husets speedway 2012 s. splitrock blvd, brandon, sd 57005 · does not imply there has not been or...
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HUSETS SPEEDWAY 2012 S. Splitrock Blvd, Brandon, SD 57005
Dennis Breske, MBA, CCIM, SIOR
Senior Vice President+1 605 444 7100 direct+1 605 310 6666 mobile dbreske@naisiouxfalls.com
Dale Zomer Senior Vice President+1 605 444 7117 direct+1 605 351 1218 mobile dzomer@naisiouxfalls.com
Husets.com2012 S Splitrock Blvd | Brandon, SD 57005
PROPRIETARY AND CONFIDENTIAL
CONFIDENTIAL INFORMATION MEMORANDUM
Propr ie ta ry and Conf ident ia l
The information contained in this Memorandum has been prepared by Huset’s Speedway (“Huset’s”) for delivery to a limited number of pre-selected parties who may be interested in a proposed transaction with Huset’s (the “Proposed Transaction”). The Memorandum contains confidential and proprietary information of Huset’s. Such information is being submitted solely for your confidential use with the express understanding that, unless you obtain and receive Huset’s’ prior written permission, you are prohibited from releasing this Memorandum, discussing the information in this Memorandum, or making a reproduction or use of this Memorandum for any purpose other than for your sole evaluation of the Proposed Transaction.
If a party receives this Memorandum but is not the intended recipient, you are hereby notified that you have received this Memorandum, and any attachments, in error and any review, dissemination, distribution, or copying of this material is strictly prohibited.
Please carefully read this Memorandum in its entirety. This Memorandum does not purport to be all-inclusive or to contain all of the information that you would need in connection with a Proposed Transaction or evaluation thereof. You must conduct your own due diligence and review of Huset’s and any Proposed Transaction. You also should consult with your own investment, tax and other advisors in evaluating Huset’s and any Proposed Transaction.
This Memorandum may contain “forward-looking statements” including financial projections. These statements can be identified by introductory words such as “expects,” “plans,” “intends,” “believes,” “will,” “estimates,” “forecasts,” “projects” or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. No forward-looking statement is a guarantee of future results or events, and you should avoid placing undue reliance on such statements. Except as otherwise indicated, this Memorandum speaks as of the date hereof. The delivery of this Memorandum does not imply there has not been or will not be a change in the affairs of Huset’s after the date hereof, nor does it create any duty on Huset’s to update or supplement any information provided in this Memorandum.
All communications or inquiries relating to this Memorandum should be directed to the persons listed below:
Charles Brennan – Founder/CEO/President8860 W. Sunset RoadLas Vegas, NV 89148Cell (702) 493-9422
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EXECUTIVE SUMMARYINTRODUCTIONThis one-of-a-kind, turnkey racing and entertainment venue has been quoted as being one of the nicest, most modern and high-tech dirt track facilities in the United States. Over $18 million invested and a recent full renovation are the latest developments in a rich history that started over 65 years ago.
Nestled on nearly 75 acres, Huset’s Speedway is a legendary gathering point for crowds that swell to over 9,000 in the grandstands and over 20,000 for concerts and festivals. The opportunities lying in wait for Huset’s Speedway are limitless.
So what does turnkey mean? Quite simply, the assets that made the 2016 season at the Speedway so successful will be yours. Assets such as new concession equipment, PA systems, track maintenance vehicles, monster digital billboards, almost one hundred billboard installations, active online properties, plus much more!
The renovations that modernized the venue are truly remarkable. Some of the most notable and breathtaking renovations include the 9,000 capacity aluminum grandstands, the newly-paved infield, an incredible 18 suite VIP structure, and of course the iconic 3-story Turn 4 Tower.
Legendary racers from around the world have raced here like Tony Stewart, Kasey Khane, Kyle Larson from NASCAR and Brian Clauson, Roger Rager and Steve Kinser from Indy. Concerts like Weezer, Panic! At the Disco, and Hairball gave these crowds a fresh flavor and demonstrated the versatility of the venue.
