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International Karting Industry Buyer's Guide

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INDOOR INFO

DEVELOPING A WINNING INDOOR KART RACING CENTER
By Robert McGuffey, AIA

I was recently asked to evaluate the reuse potential of a warehouse full of amusement equipment from a failed indoor entertainment center. The equipment list included an enviable collection of the major revenue center attractions, from karts, major rides and games to a simulator and complete food service venue, yet it’s closure was not unique due to both overlaps and gaps in the roles of the various parties involved in the development process. So just as race winners thank the team owner, sponsors and crew for their contributions to the victory, let’s evaluate the various responsibilities and interests of the members of a successful Indoor Kart Racing Center (IKRC) development team.

The developer/owner/operator determines the market viability of the attractions mix, negotiates for a viable location, assembles the necessary financing, selects the right operations staff, and creates the marketing and sales programs which will create a dominant market position. There are outside consultants who can provide guidance, but comparable to successful racing team owners, no single individual, no matter how credit-worthy, can or should make every project decision without the advice of team members who can contribute the lessons learned from similar operations.

The landlord is responsible to the risk-averse building lender for securing tenants who will pay the rent on time for the length of the lease, and the broker implementing the deal is paid a commission based on the total value of the lease. Similar to racing sponsors, these team members require a return on their investment, so you should not expect their interests to be beyond the financial transaction, or to believe your pre-opening projections of attendance, revenue and expenses. A compilation of peak and off-peak numbers from similar centers, combined with your market-specific break-even figures are essential to secure the optimum building in your market.

The zoning board and building department officials who approve your plans are charged with enforcing a myriad of conflicting codes, laws and ordinances which are based on conventional building types. You should not expect these individuals to be familiar with the unique aspects of amusement facilities, and their interpretations of the published Standards can be the source of the most costly surprises of the construction phase. Comparable to sanctioning organizations, they have broad authority and the administrative chapter of the codes grants a complete indemnification for their actions, so you have no recourse for unfavorable decisions that negatively impact your facility and operations.

The equipment manufacturers and dealers measure success based on the volume of product sold, but the current economic recession and the 9/11 tragedy have combined to reduce both the number of transactions and the profit margins on amusement equipment. Many suppliers have expanded into services such as space planning and operations consulting, but you should confirm that the supplier can provide the same level of accountability for these services as for their products. Comparable to racing mechanics, the manufactures and dealers should be the exclusive resource for all the necessary technical/testing data and the operational use criteria for their products.

The architect or engineer is held to the high standard of protecting your best interests as well as the health, safety and welfare of the public, and comparable project experience is critical to meeting these obligations. The amusement industry has thousands of unique products and special techniques to achieve an entertaining environment, but only a small percentage of design professionals are familiar with all the options for your project to remain within the construction budget. Comparable to a racing crew chief, your designer should provide the winning choices of cost-effective materials and décor which meet or exceed the high expectations of your customers.

The contractors and subcontractors can provide invaluable insight into the real costs and time required to complete your facility. Comparable to a pit stop crew, they have the right combination of specialists to quickly prepare realistic unit cost budgets before construction drawings are complete. This process can prevent the damaging effects of over-design and subsequent value engineering to reduce the total hard costs. Your investment of time and effort in a 16 division cost estimate and key date/duration schedule will yield the high return of reduced construction change orders.
In summary, any experienced racer will confirm that reaching the winner’s podium is more difficult than it appears to the spectators and requires teamwork and experience. The process of developing an indoor kart racing center is remarkably similar to a racing season with victories, crumpled fenders and technical challenges. And winning is the result of the combined efforts of a great team.

About the Author: Robert McGuffey, AIA is president of Entertainment Architecture, based in Indianapolis, Indiana USA, which provides development and design consulting services to the amusement industry. He can be reached at 317-255-8875 or entertainment@iquest.net.

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