Aug. 26. By Dave Yochum. While the principal investor in Michael Waltrip Raceworld is saying the best use for the property at Liverpool and Chartwell Center Drive is a housing development—not a race shop—some town officials think otherwise. For all intents and purposes, he said the property is a tear-down.
“I believe the highest and best use for this property is for it to continue as commercial use. Cornelius must continue our efforts to achieve a better balance between commercial and residential,” said Mayor Pro Tem Woody Washam.
At a press conference after the NASCAR race in Bristol, Tenn., Rob Kauffman, the centi-millionaire—possibly a billionaire—who has backed MWR since 2007, said the enterprise has not been commercially viable for some period of time. He said he was “voting with his wallet” and investing instead in Chip Ganassi Racing in Concord.
With 230 employees MWR is a mainstay of the local economy and a tourism attraction as well. Of course tearing down the buildings and shops and replacing them with housing means more people racing their engines in stop and go traffic on I-77.
At the Bristol press conference Kauffman said MWR’s equipment will be sold after this season. The shop’s “best use” is as a housing development, not a race shop, he said.
Town Commissioner Dave Gilroy said “no housing” when asked. Commissioner Jim Duke said the Waltrip property is a commercial setting and should remain so. “Finding the right fit and bringing a new business into Cornelius is both important and urgent,” Duke said.
Washam said jobs are important to the town. “This is a very convenient and attractive commercial property which should continue to be a great asset for our town.” The best ratables in any town come from commercial enterprises. For one thing the structures can be enormously expensive. For another, they do not require the same level of municipal services that homes and apartments do.
Kauffman, who made his money in high finance, rents a home in The Peninsula. He is a vintage car enthusiast and chairs the Race Team Alliance, which is looking at ways to improve profitability in the world of racing. At one time Forbes magazine pegged his wealth at $1.8 billion.
But Kauffman addressed MWR employees Aug. 4 and let them know their future was less than certain. He invested on the order of $50 million in Michael Waltrip Raceworld during tough times in 2007.
NASCAR is looking at a different way to build long-term value in the teams that run deep. Franchises and licenses—comparable in some ways to a tax medallion in New York City—have been discussed. Kauffman has played a major role in the discussions as head of a coalition of race team owners.
Given the massive cost of mounting serious race teams, consolidation is inevitable. With buildings, equipment and massive duplication from shop to shop, the value of the enterprise is in sponsor contracts. If those deals are shaky, there’s a lot at stake, from morale to cash flow.
“Every one knows the teams are under quite a bit of pressure. … On the business side, it is very difficult for the teams to maintain a sensible business model,” Kauffman said.
