ISC loses $30M on Staten Island property (Update)

UPDATE ISC CEO Lesa France Kennedy in a statement said the money from the sale could be used for "a mixed-use and entertainment destination development" across the street from Daytona Int'l Speedway. Morningstar analyst Jaime Katz said the price for the Staten Island property "seemed to be fair" and should make ISC investors "feel better about (the company's) plans for Daytona Rising now that they have cash that’s accessible." Daytona Beach NEWS-JOURNAL

08/06/13 International Speedway Corporation announced that it sold its 676-acre parcel of property located in Staten Island, New York, to Staten Island Marine Development, LLC. Marine Development purchased 100 percent of the outstanding equity membership interests of 380 Development LLC, a wholly owned indirect subsidiary of ISC and owner of the Staten Island property, for a total sales price of $80.0 million. ISC paid approximately $100 million in 2004 in hopes of building an oval track on the property. So between the $20M loss on the sale coupled with the taxes, studies ISC did on the property since 2004 and real estate transaction fees, ISC is estimated to have lost at least $30 million.

The Company, as a result of the sale, expects to receive a cash tax benefit of approximately $41.5 million, based on its current corporate tax rate, that combined with the net proceeds will provide ISC with approximately $117.7 million in incremental cash flow. In addition to the sale proceeds, ISC has already received $4.2 million in non-refundable payments from Marine Development to have had the exclusive negotiation rights for the Staten Island property. ISC received $7.5 million of the purchase price at closing. The remaining purchase price will be financed with the Company holding a secured mortgage interest in 380 Development as well as the underlying property. ISC PR

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