These events and renovations put this historic Speedway back on the map for dirt-track enthusiasts. Now it’s primed and ready for the legacy to continue in your hands.
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Best Racing in the Country. There are several famous race tracks around the country, but arguably the greatest short track in the in the United States is Huset’s Speedway. The size and banking of the track makes it unique and provides some of the closest and most competitive dirt track racing anywhere.
Tremendous Growth Opportunity. There is approximately $3,000,000 in potential annual advertising and sponsorship revenue. From naming rights on brand new buildings and suites, to advertising opportunities on billboards, digital boards, picnic areas and race day programs.
Huge Income Opportunity. With a facility that can hold 20,000 people for special events, the income potential is through the roof. Ticket sales, suite sales, concessions and alcohol are going to be huge! Having the ability to bring in the special events such as concerts and Monster Trucks is just unheard of for a dirt track.
Concession Stands. All new concession stand equipment was purchased for the 2016 season. There are endless menu options and the potential revenue driven from concessions is unlike any other dirt track.
History. The track is widely regarded as one of the top dirt tracks in the country. Opened in 1954, the Speedway has become a bucket list track for drivers from coast to coast. NASCAR stars Tony Stewart, Kasey Khane and Kyle Larson have all raced at the Speedway, as has Indianapolis 500 starters Roger Rager, Bryan Clauson and Steve Kinser.
National Awareness. Huset’s Speedway has hosted several national touring series. The famed World of Outlaws and the United States Auto Club (USAC) both made stops on their national tour. The track also played host to the International Motor Contest Association (IMCA) and the United States Racing Association (USRA).
REASONS TO CONSIDER
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huset’s SPEEDWAY AT A GLANCE
18vip
suites
9000grandstand
capacity
Lotsof onsite
restrooms
40+parking
acres
7Concession
Areas
COMPANY HISTORY
Fall 1953Tilman Huset
breaks ground in his soybean field and carves out a
rough track
may 23, 1954crowds witness the first race at
huset’s speedway
1955Track is reconfigured into a circle and lights are added
1958after a 2-year hiatus at
Huset’s and a driver boycott of rival soo
speedway, sioux falls racing almost dies. the
newly-formed sioux falls stock car association purchases huset’s and
racing lives on. local legend fred
buckmiller steps in as the track promoter bringing media, publicity, racers,
and the iconic white uniform
“remember boys, we’re a bunch of
poor bastards in a rich man’s Sport.”
1964A new engine spec was
introduced that allowed a newer overhead valve
engine made by chevrolet, ford, and chrysler marking the beginning of the end for
full bodied coupes
1979the final year of the
supermodified racecar
may1980the first sprint car races held at huset’s speedway
1982the beach boys perform to an
incredible crowd of over 14,000
1982fred buckmiller passes away. Bill Leesch and Ed
flowers step into buckmiller’s role
1983World of outlaws makes its first appearance at Huset’s
1985WILLIE NELSON PERFORMS TO A CROWD OF OVER
12,000
1989clarence, steve, and
greg rubin purchases the track from the sioux falls
stock car association
1991turn 1 suite building
constructed
1992crash Walls raised by 3 feet
1993the great flood of 1993
causes extensive damage to huset’s
speedway
1997the united states auto
club makes its first appearance at the
speedway with a national midget series
