The Fast and the Affluent

 
By Laura M. Holson, New York Times
July 16, 2012
 



David TenHulzen and his wife Nancy arrange some of his 15 collector cars in the driveway of their home in West Linn, Ore. TenHulzen plans to move some of the cars to Thermal.

THERMAL, Calif. — The roads are forlorn in this strip of desert 20 minutes east of La Quinta, a warm-weather hideaway frequented by affluent snowbirds and press-shy celebrities. Tall stands of date palms rise seemingly out of nowhere, their fronds singed by the desert sun. Not much moves when the heat soars to 108 degrees as it did one afternoon in May, too hot for rattlesnakes to slither out of abandoned rabbit warrens, the streets empty except for a couple of panting dogs wandering near a sign for Jewel’s Fruit Outlet.

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Tim Rogers, 59, who has made a fortune operating 60 convenience stores and gas stations under the Tower Market brand in California, looked out over this barren stretch toward the Santa Rosa Mountains and smiled. He and his wife and business partner, Twanna, are spending about $90 million to build the Thermal Club, a members-only motor sports club, here in an area better known for the popular Coachella Valley music festival held in nearby Indio.

Where a visitor sees 350 acres of emptiness punctuated by mounds of scrub brush to be hauled, Tim and Twanna Rogers envision 4.5 miles of racetrack etched into the chalky terrain, a place wealthy car collectors can speed along at 200 miles per hour and, when done, house their fleets in individually built 20-car garages.

Much like Ray Kinsella in the 1989 movie “Field of Dreams,” who built a baseball diamond in an Iowa cornfield that attracted players (albeit ghostly), Tim Rogers says that if he builds the club, drivers will come.

“I see this as a great franchise,” he said as he pointed toward a stake with an orange flag marking lot No. 52, where he and his wife will build their garage.

The Rogerses have joined with Discovery Land Company, a real estate developer of country clubs and resort communities based in Arizona, and have signed up 40 potential members. Still, Rogers said, his face growing pink from the morning sun: “I’ve been anxious every week. I want to see the asphalt down. Then members will commit.”

There are a number of public courses in the United States where drivers can rent time to drive solo, but there are few private clubs that cater to well-to-do drivers. Asphalt tracks and expensive clubhouses are cumbersome to build and maintain. A local permit process can take months, if not years.

“About once a week I get a call from an entrepreneur trying to replicate our business,” said Ari Straus, the president of the Monticello Motor Club, a private club 90 miles north of Manhattan that has 4.1 miles of racetrack. “I’ve yet to see a single one actually launch.”

Monticello opened in 2008 and cost about $40 million; its 225 members include hedge fund managers and investment bankers who pay as much as $125,000 to join. (It has a sharing arrangement with Spring Mountain Motorsports Ranch outside Las Vegas, Straus said.)

The Thermal Club is seeking an equally exclusive crowd in the West.

“There are all these people in Palm Springs with lots of money and time on their hands,” said Bruce Meyer, an avid car collector and the former chairman of the Petersen Automotive Museum in Los Angeles.

The first phase of the Thermal Club, whose three main circuits are being designed by Alan Wilson, who has built several courses around the country, is expected to open in February.

Being a member is not for the timid, with club prices high enough to make a Wall Street banker blink. Individual initiation fees are $85,000 (with annual dues starting at $7,200), and buying a lot for a garage and entertainment area costs $200,000 or more. Members foot the bill for their own garages, which are likely to cost an additional $500,000, according to Discovery.

When the $90 million project is completed in three years, Thermal will also have a spa, driving school, go-cart track and control tower modeled after the Spanish-style courthouse in Santa Barbara, Calif., with an additional $360 million spent by members on lots and garages to come.

The Thermal Club could well have gone the way of other clubs not built if not for the Rogerses’ persistence. The couple exhibit a familiarity that comes from years together, first as graduate students at Pepperdine in the 1970s (they married in 1978) and business partners since 1986.

When Tim Rogers began discussing the club’s finances over lunch here (where they were served glasses of Roederer Estate Brut Rose), Twanna Rogers abruptly shushed him so he would not reveal too much. Asked if he had final approval over the racetrack’s design, Tim Rogers said with a half-smile, “Yes, as long as it’s O.K. with Twanna.”

Between them, they own several high-performance cars — including a Porsche, two Ferraris and a gold 2005 SLR McLaren made by Mercedes-Benz — which they keep at their home in Palos Verdes, Calif.

“We have fast things,” said Twanna Rogers, taking a sip of her drink and who declined to give her age. “Fast cars.”

