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News & Analysis
Jason Fiorito has set in motion his vision for Pacific Raceways at Kent, Wash., to become an "automotive and design technology campus" with global reach. And his first act is to offer his family's 320-acre multiuse property for sale.
For years, the facility (even when it was known as Seattle International Raceway) had tried unsuccessfully to acquire permits for various projects. But Fiorito has developed a plan – the project is called Pacific Innovation Center (PIC) - that earned more than just King County legislative approval. This April it received the Washington State Department of Commerce's designation as a “Project of Statewide Significance” (PSS). Only two other projects in state history have been so classified: Boeing's 777 composite-wing project at Everett (north of Seattle) and BMW's composite body manufacturing plant at Moses Lake (in Central Washington).
The proposed automotive-based tech campus seeks to use the 2.25-mile road course as a testing ground. The idea is to forge partnerships with various research facilities, corporate entities, and nearby cities to attract global leaders in the renewable-energy-vehicle industry.
While Fiorito has won the legislative battles, he has lost the racing-management war. Offering for sale the property that houses a road track, drag strip, motocross track, karting facility, and a reported 22,500 permanent seats is his concession that "after 54 years of ownership, we recognize that we have taken the project as far as we could."
Fiorito said, "We have worked tirelessly with King County to set the stage for the next phase of redevelopment that includes the commercial development of property surrounding the racing and testing facilities. The development of projects of this size and scope require a level of resources that the family simply does not have.
“After exploring options that would have allowed continued ownership interest, we centered on the route that would provide our customers and the region with what they deserve, a first-class racing operation paired with a job creating tech campus attracting global leaders in the automotive innovation industry."
Handling sale negotiations are CBRE, a Fortune 500-listed commercial real estate services and investment firm headquartered at Los Angeles, and Corporate Financial Associates, a Laguna Hills, California-located investment banking firm that specializes in serving middle-market companies. One of CBRE's corporate-responsibility focuses on is environmental sustainability, a fitting blend with this ambitious Pacific Raceways project.
“PIC will create hundreds of clean-tech jobs and produce accelerated automotive innovation, while establishing Washington State as the international hub in this arena," Fiorito said.
The development calls for 1.2 million square feet of commercial space for technology-based and racing-related industry.
While all that trumpets prosperity for the Pacific Northwest and forward-thinking evolution for a racetrack facility that continually has fallen woefully short of its potential, the big question for drag racing is how this latest business move will affect the National Hot Rod Association and its annual Northwest Nationals that in August celebrated its 27th visit to Pacific Raceways.
This less-than-blue-chip facility has in recent years been one of the most maligned on the Mello Yello Drag Racing Series circuit, despite its rich history of successful events and as a showcase for some of the sport's biggest names (including Jerry Ruth, Gary Beck, Ed "The Ace" McCulloch, Herm Petersen, Rob Bruins, and Gaines Markley).
But the NHRA has tolerated the sometimes-shabby-but-improving conditions for years because of its strategic geography – and the sanctioning body's gleeful boast, at least in private, that neither NASCAR nor IndyCar has a presence in the Pacific Northwest. (NASCAR’s Touring Divison has long has a presence throughout the state and region, and the defunct open-wheel CART/ChampCar Series used to race at Portland, Ore., and Vancouver, British Columbia.)
NHRA President Tom Compton, Executive Vice-President Peter Clifford, and Senior Vice-President of Racing Operations Graham Light were aware of Fiorito's plans, NHRA spokesman Geno Effler said Tuesday, Sept. 30. With the public announcement, their collective position is one of encouragement and certainly of hope that NHRA drag racing will continue on the site.
"We're still hopeful that we'll keep that event on our schedule. The Northwest is a great market. Of the major motorsports series, we're the only one that races in the Northwest. If it’s not the most picturesque track on the NHRA Mello Yello Series, it certainly is one of the top three. And we'd love to see that facility bought by somebody who wants to keep the strip open," Effler, NHRA senior vice-president of public relations and communications, said.
However, it's unclear right now how soon CBRE and CFA will receive serious bids on the property – especially considering neither the Fiorito family nor its financial proxies has placed a market value on the suburban property southeast of Seattle.
"We have contracted with CBRE and CFA (Corporate Finance Associates) to market the opportunity to a local, national, and international list of prospects," Fiorito said. "We are looking for the right buyer that will come in, take over, and realize the vision held by three generations of my family. We are interested in working with the new buyer(s), if they so desire, to provide management and consulting services to help with the transition and continued operation.
"The property is being offered without a list price. We will entertain any offer and envision discussions and, ultimately, negotiations that establish a market price," he said.
