~ Company Remains Committed to a Metro New York Speedway Development ~ ~
Will Record Non-Cash, Pre-Tax Charge Of $75 - $85 Million in the Fiscal
2006 Fourth Quarter ~
DAYTONA BEACH, Fla., Dec. 4 /PRNewswire-FirstCall/ -- International
Speedway Corporation (Nasdaq: ISCA)(OTC Bulletin Board: ISCB) ("ISC") today
announced its decision to discontinue pursuit of a speedway development on
Staten Island. The Company will explore alternative strategies for the 676-
acre parcel of land it currently owns in the borough.
Strategic Rationale
ISC had been evaluating the feasibility of developing a motorsports
entertainment facility on Staten Island since late 2004. This study focused
on a number of key project components such as:
- Evaluating the potential for securing the necessary land-use change and
permitting approvals;
- Analyzing the potential requirements and related costs that would be
imposed on the project as conditions of any approvals received;
- Further analyzing the potential economic model for the speedway
development, including construction and other costs; and,
- Determining the level of available public incentives for the
development.
The decision to discontinue speedway development efforts has been
driven by a variety of factors, including:
- The inability to secure the critical local political support that is
necessary to secure the required land-use change approvals for a
speedway development;
- Even if ISC had secured the necessary political support, it became
apparent that the Company would have been faced with unacceptable
approval requirements, including operational restrictions that would
have made the facility difficult to operate and a significant challenge
to market;
- The increased risk that these unacceptable approval requirements could
result in higher construction spending and annual operating costs,
which would have a significant negative impact on the financial model
for the speedway development.
"While we are disappointed that we could not complete the speedway
development on Staten Island, our enthusiasm for the metropolitan New York
market is in no way dampened and we continue to view the region as a prime
location for a major motorsports facility," said ISC President Lesa France
Kennedy. "We clearly believe that if we had been able to proceed through
the full public process, the significant benefits this project represents
would have generated a more positive reaction. However, based on the
results of our feasibility study, specifically the lack of political
support and unacceptable land-use approval requirements, we have determined
it is in the best long-term interest of ISC to discontinue the Staten
Island speedway development and pursue other strategic alternatives for the
property."
Alternative Strategies for Staten Island Property
The Company will immediately begin to research and develop market
demand studies to assist in the evaluation of various alternative
strategies, including potentially selling the property in whole or in
parts, or developing the property with a third party for some other use.
ISC believes the value of the property will be in excess of $100 million
once it is filled and ready for sale.
Given that the property is the largest undeveloped acreage of land in
the five boroughs of New York City, ISC believes it will be attractive to a
wide range of developers and users. The site is currently zoned as-of-right
for industrial use and could provide ease of access through a deep-water
dock located on site. Also, the property can be easily accessed from the
local highway system.
Financial Impact
The decision to discontinue the speedway development efforts on Staten
Island will result in a non-cash, pre-tax charge in the Company's fiscal
2006 fourth quarter results of approximately $75 to $85 million, or $0.90
to $1.02 per diluted share after-tax. Accounting rules generally accepted
in the US require that the property be valued on a current, as is basis,
which is estimated between $65 and $75 million. The Company has capitalized
spending of approximately $150 million through November 30, 2006,
including: (1) $123 million for land and related improvements, (2) $11
million for costs related solely to the development of the speedway, and
(3) $16 million for capitalized interest and property taxes.
"Despite the political challenges we experienced," continued Kennedy,
"we appreciate the support from a variety of groups on Staten Island
including the business, civic and residential communities to bring a
speedway to the area. Due to the considerable interest and support for
NASCAR racing in the region, we remain committed to the pursuit of a
motorsports entertainment facility development in the nation's number one
media market. We believe a facility in this area represents a significant
long-term opportunity for our company, and is one component of several
broader strategic growth opportunities ahead for ISC. We look forward to
our continued success in achieving these opportunities and sharing our
progress in the future."
International Speedway Corporation is a leading promoter of motorsports
activities, currently promoting more than 100 racing events annually as
well as numerous other motorsports-related activities. The Company owns
and/or operates 11 of the nation's major motorsports entertainment
facilities, including Daytona International Speedway in Florida (home of
the Daytona 500); Talladega Superspeedway in Alabama; Michigan
International Speedway located outside Detroit; Richmond International
Raceway in Virginia; California Speedway near Los Angeles; Kansas Speedway
in Kansas City, Kansas; Phoenix International Raceway in Arizona;
Homestead-Miami Speedway in Florida; Martinsville Speedway in Virginia;
Darlington Raceway in South Carolina; and Watkins Glen International in New
York.
Other motorsports entertainment facility ownership includes an indirect
37.5 percent interest in Raceway Associates, LLC, which owns and operates
Chicagoland Speedway and Route 66 Raceway near Chicago, Illinois. In
addition, ISC is a limited partner with Group Motorise International in the
organization and promotion of certain events at Circuit Gilles Villeneuve
in Montreal, Canada.
The Company also owns and operates MRN Radio, the nation's largest
independent sports radio network; DAYTONA USA, the "Ultimate Motorsports
Attraction" in Daytona Beach, Florida, the official attraction of NASCAR;
and subsidiaries which provide catering services, food and beverage
concessions, and produce and market motorsports-related merchandise under
the trade name "Americrown." In addition, ISC has an indirect 50 percent
interest in a business called Motorsports Authentics, which markets and
distributes motorsports-related merchandise licensed by certain competitors
in NASCAR racing. For more information, visit the Company's Web site at
http://www.iscmotorsports.com.
Statements made in this release that express the Company's or
management's beliefs or expectations and which are not historical facts or
which are applied prospectively are forward-looking statements. It is
important to note that the Company's actual results could differ materially
from those contained in or implied by such forward-looking statements. The
Company's results could be impacted by risk factors, including, but not
limited to, weather surrounding racing events, government regulations,
economic conditions, consumer and corporate spending, military actions, air
travel and national or local catastrophic events. Additional information
concerning factors that could cause actual results to differ materially
from those in the forward- looking statements is contained from time to
time in the Company's SEC filings including, but not limited to, the 10-K
and subsequent 10-Qs. Copies of those filings are available from the
Company and the SEC. The Company undertakes no obligation to release
publicly any revisions to these forward-looking statements that may be
needed to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. The inclusion of any
statement in this release does not constitute an admission by International
Speedway or any other person that the events or circumstances described in
such statement are material.
SOURCE International Speedway Corporation
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Related links:
http://www.iscmotorsports.com/
CONTACT:
Wes Harris, Senior Director, Corporate and
Investor Communications of International Speedway Corporation,
+1-386-947-6465
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