This was not the Rogerses’ first attempt at building a club in Thermal. About two and a half years ago, the Rogerses teamed with three local partners who were interested in building a racetrack there. After financing the project for six months and its appearing to go nowhere, though, Tim Rogers said he and his wife dropped out.

“Tracks are expensive and tough to get through the approval process,” Straus of the Monticello Motor Club said. “It requires deep pockets with people who really love motor sports.”

The Rogerses revisited the idea about a year ago, when an investment in new stores fell through and the permit for a racetrack was approved for Thermal. This time, Tim Rogers said, the couple approached Discovery, which built the upscale Madison Club in La Quinta, a golf resort where the Rogerses are members that is near a second home they own in the desert.

“We were not sure if we wanted to build it,” said Tom Collopy, who visited the Thermal Club site in May with the Rogerses and who oversees the project for Discovery. Ultimately, though, Discovery agreed.

Tim Rogers said he and his wife paid off the outstanding loans of their three partners and gave them a 25 percent nonvoting interest in the project. (He said he and his wife, who put up $90 million to build the track and clubhouse, own the rest.) Discovery will handle development, marketing and operations, earning sales fees as well as fees for building garages, Rogers added.

He projected that the development would be profitable in five years, a more than generous estimate given the scope of the project and the fact it cost twice as much as the Monticello Motor Club.

The Thermal Club’s site is next to a private airport, a bonus for weekend warriors. But it also is a former palm tree farm, which presented complications. About 14,000 palm trees needed to be relocated, at a cost of $300,000. Grading the land to make it level is expected to cost more than $8 million. More than 1.2 million cubic feet of dirt will be moved to create the track and surrounding area, Rogers said.

And getting along with their new neighbors is paramount. The night before visiting the site, Collopy attended a Thermal Community Council meeting to share Discovery’s progress.

While memberships in the Thermal Club are reserved for rich hobbyists, car racing itself is rooted in the middle class.

“Most people who love cars are born that way,” said Meyer, a real estate investor with one of the most extensive hot rod collections in Southern California. “They played with toy cars and Hot Wheels. And they like to talk about it.”

At about 8 a.m. on most Saturdays in Huntington Beach, Calif., Meyer attends meetings of the Donut Derelicts, a popular Southern California group of hot rod and roadster owners who gather in a coffee shop parking lot. There are larger national groups that sponsor get-togethers, like Cars and Coffee, which has its own Facebook page and hosts informal weekend meetings in cities in the United States and Europe.

These are the types of wealthy enthusiast that the Thermal Club’s financiers hope to attract. David TenHulzen, 60, an oral and maxillofacial surgeon from suburban Portland, Ore., attends weekly Cars and Coffee meetings at his local Starbucks.

“I read Hot Rod magazine growing up,” he said. “In high school, I’d take a date to the speedway to watch high-end racing. I always loved cars.”

A decade ago, he and his son built an Ultima GTR racing vehicle. TenHulzen said he now owned nearly a dozen cars, the most expensive a 2007 BMW M6 that he bought for $110,000 and can reach speeds near 200 m.p.h.

“I don’t drive that too much,” he said sheepishly. “I’d be arrested if I did.”

He also owns a vintage 1960s Lotus that is not street legal and is shuttered in his garage.

TenHulzen heard about the Thermal Club from a real estate agent when he and his wife were house-hunting for a winter residence in La Quinta. After a presentation at a sister Discovery property, the Hideaway Club, he was hooked. (Tim Rogers said the racetrack simulator that potential members can drive at the sales office cost $84,000.)

TenHulzen said he planned to move some of the cars, including the Lotus, to Thermal and was considering buying a 458 Italia by Ferrari to drive there, too.

Just how quickly the Thermal Club makes money for the Rogerses and Discovery depends on how effective they are in attracting enthusiasts like TenHulzen. Meyer, the former chairman of the Petersen Automotive Museum who lives in Los Angeles, said the Thermal Club might become a social center for the Palm Springs area, but to do so, it should hold weekend or corporate events that visitors who are not members would attend.

“A lot of people who come from cold climates are itching to be entertained,” Meyer said.

He said he decided not to join because the nearly three-hour commute from Los Angeles was too far.

“If I lived out there or had a house, it would appeal to me,” he said. “But to go out for a day would be too much.”

For his part, TenHulzen seems pleased with the prospect of being among like-minded enthusiasts, even if he has to fly to get there.

“It’s a place to hang out and get away from the high stress of my job,” he said, adding: “You know what I call it? Going to my man cave to play with my man toys.”

 

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