race
2008NEW CATCH FENCE ADDED
AROUND THE TRACK
JULY 2013TONY STEWART RACES
WITH THE WORLD OF OUTLAWS AT THE
TRACK
july 2015construction begins on
Huset’s Speedway renovations july 2016
USAC Sprint Cars makes their first appearance in the state of South Dakota
at huset’s speedway5
HUSET’S SPEEDWAY GROUNDS
ClimateControlled
luxuryfurnishings
elevatorservice
50”HD TVs
PrivateBathrooms
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***full list of buildings on last page
VIP Suites
Turn 4 Tower
Turn 1 Lounge
ADDITIONAL ASSETS
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• Turnkey Concession Areas• Liquor License• Over 15 Buildings & Structures• Over 20 Vehicles, Trailers, and UTV’s• Complete Sound System• Complete Racing Communication System• iPads for POS Systems• Cash Register Systems• Computers, Laptops, and Cabling All the suites and buildings are packed full of custom furnishings, tables, chairs, barstools, etc…
(30) 50”+ Televisions(2) 14’ x 48’ Digital Boards(1) 10.5’ x 14’ Digital Board
3 water trucks
26,000SF back pit lot
94,000SF newly-concreted infield
600SF Driver services building
fire truck
online properties
***full list of assets on last page
SAT. MAY 14SAT. MAY 21SUN. MAY 22SUN. MAY 29SAT. JUNE 4SUN. JUNE 5
SAT. JUNE 11SUN. JUNE 12SAT. JUNE 25 SUN. JUNE 26
SAT. JULY 2SUN. JULY 3SAT. JULY 9
SUN. JULY 10SAT. JULY 16SUN. JULY 17WED. JULY 20FRI. JULY 22SAT. JULY 23SUN. JULY 24SAT. JULY 30SUN. JULY 31
SAT. AUG 6SUN. AUG 7FRI. AUG 12SAT. AUG 13FRI. AUG 19SAT. AUG 20SUN. AUG 21SAT. AUG 27SUN. AUG 28SAT. SEPT 3
SAT. SEPT 10SUN. SEPT 11
TEST - ALL CLASSES$100,000 SILVER SHOOTOUTHALF PRICE FAMILY NIGHTHALF PRICE FAMILY NIGHTHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTWORLD OF OUTLAWS/FIREWORKSWORLD OF OUTLAWS/FIREWORKSHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTTHE HAIR BALL featuring ROB HALFORD and moreWEEZER & PANIC! AT THE DISCOHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTHUSET'S FEATURED RACESUNDAY NIGHT featuring ASCS SPRINT CARSHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTMONSTER-X TRUCK SHOWMONSTER-X TRUCK SHOWGOLD CUP WINGED QUALIFYINGGOLD CUP NON WINGED QUALIFYINGGOLD CUP CHAMPIONSHIPHUSET'S FEATURED RACEHALF PRICE FAMILY NIGHTGEICO MOTOCYCLE ENDUROCROSSCHAMPIONSHIP NIGHTCHAMPIONSHIP NIGHT
2016 SCHEDULE
410 Sprint Cars305 Sprints Cars
Late Model Street Stocks
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SUNDAY HALF PRICE FAMILY NIGHT360 Sprints CarsMicro Sprint Cars
Hobby Stocks
SATURDAY HUSET’S FEATURED RACE
2016 BY THE NUMBERS
CustomersThroughtheGates 86,577AveragePerEvent 2,624
GrossTicketSales $1,336,424AveragePerEvent $40,498
GrossFoodandBeverageSales $789,808AveragePerEvent $23,934
RaceTeamsAttended 321
SuitesandSeasonTicketRevenue $179,383
Sponsorship/Advertising/Trade $646,317
RetailandMerchandise $52,869
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2017 SILVER SHOOTOUT BY THE NUMBERS
ScannedCustomersThroughtheGates 3,324EstimatedAttendance(comps,sponsors,pitcrews,etc.) 5,250
GrossTicketSales $101,818
GrossFoodandBeverageSales $40,878
RaceTeamsAttended 61
SuitesandSeasonTicketRevenue $10,953
Sponsorship/Advertising/Trade $25,000
RetailandMerchandise $3,254
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May 13, 2017
FINANCIAL FORECAST
Total AttendanceTickets SoldComps/Sponsors/Pit Crews
RevenuesGross Ticket SalesBack Gate Fees (1)Food/Beverage/AlcoholFood Vendor Fees (2)Retail/Merchandise (3)
Additional RevenueAdvertising / Sponsors (4)Annual Suite Revenue (5)On-site Suite Upgrades (6)Pay Per View (7)
Total Revenue
