JUPITER, Fla. - Investors came up a few laps short on plans to turn Palm Beach International Raceway into the cornerstone of a racing entertainment group, but they appear to have their finances back on track at the west Jupiter landmark.
The four-course raceway, a fixture in northwest Palm Beach County for decades, has been overhauled in the past three years, but there have been some bumps along the road. The tracks are credited with drawing more than half a million people a year and having an $18 million annual impact, according to an economic study now a couple of years old . But since then, the raceway has been short of cash on a number of occasions.
Raceway owner Moroso Investment Partners is under a third extension on a May 2010 forbearance with its mortgage holders, according to court records, but managing partner Joseph Lubeck said the problems have been resolved. The last of the liens and suits filed by contractors who rebuilt the courses were cleared this summer, records show.
Three members of the management team were laid off in November when it became clear that a four- or six-venue racing empire was not imminent. Last year, the partners did add the Memphis Motorsports Park, a racing pavilion more than double the size of the Palm Beach raceway's 200 acres.
"We've written our checks to make sure this is not just a stable business, but a growing industry," Lubeck said.
Before CEO and President Jason Rittenberry arrived in 2010, the raceway seemed to be off course.
"We're moving forward as long as we're profitable on an event-by-event basis," Rittenberry said. "We've made it through the tough part."
The raceway has 18 full-time employees and as many as 300 part-time employees to handle events and regular use of the tracks. Nearly every day, someone is racing something there. With four tracks and extensive lighting, there are often several events happening simultaneously on Saturdays and Sundays. There have been almost 600 events this year, Rittenberry said.
Perhaps the track should do more advertising, said driver and frequent car sponsor Rick Costanza, owner of Rick's Rods of Riviera Beach. Some events don't pull as many spectators as he would expect, and Costanza said that may be because he hears of events the week they are happening.
"As for a racing facility, it's the best around," he said .
The raceway has used a billboard on Interstate 95 just past Blue Heron Boulevard to advertise its larger events for more than a year.
The new owners razed the grounds after buying Moroso Motorsports Park in April 2008. A protracted dispute with the contractors led to a number of liens against Moroso Investment Partners, the limited liability corporation that bought former Moroso Motorsports Park - 26 liens in 2008 and 2009.
One contractor, H&J Contracting, sued, got a settlement agreement with a time schedule for payments from Moroso, but ultimately had to get a judge's order in July before the last of the
$4.5 million contract was paid. None of the contractors contacted for this story returned calls.
Also, the track didn't pay sales taxes on time in 2010 and 2011, according to the state, which issued warrants for $92,000 in June 2011 and $33,500 in May 2010. Those were both taken care of within a couple of months.
Regardless of the steps taken to straighten out the financial situation, an outdoor venue is susceptible to weather, Rittenberry said. He said rain hurt gate receipts, and that led the raceway to miss sales tax payments.
The forbearance was not about an inability to pay the mortgage, Lubeck said. And indeed, a borrower can default in ways other than failing to pay. Having liens on the property could have triggered a default with Wachvoia and now Wells Fargo, as well as the second mortgage holder, Lion Financial LLC. Lubeck declined to give details, but said the partners paid part of the principal to extend the forbearance.
Initially, Susan Moroso Strecker was a consultant for the new ownership group, but the Moroso family is no longer involved, Lubeck said. Strecker did not return messages left at her Connecticut home.
The raceway estimates 12,000 hotel rooms are booked each year for its events, but most attendees are daily visitors, Lubeck said.
Testing, private demonstrations - Mercedes-Benz Canada brought Canadian journalists to town this month to see six AMG models - a driving club and other ventures bring in revenue. But the racing events are the money makers, Lubeck and Rittenberry said.
"I was just floored when we started working with them, how many events they are putting on," said Roger Amidon, head of the Tourist Development Council.
"This niche market of race car, high-performance cars is great for Palm Beach County because it hits a demographic we're trying to hit here - the affluent visitors who stay a few days," Amidon said.
When the investment group razed the tracks and started over, the new vision separated the drag strip and road course and added lights,