April 6, 2012 — Many of you have heard, and asked about, the recent announcement that PGP Motorsports Park has had some of our operations restricted to just karts and specifically four-stroke karts. At this time it is finally appropriate to provide you, our loyal customers and friends, with some details about what led to this curtailment of operations, and to give you some insight into what the future holds. Rest assured we are confident our long-term future is bright.
Before going farther, we would like to recognize the many offers of support and assistance this announcement generated. It has simply been overwhelming and humbling; PGP's customers are truly a community that we realize daily how fortunate we are to be a part of. Fortunately, the bulk of PGP's livelihood is built around the rental fleet of karts, as these are available to anyone. We would like to stress to all our well-wishers that PGP will remain viable despite this current setback.
Calling this a 'setback' is deliberate; we are confident full and unrestricted operations will be reinstated, but unfortunately the timing of this is still unclear to us. Answering the question "Why did this happen?" is difficult as the circumstances are complex and delicate to our long-term relationships. Regardless of why this happened we must all stay positive as Pacific Raceways and PGP will work through the issue until we have our solution.
As most of you know, Pacific Raceways and King County have been involved in lengthy legal case over the interpretation of the Conditional Use Permit (CUP) used to oversee motorsports operations of the entire property. As a tenant and partner of Pacific Raceways, PGP's operations are tied to the CUP, and therefore we have a vested interest and have participated in this legal proceeding.
The specifics of the case involve a Notice of Order for Violations issued in early 2011 by the King County Prosecutors Office on behalf of the Department of Developmental and Environmental Services (DDES). The Notice prohibited certain operations including the ProFormance Driving Schools on Mondays and Tuesdays at Pacific Raceways, and restrictions were placed on non-karting vehicles running at PGP, specifically cars and motorcycles.
Pacific Raceways immediately filed for an appeal of the Notice, and a compelling case was prepared by counsel for Pacific Raceways. The recently-completed appeal hearing lasted three weeks, and despite what we felt was insurmountable evidence that in fact supports all our uses, a King County Hearing Examiner denied the track's appeal of the Notice of Order and this is where we find ourselves presently.
Our next course of action is to file an additional appeal, which we will do, to overturn the decision of the county examiner. The appeal is based on the 21-year written history of King County’s approval of these uses at the Pacific Raceways complex. Millions of dollars have been invested by the parties in improvements at the facility and our business models are based on prior assurances received over the years as well as years of actual operations. There is also a process for a Stay of the Hearing Examiner's finding motion. If a stay were granted, Pacific Raceways and PGP will be allowed to continue full operations just as before, pending the final determination.
A completely separate development to all of this is the very good news that the King County Council recently passed an ordinance supporting the development of a new Master Plan for Pacific Raceways by a 7-2 vote. This strong show of support came just two days before the county Hearing Examiner's denial of the Notice of our appeal. Ironically, with the legislation now in place for a new Master Plan, the road has been paved — no pun intended — for facility improvement and expansion as well as other customer-friendly amenities that will put the complex on par with the top tracks in North America.
As we wait for rulings on our motions, PGP is limited to just our rental fleet and four-stroke racing karts, and so for the immediate future our focus operationally will be on this and expanding our corporate entertainment. These are core business areas for us and areas of strength, but don't forget we are — like you — racers at heart. We built the complex to support different motorsports, so getting back to full operations is paramount on our minds. Although right now we don't know when full operations will resume, rest assured: the day will come. And when it does, PGP will be in a much stronger position with all current issues having been resolved. And no possibility of any more surprises.
As mentioned above, PGP Motorsports Park operates under the Conditional Use Permit of Pacific Raceways. Even though PGP is a completely separate company from Pacific Raceways, the common CUP in a way ties us together like a marriage. In any good marriage there is some give and take, and one of the immediate benefits of the give and take for PGP has been the extension of our lease to 2039, 10 additional years of operations.
To those customers who have purchased 2012 Super Licenses and are wondering how to utilize them, we would like to offer you three options: a full refund; those that do not want a refund will receive a 2013 membership on top of what remains of this year; or you can receive 150% of the value in any of the many rental kart activities we offer.
In the meantime, in addition to patience we ask for your continued support. For those of you that have that itch, enter in a Rental Kart League Racing event, tell your friends how much fun arrive and drive karting is, or suggest us to your company, family and friends as the best location for an event.
Thank you for making PGP Motorsports Park what it is today: a premier racing venue and home to a community of dedicated, good-hearted motorsports enthusiasts.