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Laguna Seca management solution back in chaos


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#1
Johnny D

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Thursday, 22 December 2016
Marshall Pruett

 

The lingering saga involving Monterey County's quest to find a new management solution for Mazda Raceway Laguna Seca will limp into the New Year without a resolution.

 

Despite choosing the non-profit Friends of Laguna Seca group in October from a list of three candidates to take over the running and restoration of the aging road course, a contract to finalize the relationship between FLS and the county's board of supervisors has not been forthcoming.

 

According to the Monterey Herald, "exiting Supervisor Dave Potter said exclusive negotiations with the Friends of Laguna Seca organization have dragged on so long that county staff has begun discussions with the other two bidder groups."

 

Potter, who has spearheaded the efforts to replace the Sports Car Racing Association of the Monterey Peninsula (SCRAMP), the track's one and only management firm since the facility opened in 1957, is scheduled to conclude his term on the board early next month.

His replacement, Mary Adams, will inherit an embarrassing mess.

 

The first search to find a SCRAMP alternative was conducted by the board in 2015 without the knowledge of its track managers. It triggered an ugly, public spat. The board's outreach focused on NASCAR's International Speedway Corporation (ISC) as a potential replacement for SCRAMP, but ISC declined the offer.

 

Unsatisfied by the outcome, the board made a public call earlier this year to request proposals from parties interested in running the legendary road course. FLS, a joint partnership between SCRAMP and ISC, and the World Automotive Championship of California group made it through to the final stage. By mid-October, FLS was selected as the board's new management provider for county-owned property.

 

The only obstacle left to clear was a management contract with FLS which, as Potter concedes, has "taken longer than [they] should and the next season is coming up fast." He also stated "all options are on the table."

 

With 2017 almost here, the fiasco set in motion by Monterey County's board of supervisors is about to enter its third year without a long-term solution in place. On the surface, it would appear the search for Mazda Raceway Laguna Seca's next custodian has made a long and winding loop only to arrive back where it began in 2015.

 

http://www.racer.com...k-to-square-one

(Some comments below the article too)


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#2
SpeedyPete

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Not to keen to everything but did hear it's been a mess for management. Was lucky enough to drive Laguna Seca last weekend and hope they get things sorted out.



#3
Johnny D

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INDUSTRY: SCRAMP set for two-year Laguna deal

Tuesday, 10 January 2017
Marshall Pruett

 

Monterey County's board of supervisors is preparing to extend a two-year management contract to the Sports Car Racing Association of the Monterey Peninsula (SCRAMP) to run Laguna Seca.

 

"We need to get some short-term management in there because the season is coming up," county supervisor Simon Salinas told the Monterey Herald. The Herald report, which stated the International Speedway Corporation (ISC) would also be included in the agreement, is said to be inaccurate.

 

This decision comes after two years of embarrassing failures by the board to replace SCRAMP as the one and only manager of the legendary facility since it opened in 1957.

 

The circuitous route pursued by the board, led by supervisor Dave Potter (who vacated his position this week), began in 2015 with the surprise revelation that replacements were being sought to remove SCRAMP by the end of the year. ISC, part of NASCAR's empire, emerged as the leading candidate to take the reins from SCRAMP, but the track management company ultimately declined the opportunity presented by the board.

 

Undeterred by its inability to sever ties with SCRAMP, Potter and the board cast a wider net early in 2016 and narrowed the interested parties down to a powerful group of local business leaders united under the "Friends of Laguna Seca" (FLS) banner, a team led by Long Beach Grand Prix founder/promoter Chris Pook named "World Automotive Championship of California," and the unexpected combination of SCRAMP and ISC.

 

After completing a thorough management and financial forecast document submission process, a series of team-by-team interviews, and final review of the offerings from all three, the FLS was announced by the board in October as its chosen party to take over management responsibilities (and lead a facility-wide upgrade).

 

The last step in the process – coming to terms with the FLS with a new, long-term management contract for 2017 that would end SCRAMP's tenure, was expected to be completed during the remainder of 2016, but that also failed to happen and has led to re-engaging with SCRAMP.

 

With 2017 having arrived without a new management contract in place with the FLS, and the obvious need to have a proven management solution in place to run the major events on the calendar, the county will look to have SCRAMP sign a new agreement to oversee Laguna Seca through the end of 2018.

 

Of the three groups, FLS stood out as the team with the largest assembly of wealthy and motivated supporters with an interest in making significant investments into the aging Laguna Seca property. Beyond the managerial infrastructure FLS has to offer, the big infusion of cash promised by the team continues to hold considerable interest for the board.

 

"This will allow more time to seek a longer-term agreement with (an entity that) has adequate resources," supervisor Salinas said of the desired use of SCRAMP/ISC as a stop-gap solution.

Another local periodical, the Monterey County Weekly, suggests the board may have been led astray by its fixation on the big dollars promised by some of its bidders.

 

"Turns out, none of the groups who submitted proposals are impressive," it wrote. "After a special meeting on Dec. 22, now-former supervisor Dave Potter broke it down: Friends of Laguna Seca, a local nonprofit, didn't have the $10 million in start-up capital it claimed; they had $10 million in pledges. The World Automotive Championship of California's proposal was based on $20 million in start-up capital. But that money would've come in the form of a loan – a loan the county would be on the hook for if WACC were to fold. Finally, there was a joint proposal by the International Speedway Company and SCRAMP, but ISC wasn't interested in spending $10-20 million for needed repairs."

 

That account would, from the outside, appear to explain how the board has been left with a single credible and ready management solution to engage at this moment. Despite the awkward circumstances it has endured, SCRAMP will move forward with the board to create a short-term contract to continue managing Laguna Seca.

