After listening to people praise the deal, Tooele County commissioners voted unanimously to approve a final sale agreement that will put Miller Motorsports Park in the hands of a corporation owned by a Chinese business.
The county commissioners held a public hearing on the sale of MMP during a meeting Tuesday night at the Tooele County Building.
The only item on the agenda was consideration of the sale agreement with Mitime Utah Investment, LLC for “the property known as the Miller Motorsports Park.”
“For us, it has been a whirlwind of research and time spent to come to this point where we have the opportunity to approve this purchase and sale agreement,” said Tooele County Commission Chairman Wade Bitner. “We are delighted to be able to maintain this premier facility.”
The county commissioners signed a memorandum of understanding with Mitime in August. The memorandum was an initial agreement to accept Mitime’s purchase proposal.
Following the memorandum signing, both parties completed their due diligence and negotiated terms of the final sales agreement, according to Tooele County Attorney Scott Broadhead.
The sales agreement calls for Mitime to pay the county $20 million for title to the land, buildings and other facilities soon to be formerly known as Miller Motorsports Park. The transaction is expected to close on Dec. 31.
Following closing, Mitime officials have said they will rename and rebrand the property as Utah Motorsports Campus.
Mitime Utah Investment is a Utah corporation. It was organized by Mitime Investment and Development Group, which is wholly owned by Li Shufu, a Chinese industrialist with a reported net worth of over $2 billion.
Although the county commission approved the sale agreement, the transaction is clouded by a lawsuit filed by a rejected purchaser.
Center Point Management, a Wyoming limited liability corporation led by Las Vegas real estate developer Andrew Cartwright, submitted a bid to purchase MMP for $22.5 million.
County commissioners rejected Center Point’s offer, claiming the Mitime proposal had better long-term advantages in terms of jobs, taxes, and economic development opportunities.
Center Point claimed in its lawsuit that the county violated local and state laws by considering uncertain and future benefits of the Mitime proposal. The complaint asks the 3rd District Court to either stop the sale or invalidate the sale if it is completed before the court rules.
The purchase agreement approved by the county commission Tuesday night includes a provision that will allow Mitime to lease the facility in the event the closing of the sale is delayed by the lawsuit, according to Broadhead.
The lease agreement with Mitime would be similar to the lease agreement the county had with the Larry H. Miller Group, he said.
Broadhead also said the purchase agreement contains language that gives the county the right to purchase the property back from Mitime if Mitime decides in the future to sell the property.
Before the public hearing started, the county commissioners asked Alan Wilson, vice president of Mitime Utah, to explain Mitime’s plan for the property.
Commissioners also heard a report from an independent appraiser and an analysis of present economic benefits of current track operations to the county.
Wilson said Mitime plans to continue MMP’s current operations. “We already have 38 races committed for 2016,” he said.
The Ford Performance Driving School has renewed its agreement to stay at the facility, according to Wilson. Other existing tenants and businesses have also been invited to stay, he said.
Mitime’s plans for MMP include an immediate investment of at least $6 million to bring the aging facility back up to world-class standards, Wilson said.
Mitime also plans to build a hotel, a racing oval, a Rally X course, and develop a tourism base for Chinese tourists.
Nathan Herrscher, a certified appraiser with the Midvale-based appraisal firm J. Philip Cook, presented results of an appraisal of MMP. The report was prepared at the request of Tooele County.
Herrscher placed a value of $9 million on MMP, in part by using the sales price of six other racetracks across the country.
The two racetrack sales that were the most comparable to the Miller property were Pikes Peak Raceway in Fountain, Colorado and Road Atlanta in Braselton, Georgia.
Pikes Peak sold for $9 million while Road Atlanta sold for $8 million, Herrscher said.
Herrscher said the cost to build MMP could not be used to determine the track’s value because the track was “overbuilt.”
Likewise, Herrscher said he did not consider the ability of MMP to make money in the appraisal process because the track has a record of losing money.
Benjamin Baker, a Zions Bank Public Finance representative, presented analysis findings on the present economic benefits of Mitime’s proposal.
Present benefits were measured by expected increases in property tax, employment gains, and events that lead to increased sales tax through tourism over a 15-year period.
The Zions Bank study found a present benefit of $3 million to the county from the Mitime proposal over the 15-year period.
The $3 million included $900,000 in additional property tax revenue as the result of Mitime’s investment in upgrading the current facility, $1.1 million in sales tax revenue from maintaining the current race schedule at the track, $750,000 in property tax and sale tax by keeping the approximate 145 people that are employed in racetrack-related jobs, and $130,000 in retained revenue from hotel and motel taxes.
The Zions Bank study does not anticipate an increase in property tax from the Center Point proposal because the Center Point proposal does not include any committed, near-term property improvements, according to the study.
The study also assumes that if the Mitime proposal is not accepted, races would cease and sales tax revenue from races would not be generated.
The Zions Bank study assumes there would be a loss of jobs related to track operations if the Center Point proposal is accepted. The study attributes its assumption to “officials involved in the purchase negotiations” that the Center Point proposal calls for the curtailment of full track operations.
Following the presentations, 13 people from the audience spoke during the public hearing. All were in favor of the Mitime proposal.
