Milwaukee Mile circling the drain UPDATE #2 The Wisconsin State Fair Park Board has decided to cut ties with Milwaukee Mile Holdings LLC, the group that promotes and runs auto racing at the Milwaukee Mile.
"The Fair Park Board has made every effort at reasonable negotiations with Milwaukee Mile Holdings," said Susan Crane, chairwoman of the park board. "The board felt the time had arrived to take decisive action to ensure there is racing at The Mile this summer."
Waiting in the wings is Wisconsin Motorsports LLC, a new group led by Claude Napier, currently the president and CEO of the Milwaukee Mile. Napier said Thursday that he was very close to a new agreement with the fair that will keep racing going at the historic racetrack.
Napier added that this year's slate of races at the track, including IndyCar and NASCAR, will be held as scheduled. Napier said he was also working to add more events at the track.
Napier did not disclose who would be in his ownership group.
In a prepared statement, State Fair officials said they expected a "seamless transition because the new promoter has significant experience managing day-to-day track operations and race events such as the IndyCar series, and NASCAR's Truck Series and Nationwide Series."
Fair officials said Napier will guarantee that tickets already purchased by race fans for events this season will be honored. JSOnline.com02/12/09 The current president and CEO of the Milwaukee Mile is trying to form a new ownership group to take over racing at the Milwaukee Mile from Milwaukee Mile Holdings LCC, the current promoter.
Claude Napier made a presentation on Monday to members of the Wisconsin State Fair Park Board, meeting in executive session. Napier declined to comment afterward. Sue Crane, the chairwoman of the board, would only say the board and Napier had a good discussion.
|Attendance has been soft at Milwaukee since 1996 when Tony George decided to create the IRL and split the sport. It's now 2009 and the sport is still reeling and most track promoters are losing money|
According to sources, Milwaukee Mile Holdings, which has lost millions of dollars staging races at the racetrack, wants to get out of racing sooner than later. It has already exercised its right to leave the track in December 2010, but has communicated to the board that it wants to get out as soon as possible.
However, the board and Milwaukee Mile Holdings are at odds over a number of issues. One such issue involves a so-called letter of credit, a kind of insurance policy the board has with Milwaukee Mile Holdings to ensure the board can continue to make payments on the $1.8 million it still owes on the fair's new grandstand.
Milwaukee Mile Holdings LLC has insisted that, when it renegotiated a new operating agreement in February 2008, both sides failed to reach agreement on a new letter of credit. As a result, from Milwaukee Mile's point of view, a letter of credit does not exist.
The board insists that the old letter of credit is still operational.
Napier is hoping both sides can arrive at an exit strategy as soon as possible that will allow his group to take over immediately. Auto racing will go on as scheduled this summer, Milwaukee Mile officials say.
The impasse has put the fair in a bind and also threatens the future of motorsports at the racetrack. The fair needs revenue from the track to address its $8.6 million deficit. But Milwaukee Mile Holdings says it cannot make money under the current agreement. JSOnline.com02/07/09 [Editor's Note: Umpteen promoters have failed there.] Milwaukee Mile Holdings LLC, which holds the rights to motorsports events at the Milwaukee Mile, has exercised its option to get out of racing by December 2010, if not sooner.
The investor group is currently in talks with state lawyers representing the Wisconsin State Fair to negotiate an exit strategy. For now, racing this summer seems assured. But beyond that, the future for motorsports in Milwaukee is not bright.
Milwaukee Mile Holdings wants out for a simple reason: it is losing money. The two sides negotiated a new agreement exactly one year ago that eased some of the terms for Milwaukee Mile Holdings.
But apparently it wasn't enough. And with fair officials refusing to renegotiate yet another agreement, Milwaukee Mile Holdings decided to pull the plug.
But there's a problem. As part of the renegotiated agreement, Milwaukee Mile Holdings had to come up with a new letter of credit that was mutually agreeable to both sides.
The letter of credit, the amount of which could not be determined but which was originally $3.6 million, is a kind of insurance policy for the state should Milwaukee Mile default or otherwise be unable to continue racing. That money would be needed to, among other things, help pay for the new grandstand.
That letter of credit does not exist right now. A new one was never put into play. JSOnline.com