 

http://www.racer.com...ear-laguna-deal


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#4
Johnny D

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http://www.racer.com...management-deal

 

SCRAMP awarded new Mazda Raceway deal

 

Three years of twists and turns in the search for a new track management solution at Laguna Seca have resulted in a return to its first and only management team.

 

Monterey County's board of supervisors, which controls the land that contains the sprawling park and its renowned 2.2-mile road course, has ceased its efforts to replace the non-profit Sports Car Racing Association of the Monterey Peninsula (SCRAMP) organization.

 

With the conclusion of that search, the county has entered into a three-year agreement with SCRAMP. SCRAMP's tenure overseeing Laguna Seca, which began in 1957, will continue through at least 2019.

 

The heart of the new contract, which involves a role reversal in financial responsibility between SCRAMP and the county, was made possible through a complete rethink by both parties on how to move forward in a new and positive manner.

 

"We have been working very closely with county staff over the past several months to develop a plan that builds upon this iconic facility's heritage of delivering significant economic impact to the Central Coast," said SCRAMP president Michael Smith.

 

"We will celebrate this heritage throughout the year with 60th anniversary celebrations, culminating in a Racing Through the Decades feature at the Rolex Monterey Motorsports Reunion in August."

 

The path to a reenergized relationship between SCRAMP and the county involved years of pressure and discomfort.

 

Led by former supervisor Dave Potter, an unsuccessful attempt to server ties with SCRAMP and partner with the NASCAR-affiliated International Speedway Corporation (ISC) was brought to light in 2015. In 2016, a renewed effort to replace SCRAMP led to the formation and emergence of two new management options, the Friends of Laguna Seca (FLS) and the World Automobile Championship of California (WACC), where the county placed expectations for its next managers to independently fund long-overdue property-wide upgrades.

 

SCRAMP, which aligned itself with ISC, also submitted a proposal to earn a new management contract, but the FLS, created by a powerful group of locals which promised to spend tens of millions to improve the ageing facility, was ultimately chosen by the board in October.

 

The management change process came to a head when the board and FLS failed to come to terms. From comments made by the board, it was learned the FLS group had assembled the equivalent of investment promises from its numerous backers, rather than the physical possession of tens of millions of dollars the county expected to have lavished upon Laguna Seca.

 

Without that big infusion of external cash, the county was unable to reach a concession agreement with FLS, which left the property without a management team as 2017 approached.

After reopening its search when the FLS opportunity fell through, and with Potter's time on the board coming to an end, his replacement, supervisor Mary Adams, turned a new page and reengaged with SCRAMP.

 

"I think this is good," she told the Monterey Herald. "This clears things up. But it seems like a lot of time and resources were spent to reach this point."

 

Smith, quoted in the same Herald story, spoke to a more positive relationship with the county after replacing its month-to-month contract under Potter's reign to the new three-year deal spearheaded by Adams.

 

"There's a different atmosphere now," he said. "This is the most enthused myself and the (SCRAMP) board of governors and staff have been in a long, long time. It's a good win-win for everyone."

 

Under Potter's previous plan, Laguna Seca's viability hinged upon the next facility manager doubling as an angel investor willing to sink tens of millions into a property it did not own. That plan, which relied upon charity rather than a solid long-term business structure, was immediately abandoned by his successor.

 

From the work recently carried out by Adams and Smith and their respective teams, the new agreement shifts the long-held expectations for SCRAMP to generate all of the income, pay for operating costs and track upgrades, and deliver a meaningful profit to the county at the end of each year over to the board.

 

With Adams and Smith focused on untangling more than a decade of messy financial agreements that left both parties frustrated and underwhelmed, the formation of a new agreement began with a top-to-bottom review of all income sources and expenses - some that had nothing to do with SCRAMP - to create an accurate budget forecast.

 

That review, hailed by insiders as a revealing and helpful exercise, determined the best solution would be to place the county in charge of the income and concessions taken in by Laguna Seca. SCRAMP, which was more than pleased to shift that responsibility to the board, will be paid a straight management fee for its services. By completing a joint and thorough financial review, and streamlining and simplifying their roles, an initial surplus of up to $3 million per year is expected to be generated, with some of those profits going directly into improving the facility.

 

The fresh contract, financial approach and revised responsibilities between the SCRAMP and the county should usher in a new era for one of North America's most beloved motor racing circuits. The peaceful and progressive resumption of the relationship between both sides should also ease the awkward tensions that have cast a shadow over the track's future.

 

And while the new agreement does not solve every problem faced by Laguna Seca, the spirit demonstrated by the county and SCRAMP would suggest a collaborative approach to other challenges is possible.

 

Looking to what's ahead in 2017, seven major racing events are planned from May 12-14 through Oct. 12-15, including appearances by IMSA, Pirelli World Challenge, Superbike World Championship, and numerous vintage racing weekends.


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#5
Rob Burgoon

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"By completing a joint and thorough financial review, and streamlining and simplifying their roles, an initial surplus of up to $3 million per year is expected to be generated, with some of those profits going directly into improving the facility."

 

 

 

I find that hard to believe.  What really changed?


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#6
Johnny D

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"By completing a joint and thorough financial review, and streamlining and simplifying their roles, an initial surplus of up to $3 million per year is expected to be generated, with some of those profits going directly into improving the facility."

 

 

 

I find that hard to believe.  What really changed?

 

Possibly the key words being "up to"

 

J~


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#7
Rob Burgoon

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Forecasting a surplus of $10 sounds wildly optimistic. Changing who does what doesn't sound like it would dig them out of the red. But maybe if the county handles the money they will loosen the sound limit...
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#8
Alberto

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Mike Smith is President now.  He's pretty sharp.  If anyone can get the financial house in order, it is him.


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