“I personally support the Mitime agreement. I think it has the long-term benefit and long-term stability,” Dave Kizarian, an Erda resident and principal in the National Auto Sport Association Utah Region, a Miller Motorsports Park tenant.
Former Tooele County Commissioner Lois McArthur said she favors the Mitime proposal because of the tourism aspect.
“One of the problems we have had in the county is developing a tourism destination,” she said. “I would really like to see Miller Motorsports Park go to this company that can enlarge it for the tourism part.”
Rob Lintz doesn’t live in Tooele County, but he has been coming to Miller Motorsports Park since it opened.
“It’s a wonderful facility,” he said. “I was really dismayed when I heard the track might close and go away or that it might become something other than a racetrack or a private facility. The Mitime proposal sounds wonderful. I applaud you for considering what might be the lower offer, but looking long-term vision-wise.”
After the public hearing closed, the county commission voted unanimously to approve the sale agreement with Mitime.
“Whether we recognize it or not, we are part of a global economy,” Bitner said.
Rejected bidder defends his proposal
The man behind the rejected offer to buy Miller Motorsports Park is defending his lawsuit against Tooele County and Mitime.
Andrew Cartwright said his proposal has been misrepresented. He believes his offer not only puts more cash in the county’s hand up front, but that in the long term it is the best deal for the county.
“I’m suing so I can pay more money for the track,” Cartwright said. “Because I know it’s a better deal.”
After the May 8 surprise announcement that the Larry H. Miller Group would not renew its lease for Miller Motorsports Park, two offers to purchase MMP quickly emerged as the top contenders, according to Tooele County Attorney Scott Broadhead.
Mitime Investment and Development, a company owned by a Chinese businessman but represented by Alan Wilson, the designer and original general manager of MMP, offered $20 million.
Andrew Cartwright’s Center Point Management initially offered $18.7 million but then bumped its offer up to $22.5 million before the deadline for offers.
All the other offers were for $6 million or less, or were asking for a lease agreement, Broadhead said.
The commissioners weren’t interested in another lease; they wanted to sell the facility, he said.
Cartwright sat in the audience of Tuesday night’s public hearing and special Tooele County commission meeting that ended with an approved final agreement to sell MMP to Mitime.
Cartwright sat, silent, the entire evening. He didn’t speak, he didn’t applaud, and he never smiled.
Wednesday afternoon, he talked to the Transcript Bulletin.
He said he listened as Broadhead, at the request of the county commission, opened the meeting by recounting the timetable and process that led to the commissioners selecting the lower Mitime offer over Center Point’s top bid.
Broadhead explained Center Point’s proposal to the public as a country club with a racetrack in the middle instead of a golf course.
His proposal was described during the meeting as shutting down the track or turning it into a private venue.
“Yes, I think my proposal was mischaracterized,” Cartwright said. “Just like Mitime’s proposal, my proposal stated that my plans were to keep the track running like it currently is, the same race schedule, the same tenants, the same vendors. Nothing changes.”
Cartwright said he didn’t speak up at the meeting, not only because of the current litigation, but also because he realized he was in a room full of people that didn’t want to hear what he wanted to say.
“Yeah, they beat up on me pretty good,” he said. “They thought I wanted to close the track or take it away from them, but that’s not what I proposed.”
Cartwright said his plan was to invest $150 million in new construction.
The proposal was to build offices, restaurants, condos, high-end homes away from the track, and a light manufacturing facility, according to Cartwright.
Cartwright said he planned to build four condo hotels or “condotels.”
He described a condotel as looking like an upscale hotel, but the rooms are condos. People buy a condo, stay in it when they come to a race and the hotel rents them out the rest of the time.
The homes would be large luxury homes.
“There’s some people that race that have a lot of money, and they like the idea of having a second home on the track property,” Cartwright said. “They would have a garage to park their car in and when they aren’t at the track. They could rent the house out if they want, too.”
As far as residences not being compatible with a racetrack, he said it works at other places.
He points to Spring Mountain Motor Resort 55 miles west of downtown Las Vegas. The facility has six miles of racetrack with condominiums and private garages.
When it comes to exclusivity, Cartwright said attracting higher-end patrons doesn’t mean MMP has to turn into an exclusive members-only club.
“I think we could have both the current users and the condos and homes,” he said.
The condotels and a few new restaurants will solve one of the biggest problems the Miller facility has with attracting people, according to Cartwright.
“You don’t have a lot of motel beds in Tooele,” he said. “They fill up fast and then people can’t stay in the county. The condotels will give people a place to stay, and then they need places to eat.”
The condotels and restaurants would help the county collect more sales tax. The condos and homes would also increase the tax base, as they would be taxed at 100 percent of their value because they are second homes, according to Cartwright.
“They didn’t consider that when they were looking at economic benefit,” he said.
Cartwright isn’t giving up his lawsuit, despite the last public speaker at the meeting that called on him to do so.
“It sounds funny, but I’m going to sue so I can pay more to buy the racetrack,” he said. “I just think my proposal is better for the people of Tooele, and I don’t think the people ever really got to consider my proposal.”
Center Point’s lawsuit claims the county violated local and state laws by considering uncertain and future benefits of the Mitime proposal. The complaint asks the 3rd District Court to either stop the sale or invalidate the sale if it is completed before the court rules.