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FREQUENTLY ASKED QUESTIONS
What is BeaveRun MotorSports ComPlex? BeaveRun is a motorsports complex designed especially for sports car racing, motorcycle racing, karting activities, autocrossing, product testing, and street and race driver training. In summary, it has been designed to provide a place for all types of motor vehicle experiences. It lies on almost 400 acres of land in Western Pennsylvania. When fully completed, it will have almost four miles of a paved road course that can be run in five different configurations, a 8/10 mile paved training/karting track, a 400 foot diameter skid pad and a vehicle dynamics testing area consisting of more than six acres of open pavement. It will have timing and scoring and classroom facilities, restrooms and showers as well as an administration building and a clubhouse with food service, and a lounge with a large screen TV. A karting shop will also be constructed at BeaveRun. What type of activities will take place at BeaveRun? BeaveRun will host as many different activities as you could imagine in the area of motor vehicles. It will have a variety of driver schools and racing schools. You will see a broad cross-section of racing, from top of the line amateur sports car races, to vintage car races, motorcycle races, karting races and competitive autocross races. Many clubs, such as the Sports Car Club of America, Porsche Club, the Mercedes Benz Club, the BMW Club, Viper Club, Camaro Club, Audi Club have reserved time in the summer of 2002. In addition, look for vintage cars from all over North America at BeaveRun in mid-July, as they tune up for the Pittsburgh Vintage Grand Prix. You will also see a great deal of race driver training as well as street driver training for both cars and motorcycles as well as karts. We will have an active teen driver program. Testing will be conducted for everything from street tires to new racecar designs When will BeaveRun be open for business? The first phase of BeaveRun will be open for business in early summer
2002. The first phase will include the north road course (1.6 miles),
the training/karting track, the skid pad and the vehicle dynamics testing
area. Buildings in the first phase include timing and scoring facilities,
a classroom, restrooms and showers, a karting shop and an administration
building. We plan to have the second phase, consisting of the remaining
road courses, the clubhouse, an additional timing scoring building and
the clubhouse open in the summer of 2003. The first phase land was cleared in the summer of 2001. Excavation
of the first phase began in December 2001. Paving is scheduled to begin
as soon as weather permits in the spring 2002. We are pleased to have
two very accomplished prime contractors working on BeaveRun. Marucci
& Gaffney personnel have taken a special interest in excavation
for the project. They will be working throughout the winter to see that
things are in place for paving in the spring. IA Construction will complete
the paving using a polymer formula especially designed for BeaveRun.
BeaveRun MotorSports ComPlex is owned by a Pennsylvania limited partnership,
Speed4U, L.P. The general partner of Speed4U, L.P., is PMPark, Inc.
PMPark owns a one percent interest in Speed4U. Limited partners own
the remaining 99 percent interest in Speed4U. In that regard, Speed4U
has been qualified to issue limited partnership interests by the United
States Securities and Exchange Commission as well as several state securities
agencies through a private placement memorandum. Speed4U has entered
into a management agreement with PMPark for management of BeaveRun at
a fee of $2000 per month. As note above, Speed4U, L.P., which is a limited partnership, owns BeaveRun. A limited partnership was chosen to own BeaveRun for two main reasons. One is because a limited partnership, unlike a corporation, is not a separate income tax paying entity. Thus, not only does Speed4U not pay income taxes, but also tax benefits that are often held in a corporation flow directly to the partners. In addition, limited partners have no personal liability associated with the operation of BeaveRun. Speed4U issues limited partnership units through a private placement memorandum. We chose to use a private placement for the issuance of limited partnership units because of ease of issuance, and since it is a "private" placement, there are no sales commissions. Thus, the investment goes directly to Speed4U to be used for development of BeaveRun. In other words, nobody collects $200 for passing "Go". How are you financing the development of BeaveRun? BeaveRun is financed in part with equity and in part with debt. We estimate the cost of phase I to be about $6 Million. The whole project is budgeted to be about $9.7 Million. We are financing the first phase with $4.4 Million in debt with the balance of the costs (about $1.6 Million) covered by equity contributed in part by the general partner, and in part by the issuance of limited partnership interests. This ratio was chosen because it leverages the equity to maximizes the return to the limited partners. Do you have financing in place? Speed4U closed on construction and permanent financing through PenTrust Advisory Services, Inc., and the ERECT Fund in December 2001. A portion of the construction financing will be taken out by a SBA 504 loan arranged through the Regional Development Funding Corporation. The loans have a one-year construction period with a ten-year permanent term and a twenty-year amortization. The interest rate throughout the term is fixed at about 9% Have you conducted any market analysis for operations at BeaveRun? Yes, Frost Motorsports, L.L.C., completed a market analysis in October 2001 for the operation of Phase I alone. The analysis states in part that: "This facility is expected to be open by mid 2002 and is positioned to be a source of pride for the entire Western Pennsylvania area, . . .. Many of the events scheduled for the facility will have regional and national significance, as well as strong corporate interest, which together, will provide a solid contribution to the area's economic growth." The report also reflects a positive cash flow beginning in the first year of operations. The report, which includes only phase I, projects net revenues before debt service to exceed $771,000 during the second year of operation, with the net revenues increasing to over $935,000 by the fifth year. Do you have an appraisal of BeaveRun? Yes, an appraisal/market valuation analysis for Phase I, alone, was completed by Cambridge Partners & Associates as of September 20, 2001, in accordance with appraisal standards established by the American Society of Appraisers, the Appraisal Institute, and USPAP. The appraisal reports a "going concern" value equal to $6,200,000 and a real estate value of $6,286,000. It also indicates cash flows and net revenues very similar to that shown by Frost Motorsports, L.L.C. We are pleased with the results of these reports, especially since the appraised value for phase I exceeds our projected cost for development. The reports confirm the value of BeaveRun as we had anticipated. What is the BeaveRun Track Club? The BeaveRun Track Club is created to enable members to use the facilities at BeaveRun on a regular basis. Weekly track time will be allocated to members of the Club. In addition, exclusive weekend time will be available. Members will also have use of the clubhouse, will receive discounts on fees for services and the cost of merchandise. Finally, we plan to have friendly competition among members associated with timing on the road course, the karting/training track and autocross events. An annual banquet is planned. Who is operating BeaveRun? The founders of BeaveRun are Thomas C. Wettach and Timothy W. Silbaugh. They are the principal officers of PMPark, Inc., the sole general partner of Speed4U, L.P. Earl Seiler and Scot Silbaugh also have interests in PMPark, Inc. Alan Wilson, of Wilson Motorsports, is the BeaveRun designer and continuing safety consultant. Mike Rand is our part-time manager and Danny Yanda is also a consultant. Earl Seiler is construction manager and Scot Silbaugh is operations manager. Marketing and advertising are being handled by George Patterson, marketing manager. Additionally, the Society of Automotive Engineers will be working with BeaveRun in administering training programs. How do I contact BeaveRun? As of January 2, 2002, our telephones will be in operation.
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