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Race complex planner has deadline to get finances on track
Sunday, October 07, 2001 By Mark Belko, Post-Gazette Staff Writer
The company seeking to build the first indoor auto racing complex in the world on land near Pittsburgh International Airport has until the end of the year to come up with financing for the project or lose its exclusive right to develop the property.
The Allegheny County Airport Authority does not plan to renew the memorandum of understanding that gives Brant Motorsports of Morgantown, W. Va., control over the land unless it can finalize the financing that so far has eluded it.
"In absence of some compelling reason to extend it, I think the agreement would fall under its own weight," authority board Chairman Glenn Mahone said. "That's a prime piece of property. It's not out on the fringe. It is a plum and we can't keep it tied up forever."
The sentiment against renewing the memorandum of understanding, first enacted in June 1999 and extended last year, comes about a month after Brant Vice President Bob Brant met with Youngstown, Ohio, officials about a site for the racetrack there.
Brant called the interest in Youngstown a "rumor that got a little blown out of proportion."
"We had taken a look at Youngstown. That's not unusual. We've looked at other sites throughout the project. We've done that several times during the project," he said.
Brant said he did not know whether he would have further discussions with Youngstown officials. He said he still would like to build the racing complex at Pittsburgh International Airport.
"That's where we would like to be," he said.
The proposed facility, which would be built on 145 acres of land on a bluff overlooking the airport, was unveiled with great fanfare in April 1999. The track would be the first of its kind anywhere in the world.
The complex would feature a 1-mile oval track with 850-foot straightaways. It would seat 60,000 people and use a sophisticated air flow system to remove exhaust from the facility. Soundproofing would be used to deaden the noise.
At the time of the announcement, Bob Brant and his brother, Ted, promised to finance the entire cost of the project, estimated at more than $300 million, privately.
But since then, the project has suffered a number of setbacks or delays, the most unfortunate of which was the death of Ted Brant in June 2000. It was Ted Brant who launched the idea of building the track.
The firm also ended up at the mercy of the bureaucracies of the Airport Authority and the Federal Aviation Administration, which had to sign off on the environment assessment report for the track and 41 other projects planned at the airport. Brant had hoped to get that approval in October 2000, but the process ended up taking until April.
As a result, the firm had to push back groundbreaking dates three times -- July 2000, November 2000 and mid-2001. In an interview last week, Bob Brant would not give a new groundbreaking date but said he hoped to have the complex completed in 2003.
The biggest obstacle has proven to be financing. While the firm has been able to secure a number of federal and local approvals for the project, it still has not been able to complete the funding.
Brant could not predict when that would happen.
"That's a difficult question to answer. With the conditions in the market, things are looking conservative. You have to take your time and shop around," he said.
He would not say how much financing was in place, although he acknowledged that the sale of naming rights, considered one of the key components of the project, probably would be put off until the complex is under construction.
Brant said he was aware his exclusive right to develop the land would expire at the end of the year. He did not see that as an issue.
"We'll know at the end of the year what we're doing with the project. I'm comfortable enough that we will be far enough ahead [by that time] that the memorandum of understanding won't be an issue," he said.
Even if the firm does not meet the deadline to demonstrate sources of funding, a list of investors and a financing plan, Brant does not see it as a huge setback.
"All the [memorandum of understanding] does is take away the exclusivity. I don't think anyone is standing in line [to obtain the property]," he said.
In fact, no one would like to see the project succeed more than Mahone and other members of the county's Airport Authority.
The complex has the potential to be a major tourist attraction. Brant hopes to bring hugely popular NASCAR racing to the facility as well as other forms of racing. He also is planning to hold at least 200 other events at the complex each year, including boat shows, wrestling matches, conventions, aircraft exhibitions, circuses and tractor pulls.
But Mahone said that at some point the authority must get on with the business of marketing the property. Development of county-owned land at the airport is a priority for the authority and county Chief Executive Jim Roddey.
Asked how confident he was that Brant would secure financing, Mahone replied, "It's a major business transaction. It has many parts. As long as those parts coalesce by Dec. 31, I think it's a deal. It's anybody's guess whether all the pieces would come together in a way that would give Brant or the authority the comfort to move forward.
"This isn't a lemonade stand. This is a pretty big deal. It's a major undertaking. It's not something to be entered into unless there's a definite likelihood that the project would be completed. You don't want to start with half the gas."
Mahone also questioned the availability of loans for such a major undertaking in today's market.
Banking analyst Arnold Danielson, chairman of Danielson and Associates of Rockville, Md., said Brant's bigger challenge may be in convincing financial institutions of the viability of an indoor racing complex.
They may be skeptical of an indoor track, particularly since there is no comparison available from which to draw attendance and revenue projections.
"They're sort of breaking new ground when they're talking about an indoor track. Typically, NASCAR runs outside in bleachered stadiums," he said.
Danielson said some lenders also may be hesitant to invest in entertainment-related businesses, particularly given the bankruptcy of theater chains like Loews.
He said loans themselves are not hard to get in the current economic environment. In fact, "if something sounds good, [lenders] are tripping over themselves" to fund it, he said.
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