Kern River Raceway developer seeks buyer as it files for bankruptcy
| Monday, May 11 2009 05:37 PM
Last Updated Monday, May 11 2009 06:42 PM
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The Kern River Raceway off Enos Lane, just west of Interstate 5, in late 2008.
The developer of Kern River Raceway is scrambling to find a buyer or bridge loan to help it emerge from Chapter 11 bankruptcy protection, which the builder filed for late Friday to prevent a foreclosure auction Monday.
Construction of the $30 million half-mile paved racetrack stopped more than a year ago because of mounting debt. The racetrack is adjacent to Enos Lane and Interstate 5.
Enos Lane Farm Properties LLC, managed by Alan Destefani, filed for bankruptcy as a group of lenders was preparing to sell the property at auction to pay off a $4.5 million loan. A group of private investors had made the loan about a year ago.
"(The bankruptcy) allows us some time to come up with a reorganization plan and resolve outstanding issues with all of our creditors, not just a few of them," said Tim Elrod, chief financial officer of Destefani Farms. Members of the Destefani family are the track's primary developers.
Elrod said negotiations are underway with a potential buyer who was unable to complete due diligence in time to prevent the bankruptcy. He declined to name the person or persons involved in the negotiations.
If that deal falls through, the developer is hoping a private investor will step up with a bridge loan. A bank loan isn't likely, Elrod conceded, in light of the credit crunch.
The bankruptcy filing listed an estimated 50 to 99 creditors owed $10,000,001 to $50 million, and assets of $10,000,001 to $50 million.
Most of the creditors are contractors and subcontractors who worked on the partially built race track, which broke ground in February 2007.
The largest unsecured claim is from M.S. Walker & Associates, a Bakersfield contractor owed more than $2.7 million.
The region has several other racing leagues, but none with the same clout and star power as NASCAR, which has a national following and was projected to generate up to 2,000 local jobs and annual tourist revenue of $50 million with the track.
Dan Cohen, manager of the Greater Bakersfield Convention and Visitors Bureau, is rooting for the project.
"Bakersfield is definitely a car town," he said. "We have Buttonwillow and Famoso and Bakersfield Speedway. It would be wonderful to have a NASCAR track, too. That would make us unique, to have all of them, and anything that makes our market unique is something we can sell."
The Collins family, which owned the now-demolished Mesa Marin Raceway, was heavily involved in the project until pulling out in the fall.
They have no ownership interest and no financial investment in the track, but are still anxious to see it completed.
Larry Collins hasn't given up hope.
"On the positive side, there's enough construction done that some day, someone will come in and finish it," he said. "It's just a question of who and when."
