrible shape? Not only that but I did watch the ALMS yesterday and I'll be there are some drivers that may need a kidney transplant today! At least they get paid for it.