ExpensesF&B Cost of Goods (8)Race PurseInsuranceUtilities/Grounds/Etc (9)Race Rescue Team (10)Security / Parkers (11)Concession Staff (12)Race Officials (13)Various other event staff (14)Audio/Video Staff (15)Cleaning / Facilities (16)Annual Salaries (17)Equipment RentalsSupplies / PostageMarketing / AdvertisingMiscellaneous ExpensesTravel Assistance (18)Property TaxPoints Champion Accrual (19)
Total Expenses
Profit/Loss*key and explanations on next page
44,250 39,825 4,425
$918,000 $172,500 $553,125 $24,891 $44,250
$480,000 $160,000 $91,800 $7,500
$2,452,066
$184,191 $550,000 $32,825 $55,200 $16,000 $16,000 $24,000 $16,000 $24,000 $8,000 $24,000 $96,000 $24,000 $8,000 $59,500 $8,000 $15,000 $52,000 $37,500
$1,250,216
$1,201,850
Average Paid Attendance each race 2,250Average Comp Attendance each race 250Average Ticket Price $20.00Average food & beverage spend $12.50Annual Gross Advertising Revenue $400,000Annual Gross Sponsorship Revenue $200,000Annual Gross Suites Sales Revenue $200,000
16 Racing Eventsevery Sunday from
May 31, 2020 - September 13, 2020
These numbers are based on the following criteria:
5/31/20 - Grand Re-Opening $100k Big Event6/07/20 - Sunday Spectacular6/14/20 - Sunday Spectacular6/21/20 - Sunday Spectacular6/28/20 - Sunday Spectacular7/05/20 - Independence Day Event7/12/20 - Sunday Spectacular7/19/20 - Sunday Spectacular7/26/20 - Sunday Spectacular8/02/20 - Sunday Spectacular8/09/20 - Sunday Spectacular8/16/20 - Sunday Spectacular8/23/20 - Sunday Spectacular8/30/20 - Sunday Spectacular9/06/20 - Sunday Spectacular9/13/20 - Season Championship
These forecasts are just for a minimal racing program. There are several and many more revenue opportunities such as adding Saturday races or hosting community festival events. For example in 2016 we ran over 35 events and did not even scratch the surface of the potential for the facility that could also host major concerts.
FINANCIAL FORECAST (CONTINUED)
Please ask for and see our complete INTERACTIVE ELECTRONIC FORECASTING SPREADSHEET that allows you to plug in your own estimates to determine your potential profits or loss exposure. This allows you to test out ticket prices, ad sales, attendance, purse expenses, and every expense in a fun and easy way to see how many people you will need to break even or make your fortune.
Forecast Key and Explanations
(1) Back Gate Fees: This is based on an average of 350 people paying a back gate fee for an average pit entry fee of $30 ea.
(2) Food Vendor Fees: Outside food vendors such as pizza, BBQ, and burgers pay 30% of their gross sales to the house and based on 15% of our gross concession numbers.
(3) Retail/Merchandise: Based on everyone in attendance spending just $1.00 each at the merch stands. Items from t-shirts and jackets to tylenol and bug spray.
(4) Advertising / Sponsors: Includes all of the sponsorship programs, advertising revenue, billboards, group sales, etc.. Please see the marketing package for suggested pricing (this is a net figure to the business as it already calculates the input variable of the commission paid to the sales reps)
(5) Annual Suite Revenue: There are several individual suite options, group suite options, and season ticket options to be sold on an annual basis. Please see the marketing package for suggested pricing.
(6) On-Site Suite Upgrades: This is based on upgrading attendees on any given night to any un-sold suite inventory including group suites. Formula is upgrading only 10% of the paid tickets at 2x the standard ticket price.
(7) Pay Per View: Estimate of revenue share from the pay per view provider. House gets 70% and the Provider gets 30%.
(8) F&B Cost of Goods: This is based on 1/3 product cost for beer, soda, water, food, etc… 33.33% product cost is a high estimate and it should be even less if done properly.