Fiorito skirted the question of whether the racetrack is a viable business operation, saying, "It is no secret that operating the racing business has been taxing on my family’s resources. We have fed the operation for 12-plus years now. Early on, it became apparent that developing the commercial real estate would be necessary to ensure long-term viability.
"It took over a decade to craft and have passed legislation at King County that entitled the property’s ability to move forward. Now that the legislation is passed and the State of Washington has designated our project as one of 'Project of Statewide Significance,' the financial outlook for the property is extremely favorable. As stated before, it just takes a level of financial resources to develop that we simply don’t have."
Although that sounds like a "No," Fiorito spoke in terms of a racing presence as the property is developed and indicated that housing, whether single- or multi-family units, is not on the radar screen. He said housing property would not bring the new owner a decent return on his/its investment. He referred to "a world-class racing facility," but in keeping with his family's partiality to road racing. That's not necessarily a guarantee for NHRA drag racing. It's not a death knell for drag racing, either, but it wasn't exactly a resounding reassurance.
What he said was this: "We are very confident that the upgrades and improvements will greatly accelerate with new ownership. One of the main reasons for the sale is the realization that we just don’t have the resources to redevelop the property quickly enough. We believe it is our responsibility to pass the torch to someone that does. Everyone who has supported my family, and the project, deserves us doing whatever it takes to make good on our promises to provide the region with a world-class racing facility capable of re-attracting professional road racing and the job-creating, innovation-accelerating tech campus planned for the surrounding property."
Professional road racing seems to be uppermost on his racing agenda. As for the possibility of housing units on the site, Fiorito said, "The property is zoned 'Industrial' and has legislation that will allow the commercial development of a certain portion of the race track surrounding real estate. Reverting the property back to residential would generally be considered a down-zone and wouldn't realize the return on investment. Economics dictate that the continued operation of the racing business in partnership with developing the commercial real estate is the highest and best use of the property."
Effler said Fiorito did not specify or imply whether the sale of the property is contingent upon racing continuing there. In other words, Fiorito has not indicated that a sale is dependent on the purchaser’s desire to maintain the property’s long history of drag racing or any kind of racing.
"He has not indicated that to us. I don’t know if he has indicated that or will indicate that to anybody he's selling the property to," Effler said. "The event is on our schedule for 2015, for August. I don't know the ramifications if it’s sold before then, if the new buyer still has an obligation to fulfill that contract." (He said the NHRA doesn’t reveal terms and lengths of agreements with its affiliated racetracks.)
Fiorito filled in Effler, who's new this year to the NHRA, about his plans. And Effler said the campus Fiorito envisioned included "electric-vehicle technology development, maybe even solar power, all kinds of other things that would be based there, given the high-tech industry that's already in Seattle. He saw it as all being automotive-related, because it would complement the drag strip and the road course and the karting facility. The way he explained it was it would all complement one another."
It's unknown whether a new property owner would be simply a landlord to tech-related companies that would anchor the campus or would be one of the partner firms in this venture. So it’s unknown how the new owner might regard the drag strip or any of the other motorsports operations on the site.
The sudden availability of the property might trigger renewed interest from NASCAR, which had tried and failed with the Washington State Legislature at least twice in the past couple of years to establish a Northwest presence to help facilitate a possible Pacific Rim initiative. (Effler said the NHRA has no Pacific Rim aspirations: "not at the present time, no.")
Perhaps the International Hot Rod Association, which expanded its schedule for next season to include a stop at Spokane, five to six hours away from Seattle, might have an interest. The IHRA's parent company, IRG Sports + Entertainment, owns racing complexes at Jupiter, Fla., Memphis, and Tucson. Moreover, Chris McMahan, newly named corporate director of track development, briefly was Fiorito's general manager at Pacific Raceways.
Effler said the NHRA's stance is to "wish the Fiorito family the best and we hope that the track remains a part of the property's future, with the future buyer. We just have to move forward in the meantime with the assumption that next year's event will take place. We'll just have to wait and see what the new owner has to say. There's no guarantee with real estate that you're going to be selling it next week. Just because you want to sell it doesn’t mean you’re going to sell it right away."
Effler said "myriad options" could be in play as the sale unfolds and the leasing or renting process with companies who want to locate on campus develops. So the NHRA, like its fans, will have to wait and see.
To dwell on the minimum-standard vibe Pacific Raceways has come to project would be beating a dead horse. That no longer matters. What matters today is what Fiorito, for whatever reason, fairly or unfairly, fell short of accomplishing: helping the facility his family has owned since the late 1950s to realize its full potential.
The positive news is that he might not have paved the Pacific Raceways track, but at least he stepped aside and paved the way for a brighter future for racing – one that hundreds of thousands of people hope includes drag racing – in the Pacific Northwest.