Tooele County Commissioners have signed a management agreement with Utah Motorsports Campus to operate the former Miller Motorsports Park for one year.
Utah Motorsports Campus is an affiliate of Mitime Utah. Mitime Utah is the corporation, owned by Chinese businessman Li Shufu, whose contract to purchase Miller Motorsports Park was voided by 3rd District Court Judge Robert Adkins in December.
The commissioners turned to Utah Motorsports Campus because they needed a company that could immediately step in and run the facility for the 2016 racing season.
“We couldn’t afford to let the track sit idle for a season while we go through the process of preparing for another sale and taking new bids,” said Tooele County Commissioner Shawn Milne. “The motorsports park is economically important to the county in terms of taxes and jobs for residents. Letting the racetrack sit idle for a season would also negatively affect the value of the property.”
The language of the one-year agreement specifies that it is not a partnership or a lease. The agreement does not confer upon Utah Motorsports Campus any rights, privileges, or preferences in the future sale of the property, Milne said.
While other organizations may have been able to manage the track with sufficient time and preparation, only one company was immediately prepared to manage the racetrack for the county, according to Milne.
“Utah Motorsports Campus, in anticipation of the pending sale, had already hired staff and booked events for 70 percent of the 2016 season,” he said.
The county had to act quickly to secure a management company before tenants and racing organizations took their business to other venues, according to Milne.
Either party, with 60 days notice, can terminate the management agreement and it automatically terminates upon the sale of the property.
The agreement calls for the county to receive all profit or assume liability for operating losses when the agreement is terminated.
Utah Motorsports Campus will receive 1 percent of the gross cash receipts as a management fee when the agreement is terminated.
Utah Motorsports Campus must operate the facility according to a budget approved by the county commission. All procurement for the racetrack must follow county purchasing procedures, according to the agreement.
Utah Motorsports Campus has already spent $500,000 preparing to open the track. The company also anticipates making a $2 million investment in assets needed to operate the track, according to Alan Wilson, Utah Motorsports Campus president.
“Miller took everything with them when they left,” he said. “I mean furniture, kitchen equipment, even the toilet paper.”
That’s $2 million that the county won’t have to spend right now if it were trying to manage the track, according to Milne.
“The agreement allows the racetrack to continue to operate without the use of taxpayer dollars,” he said.
The county and Utah Motorsports Campus entered into the agreement the day after 3rd District Court Judge Robert Adkins filed his written judgment in a lawsuit filed by Center Point Management.
In the lawsuit, Center Point contested that the county’s acceptance of Mitime’s $20 million offer to purchase the racetrack, instead of Center Point’s $22.5 million offer, was a violation of state law and county ordinance.
The judge issued an oral judgment from the bench on Dec. 17, 2015, that set aside the sale.
In his written judgment, filed on Jan. 6, Adkins affirmed that the county could not sell the motorsports park to Mitime under the current contract because it was for less than the facility’s fair market value.
While Adkins did not set a fair market value for the track in his judgment, he did not find the $9 million value established by an independent third party certified appraiser to be credible, according to Tooele County Attorney Scott Broadhead.
The county has the motorsports park on its tax rolls at $28.1 million. However, the park was due for reassessment in 2016.
To complete the sale in compliance with Adkins’ judgment, the county must find a satisfactory way to assess the value of the motorsports park, Broadhead said.
The process of finding new appraisers, conducting the appraisals, advertising the sale, and conducting required public hearings may take several months while the racing season starts in March, according to Milne.
The county has asked the state Office of the Property Rights Ombudsman to assist the county in choosing qualified and impartial appraisers, according to Broadhead.
While Adkins implied that the county must accept the highest offer for the track, that specific question was not before the judge, according to Broadhead.
“We believe the law to be that as long as you sell for at least the fair market value, and that value is present value rather than future value, then the local government can sell to any party and can consider future benefits, plans for the property, et cetera,” Broadhead said.
“We have notified both Mitime and Center Point that we will entertain offers after we have completed further evaluations of the value of the property,” he added.