MILLVILLE — New Jersey Motorsports Park operators are working under what may seem like a strange mindset: Think big, but downsize.
They’re thinking big with new planned attractions like a motocross park, paintball facility, pool, monster truck show, nighttime karting and even exotic “man-cave garages.”
Meanwhile, they’re slashing prices on trackside villas in some cases by more than half of the original $400,000 asking price. The size of the villas is also shrinking, too.
The park’s strategy has changed from that of an exclusive, high-end operation that failed financially to a more broad-based entertainment venue that plans to stay in business by attracting a more diverse customer base.
General Manger Brad Scott says more — and more diverse — events should turn the park into a destination attraction that will draw more customers. Cutting the size and price of the villas will make them more financially attractive in tough economic times, providing the park with non-racing real estate revenue it has lacked since opening in 2008.
“The plan is to get things done as quickly as possible,” Scott said. “We want to get so much done. We want to get it done tomorrow.”
Scott admits that not everything will get done as quickly as hoped. The paintball facility will not open until September or October, he said. A 100-acre motocross facility, an attraction that customers have requested for years, will likely open later this year or early in 2013 instead of this spring, he said.
But what’s important, Scott said, is that park operators now have a specific plan not hampered by something that made running and developing the facility difficult last year.
That something was bankruptcy.
The park filed for Chapter 11 bankruptcy in March 2010 after the recession soured its commercial and residential development plans, which its operators depended on for revenue. Federal Bankruptcy Court records showed the park owned more than $33.1 million to its largest 20 creditors. The bulk of that was a $30 million loan the park had with Merrill Lynch.
U.S. Bankruptcy Court Judge Judith Wizmur approved a financial restructuring plan in July that cut $10 million off the $30 million Merrill Lynch loan. NEI Motorsports, an investor group that includes some of the park’s owners, paid out $2 million to help the raceway meet outstanding obligations. NEI is now the raceway’s majority owner.
“That was stressful on all of us,” Scott said.
But not just on the park: The facility pays about $165,000 in local property taxes to the city, and the bankruptcy filing had local officials more than a little worried.
“It was something that had to be done or they might not be here,” Mayor Tim Shannon said of the bankruptcy proceedings. “I think they’ve learned from that. They’re better off financially. They have themselves a new working plan. And they envision the track much differently than they did when they started.”
Part of that involves more extensive efforts to find out what customers want and how they feel about the park.
The park is doing on-line surveys and “face-to-face” interviews with customers at events to help future planning, said Liz Miller Galantino, the facility’s marketing, communications and sales director. Customers are being asked about aspects such as prices, cleanliness and food, with those answers, as brutally honest as some can be, helping to make the park better, she said.
“How can we create a family-friendly, more affordable option,” she said.
The park is making more efforts to be visible at events throughout South Jersey and the Philadelphia region, Galantino said. The park is also embarking on cooperative ventures with different organizations that essentially cross-market each other, she said.
“We sell fun,” she said. “It’s easy to sell fun.”
Shannon said he’s encouraged by the park reaching out more to local businesses, such as a recent open house that drew about 10,000 to the facility.
“This was a wide-reaching effort on their part,” Shannon said. “They understand that there’s got to be a core group of area people that will support that track. I don’t think you have to be a rocket scientist to figure out that you have to cater to those who are going to come out and support that racing facility.”
Some other changes are more financially basic.
For instance, a trackside villa, which is essentially a condominium with a view of the race course, can, depending on its size, be bought for between $165,000 and $260,000, Scott said. The villas originally sold for about $400,000. The villas are now one-story residences.
Scott said the change is related not only to economic times, but also a better realization of who might buy the villas.
“This is a third home (for some buyers,)” he said. “They don’t need as much room.”
The facility is also advancing with plans for what are officially called “private exotic car garage condominiums.”
The condominiums, which Scott refers to as “man caves,” are 500-square-foot to 2,000-square-foot garages. Interiors can be adopted to have features such as a wet bar, bathroom, wine room, home theater, kitchen and office space. The base price for the garage space and standard features is $62,000, according to the park’s website.
Shannon thinks park officials are making the right moves, and that diversifying their product will help improve a situation that started out at the wrong time with lots of promise.
“Let’s not forget that, unfortunately, the time was absolutely horrible for the park,” he said. “As they got a huge project going and opened up, the economic bottom fell out.”
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