Riverside County officials this week will decide whether to continue exclusive negotiations with a Palm Desert-based group wanting to build a massive motor-sports club that would include a Formula One-quality racetrack and research complex near the Thermal airport.

While generally expressing support for the idea of a racetrack complex, county officials — in interviews and public records obtained by The Desert Sun — say they are concerned about DJTRM LLC's financing and its ability to bring together the necessary automotive and research companies. They also say they've provided multiple extensions to deadlines set forth in the negotiation agreement.

DJTRM representatives maintain they have the support and interest from the necessary key players. They also say their sole investor — the country's leading independent petroleum wholesaler, Tower Energy Group — will provide the necessary capital to develop the 660-acre site.

No final price tag has been released

Riverside County economic development officials say that if they cancel their exclusive negotiating agreement, they would continue pursuing the idea of bringing a racetrack to county-owned land adjacent to the Jacqueline Cochran Regional Airport.

DJTRM's proposal — if it attracted nine races and was completely built out — could create more than 5,000 jobs and be a $513.4 million boost to the desert economy, according to a report done by Redlands-based economist John Husing.

“If there is an annual Formula One racing event, which would draw massive crowds, put people in our hotels, our restaurants and use our golf and tennis facilities, we're all for it,” said Tom Freeman, spokesman for the county's Economic Development Agency.

“We are being asked to make approximately $150 million in taxpayer funding available to support this project and have a fiduciary responsibility to make sure this is financially viable proposal.”

Negotiating over two parcels

County and DJTRM officials have been in exclusive negotiations since July over two parcels of county-owned land.

According to the economic report, renderings and project partner Paul Clayton, the complex would include:

A roughly 3-mile main track that could be reconfigured for three smaller tracks.

A membership club for upwards of 500 high-end car owners, who'd pay $18,000 a year for benefits that include parking spaces in the 800-to-1,000-car, climate-controlled garage as well as access to the track when races are not happening.

Officials also are proposing 40, 6,000-square-foot garages that would sell for $2.5 million each.

“These are production cars,” Clayton said of the high-end vehicles he hopes to attract.

“There's more noise and more emissions on (Highway) 86.”

An alternative energy research facility that would partner with local universities and ultimately tie into research being done at the Salton Sea.

Pavilions that would be funded by automotive companies to highlight their products.

Smaller tracks for technical driving practice and off-road experiences.

Airplane and car museums that would be open to the public.

County officials have said Formula One racing would be the ultimate goal.

Clayton said the venue could accommodate that. His support base includes contacts from across the globe, he said.

Husing did not include the impact of Formula One races in the economic study, saying he “felt it was over-reaching” as his analysis takes a “conservative” approach.

When asked if it would be possible to bring a Formula One race to the valley, Husing said it is a “long shot,” but it could be done.

He said landing such a deal in Thermal would equate to more than double the impact of the American Le Mans Series, which generates 1,131 jobs and has an economic impact of $110.4 million.

“The way the schedule works is not impossible because it moves around the world,” he said. “Timing is such it is possible.”

Developer remains confident in project

While expressing interest in the project, county officials have also expressed reservations about DJTRM's proposal.

“I'm skeptical as to whether or not he can deliver all the research and automotive companies to that location,” Riverside County Supervisor Roy Wilson said.

He said he's supportive of a “research center” at the location but is leaving the negotiations up to DJTRM.

The developer has required “multiple extensions” during the negotiations, Freeman said. There have also been changes in the partnership.

In a letter sent to the county in January, and obtained by The Desert Sun through a public records request, one of the project partners, identified as J. David John of Burr Ridge, Ill., announced he was leaving because of a “difference of philosophy” in the project's direction.

John said in the communications that he was taking eight large-name contacts with him.

Clayton said that the claims of his former partner were a “gross misstatement” and he continues to work with him on an unrelated project.

Clayton also provided The Desert Sun with several letters from supporters such as former race car driver Parnelli Jones.

“It would make a major economic impact, not only your particular area, but to all of the vast Southern California motorsports and car collector community,” Jones wrote in his undated letter to the county, which indicates he'd add his cars to those at the museum.

“The longtime need for a world-class road course facility in our area would be finally and greatly fulfilled.”

Developers and county officials met again Thursday to continue negotiations.

Freeman said the county has been encouraging “the developer to seek his financing, to seek his engineering work and to let him continue to build financial support and backing for his project.”

Clayton did not provide a final price tag, but said Mercedes Benz World near London, a smaller location with drivers' experiences, restaurants and the like, cost about $280 million.

The first phase of the Thermal project, including part of the track and the climate-controlled members garage, would be roughly $35 million, Clayton said.

Torrance-based Tower Energy is able to finance the project, Clayton maintained, saying he's “not even close” to being worried about the money.

“The only people in this economy that are making money is oil companies,” Clayton said.

Club memberships and the manufacturer pavilions also would generate revenue.

County economic development officials are expected to make a decision on the DJTRM proposal.

If they decide to end the exclusivity of the negotiations, it would allow the county to go out and “see if there are people out there that would be interested in doing” a Formula One-type proposal.

Even if the county decides to end the exclusive aspect of the deal, DJTRM could continue to negotiate with the county. They just wouldn't have the guarantee of no developer competition.

Clayton said he is confident in his project and the negotiations.

“We're one of a kind,” Clayton said of his proposal. “There's nothing like it.”

Additional Facts

Thermal MotorSports Park

John Husing, an Inland Empire economist, was asked in 1994 to predict the economic impact the California Speedway would have if the Kaiser Steel Superfund site was transformed into a sports racing destination. His report was spot-on. Now, he's been hired to prepare a “pro-forma” budget and economic impact report for DJTRM LLC, developers of the proposed Thermal MotorSports Park.

Here are some of the observations made in the 55-page report

Estimated economic and employment impact:

• With no races: $70.7 million and 477 jobs
• With a full schedule of races — one from each of eight circuits, plus a group of races from Sports Car Club of America: $513.4 million and 5,080 jobs

A full compliment of races would generate $60.2 million in direct spending from the outside world. It would pump $325.4 million into the local economy by students, drivers, crews and spectators at local hotels, restaurants, retail stores and gasoline stations.

By the numbers

Projected yearly operating costs:

• Comparable to California Speedway costs of full-year operation, including $10 million in sanction fees and purses: $19.8 million

Projected annual operating profit :

• With no races: $3.2 million
• With the full schedule of races and activities: $34.9 million

Projected annual revenues:

• With no races: $13 million
• With the full schedule of races: $41.7 million in ticket and track rental
• Total receipts counting factory, racing school and club revenue: $54.8 million
• The private collectors' garages would be sold for $2.5 million apiece
• The club, with 300 memberships costing on average $18,000 a year, would generate $5.4 million in track revenue