(9) Utilities/Grounds/Etc: Utilities, Landscaping and various regular and occurring expenses broken down to a per event estimate
(10) Race Rescue Team: The weekly race fee that we were paying for race rescue personnel and ambulance service
(11) Security & Parkers: Based on approximately 12 security and parking staff per event.
(12) Concession Staff: Based on 24 concessions, bartenders, wait staff, etc.. Part time per event.
(13) Race Officials: Based on 10 Racing officials per event ranging from $50 each to $400 each per event for the main competition director.
(14) Various other event staff: Based on an additional 20 part time staff per event from ticket takers to box office, scoring, announcing, bar backs, and other misc positions.
(15) Audio/Video staff: Based on 6/7 audio and video part time staff for each event, camera operators, production staff, etc.
(16) Cleaning / Facilities: Internal and outsourced cleanup fees and staff to clean up the facility after each event.
(17) Annual Salaries: Full time facility general manager and part time administration assistant.
(18) Travel Assistance: Estimate of any travel assistance fees you may want to pay to the race teams to off-set their expenses.
(19) Points Champion Accrual: A fund set up for the various race class point champions for the full year of racing12
SUMMARY
PRICE$7,450,000
BUILDINGSOver 15 new or remodeled Buildings & Structures including: • VIP Suite Tower: 8,700 sq.ft. • 18 VIP Suites: 300 sq.ft. each • Turn 1 Tower: 1,500 sq.ft. • Turn 4 Tower: 7,500 sq.ft. • Driver Services: 600 sq.ft. • Admin Building: 450 sq.ft. • A/V Production Building: 350 sq.ft. • Midway Merch Stand: 340 sq.ft. • Midway Bar: 500 sq.ft. • North Ticket Booth: 160 sq.ft. • South Ticket Booth: 60 sq.ft. • Outlaw BBQ: 320 sq.ft. • Pizza Ranch: 240 sq.ft. • South Concession: 310 sq.ft. • Quonset: 2,000 sq.ft.
VEHICLES• Two Can-Am 8DGA Defenders, both 2016• United 8x16 Trailer, 2007• GMC CM66003 Red Water Truck, 1973• Chevy C7D042 Dump Truck, 1979• International 1724 Water Truck, 1982• International 1645 Truck, 1984• GMC W4S042 PT, 1986• DLTR 7x18 Trailer, 1994• DCT Flat 14 Trailer, 1995• GMC G3500 PT, 1995• Chevy CK15 Pickup, 2001• Mercury Grand Marquis Packer Car, 1999• Ford F700 Firetruck, 1980• Chevy Silverado K3500 Tow Truck, 2006• Chevy C35 Truck, 1995• Dump Truck Runner, 1936• Case 580-E Backhoe• Green John Deere• International S1600 Lift• Grater• Massey Furgeson Red Tractor
COMPUTER EQUIPMENT• Light Speed point-of-sale restaurant hardware and terminals• iPads for point-of-sale system• Technology equipment necessary to run the individual buildings (switches, ports, WiFi, etc.)• Computers, Laptops, and cabling• Cash Register Systems
MACHINERY & EQUIPMENT• Concessions and restaurant equipment to fill and fully operate all of the concession areas.• Two fully operational food and beverage concessions trailers• Industrial Mower• Fire safety systems, alarms and extinguishers• Custom grill with 84” firebox• T-shirt gatling gun• Walk-in coolers• Sound system – Pro Switcher ATEM• Sound system – broadcast panel• Complete Video Production System• Portable bars• Four safes• Six chest freezers• Infield vehicle scale• Complete Racing Communications System• Two High Capacity Vaults and Cash Dispensing units
MISCELLANEOUS • 94,000 sq.ft. newly concreted infield• 26,000 sq. ft. paved back pit lot• 90 Billboard Spaces• 8,300 seat grand stand • 1,800 flip-up seats• 40+ acres of parking• Over 12 bathroom facilities• Liquor License• Website and Social Media Pages• TV’s and large digital boards
FURNISHINGSAll the suites and buildings are packed full of custom furnishings, tables, chairs, barstools, etc…
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LAND+/- 74 Acres of Land
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