By Bill Plock
It’s crunch time with only days to go to secure purchasing the land that has housed Boulder Valley Velodrome since it opened in 2015. Cari Higgins, a national champion track cyclists, assistant coach for the Olympic Track Development Team and Boulder Real Estate agent, leads the group of investors trying to secure the land from current owners, Frank Banta and Doug Emerson.
Says Cari, “the velodrome covers its expenses operationally if you don’t factor in the cost of the land and debt service. What we are trying to do is buy the land with a group of investors and then turn the Velodrome operation into a non-profit. The investors are passionate about having a Velodrome in the community and we have seven major investors who have pledged at least $100,000, but right now we are seeking minority partners who will pledge between $10,000 and $99,000. The goal is to raise $1.7 million dollars and we only need $300,000 more”
The investment is in the land, so with the current trend of real estate in Colorado, it appears to be a low risk opportunity. With re-payment likely in 10 years at the market price then, surely this is a fairly safe investment. Deadline for verbal commitments is January 22nd.
If you are interested in ownership contact Cari at covelodrome@gmail.com or call Cari at 303.717.9934
Here is an excerpt from the package of information given to potential minority investors:
Expectation that the non-profit covers all costs that “run with the land”, including taxes, maintenance, utilities, etc. Owners should not expect the “tenant” to pay market rate rent but the intent is that some amount of rent payment will be collected by the land-owning entity eventually. Because the future financial performance of the non-profit cannot be predicted with certainty, it is also possible that it could be unable to pay some portion of the costs associated with land ownership at some point. We believe this is unlikely based on historical performance, but you should be aware that in that case, the land owners would be proportionally responsible for these costs.
The Boulder Valley Velodrome has been in operation for five seasons, with operational metrics that support business viability and a trend of improvement in key performance indicators. However, debt servicing costs related to initial construction push out the payback time and limit the ROI beyond what is acceptable to the current owners (Doug Emerson and Frank Banta).
A contract has been executed for the sale of the velodrome property to a buyer who intends to develop the property for other purposes – there is no possibility that this party will allow continued operation of the velodrome.
The executed contract includes a buyout clause, allowing for sale of the property prior to 15 December 2019 to an alternative party who will maintain the operation of the velodrome.
The current owners of the velodrome property, improvements, and business operations are willing to invoke the buyout clause for a total price comprising the existing loan on the property/business and the contract buyout fee – in total anticipated not to exceed approximately $1.8mil.
A small group of individuals intends to exercise this buyout clause for the primary purpose of ensuring the continued operation of the velodrome, with all the benefits to the community it affords.
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