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Crittenden Research, Inc. P.O. Box 1150 Novato, California 94948 Customer Service (800) 421-3483
Vol. 13, No. 22 June 11, 2007

AMENITIES PICK UP (Excerpt)

Forget the beach. Today, nothing can bring people closer together than fast cars, wine, nose jobs and
windsurfing. Motorsports Resorts International (MRI), SDS Lumber Co. and Baja Resort Advisors hop aboard the experiential travel bandwagon by offering unique lead amenity opportunities complemented by various other offerings that make their resorts attractive to more than just a single demographic.

A company like MRI creates private motor sport resorts that don’t become bland car havens centered on dads, testosterone and smell of gasoline at 8:30 a.m. The company aims to bring resort amenities to its projects that will encourage entire families to frequent the developments. SDS Lumber centers on developing a high-end lodging environment, which is focused on keeping tourists from windsurfing the Columbia River, then taking their vacation dollars elsewhere. Baja Resorts, meanwhile, creates a wine-themed enclave for North American second-home buyers and vacationers looking for a destination-wedding environment.

MRI Partner Steve Patti believes the success of the $20M Bergrennenring private motor sports resort in Texas Hill Country will lead to further developments in Southwestern and Southeastern states. Bergrennenring means “hill race circuit” in German, an homage to the Texas Hill Country’s German immigrant heritage. MRI currently is searching for a site in and around Johnson City for the project’s development. The Hill Country is in the midst of a resort construction boom because of its arid, Southern California-like climate. MRI will evaluate areas for future development that combine dry, sun-splashed weather with heavy tourist traffic and a favorable motor sports environment.

MRI wants to take advantage of the rising interest in NASCAR and record sales for sports cars despite soaring gas prices. The company aims to translate spectator passion into a hands-on experience. MRI believes motor sports enclaves traditionally miss the chance to offer family options. To that end, the company will focus on developing resorts in established destinations where it can offer recreational options, beyond racetracks, based around resort-like service models with business services, a concierge and spa. One-year-old MRI plans to create two tracks with a pair of membership options determining access to either track. The standard-membership target market includes car enthusiasts with household incomes of more than $100K. The 1.8-mile track constitutes the bulk of Phase I. MRI markets premium memberships to households with annual incomes of more than $200K. Premium members have access to a 2.5-mile track within the 220-acre to 225-acre Phase II. Formula One giant Tilke Engineering serves as designer for the Phase II track and may possibly design the entire facility. Enlisting Tilke serves as a major boost in credibility for MRI’s project, which Tilke will use as an avenue to expand its North American visibility.

Premium members have access to the entire 350-acre property, including an Admirals Club-like clubhouse, both tracks, a concierge, spa and an opportunity to purchase trackside lots for home development. Approximately 50 home lots will measure one-half to one acre and will be strategically placed on corners around the 2.5-mile track. Twenty retreat lots will lie away from the track for buyers looking for a secluded feel. MRI plans to release 10 to 15 lots per year in order to maintain an exclusive
feel for the lots, which will keep prices up and allow the developers to avoid a fire sale with the final lots. MRI targets a soft cap of 500 members for Phase I and 200 to 300 members for Phase II.

MRI plans to integrate existing hospitalities in its immediate vicinity to offer a wide range of amenities to its guests and to also serve as an attraction that directs dollars to surrounding tourism-based businesses. For instance, although no hotel accommodations are in the immediate plans for Bergrennenring, MRI hopes to co-opt nearby hotels including the Horseshoe Bay Resort’s Marriott hotel, to provide lodging. If co-opting proves unsuccessful, expect MRI to construct a small, European-style village with 60 to 100 rooms. However, MRI will pursue this avenue only when and if partnership opportunities become exhausted. MRI also is in conversation with local spa operators to manage Bergrennenring’s 3,000-s.f. spa, which will offer primary, non-invasive spa services.

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