On a bright weekday afternoon at the Irwindale Speedway last month, the faint rush of traffic on the nearby 605 freeway was drowned out every few minutes by a half-dozen stock cars taking turns zooming around the half-mile oval track.
Jim Cohan, owner of LA Racing Experience, stood watching – pleased – as dozens of giddy amateur drivers took their inaugural lap at the auto-racing venue.
About five miles away at his office in Arcadia, Jim Mnoian was less pleased that day. Mnoian, chief executive of Nu-Way Industries Inc., politely declined an invitation to visit the track weeks after his family’s waste disposal company sold the site to downtown L.A. real estate firm Lindom Co.
A sturdy man with a ruddy complexion and a firm handshake, Mnoian said he was ready to wash his hands of the place that had once enchanted him but had lately caused him much grief.
“We had a lot of good times down there,” he said. “We took a lot of people: family, customers from our landfill business and friends of our kids who had never been to a race track.”
Still, selling the property came as a relief. Mnoian said dealing with Irwindale Speedway, the company that built and operated the venue, had become a major headache. The track operator, which people associated with the track said was difficult to work with, filed for Chapter 7 liquidation bankruptcy in February 2012, 14 years into its 33-year lease for the site.
“All they ever wanted to do was lower the rent,” said Mnoian.
Bankruptcy filings showed that despite generating revenue of about $4.4 million in 2011, the track operator had assets of just $29,000 and debts of $332,000. The bankruptcy brought the regular Saturday night NASCAR races at Irwindale to a screeching halt. Only Thursday night drag races and Cohan’s LA Racing driving school, housed at the site, continued to use the facility.
To get NASCAR events up and running again and to untangle itself from the bankruptcy, which is still pending almost two years after the filing, Nu-Way agreed to waive $55,000 in rent it was owed by the track operator in exchange for regaining control of the property. The Mnoians then handed over operation of the track to Cohan and his team, who since the bankruptcy filing had been its unofficial keeper.
Some normalcy has returned with Cohan at the helm – NASCAR races returned after a year’s hiatus and crowds have swelled – but the future of the track remains in flux.
After his firm closed on its estimated $22 million purchase of the property Oct. 1, Chris Atkinson, a managing partner at Lindom, said the track will continue to host NASCAR racing for at least one more season. The firm has not, however, ruled out the possibility of future development on the site, either in addition to or in place of the track.
“There are very few 64-acre sites in the greater L.A. area, let alone on a major freeway with immediate ramp access,” he said. “To own a site like that – not only for its existing use but for future development – is a great opportunity.”
The speedway property had been owned by the Mnoians since long before it was a race track.
In the early half of the 20th century, the land was one of many quarries in the area that were mined extensively for rock and gravel used by the voracious developers who built Los Angeles. The family purchased what was then an 85-acre hole in the ground from Pacific Rock & Gravel Co. in 1968. Jim’s late father, Paul, had intended to use the pit to dump household and commercial trash he hauled for his company, San Marino Disposal. But because the pit had been mined so thoroughly – enough groundwater had seeped into the former quarry that Jim and his brothers used to waterski there – the state water board allowed the company to dump only inert, nondecomposable waste, such as dirt, rock, concrete, asphalt and tires. Nu-Way was formed then as an operating company for the commercial accounts of the disposal business, and the late Glendale entrepreneur J. Earl Garrett bought into the company five years later.
Jim Mnoian joined Nu-Way as vice president in 1983 at 33 after his father unexpectedly collapsed and died in a business meeting.
In the late 1980s, the 22 westernmost acres of the property, which had filled up earlier, were sold and converted into trucking terminals. By 1993, the remaining landfill reached capacity. Nu-Way paved a massive parking lot on much of the site, which became host to an open-air swap meet.
Just five years later, after the swap meet business proved unsustainable, Nu-Way agreed to let entrepreneur Jim Williams build a race track on the site, a project that cost north of $15 million. Williams, former chief executive of the now-bankrupt race track entity, funded most of the project with money he made selling beef patties to McDonald’s Corp. through his Golden State Foods company. The track opened and ran its first NASCAR season in 1998, under the direction of General Manager Bob DeFazio.
Events at the track ran smoothly for years – it reportedly reached profitability in five years – but as the years wore on, fewer and fewer fans trickled in to watch the weekend races, many of them using free passes. In the year before the bankruptcy filing, an average of well under 1,500 people dotted grandstands that were built to hold as many as 6,000.
Cohan, who began leasing offices on the property to run his driving school in 2005, said that while he suspected Irwindale Speedway was having trouble in 2011, he was surprised when DeFazio told him the operating company would file for bankruptcy. Just four months earlier, DeFazio had assured him that NASCAR would return in spring 2012 even though the previous racing season had been mysteriously cut short.
“They were very dismissive,” he said. “They said, ‘Everything’s fine. What could there possibly be to worry about?’ But in reality, it was a sinking ship.”
The filing came Feb. 13, 2012, a Monday. The previous Friday, according to Cohan, Williams and DeFazio showed up at the track with moving trucks and began hauling things away without first telling staff what was going on.
“That was a messy, sloppy day,” he said.
Cohan, caught unaware, refused to hand over his keys, insisting he would find a way to keep his business running.
For about 10 months, he did just that. Nu-Way regained control of the property in February as part of the bankruptcy process and handed operations over to Cohan’s company, 211 Entertainment, in December. During the transition period, he quickly rehired many of the people who had been laid off due to the bankruptcy and put in motion a plan to bring NASCAR back in spring. He also changed the name of the facility to Irwindale Event Center to better reflect his intentions for the place. He continued the weekly drag racing and began hosting go-kart events on the property as well as corporate team-building exercises that require participants to drive blindfolded with direction from a passenger.
He said the effort his team has put in made 2013 the track’s best season yet. Crowds for the Saturday night NASCAR racing season, which ended last weekend, were routinely up to 3,500 people.
“It’s refreshing to me to know that our fan base is a couple thousand fans,” he said.
While things were looking up for Cohan, they were cloudier for the Mnoians, who had not intended to sell the site that had been part of their family for nearly a half-century.
The decision to sell the property came on the back of the bankruptcy, when Mnoians’ partners, the Garrett family heirs, who had moved to Utah, decided they didn’t want to spend the time or money it would take to reposition the race track.
“I didn’t want to sell it, but our partners and even my brothers said, ‘Let’s just sell it,’” Mnoian said. “I was so skeptical, I didn’t think anyone would buy it. We had some proposals from Monster Energy and Lucas Oil, which I thought were ideal candidates – a big company that doesn’t rely on the race track to survive. But we never could make a deal with them.”
They hired Ed Matevosian, a CBRE Group Inc. agent, to sell the property.
“We held out for a group that was able to close escrow quickly rather than have the property tied up for another year,” he said.
Mnoian said he hoped the track’s new owners would put money into renovating the track, something he said the facility sorely needs.
“The other guys didn’t do much maintenance,” he said. “The bathrooms and concessions were clean, but the parking lots and paving and landscaping, they kind of let it go.”
Cohan said he has every intention of running race events on the track through the end of next year, the following year and for as many more years as Lindom, the new owner, allows. In fact, he and his management team are already putting together a racing schedule for next year. Still, he’s well aware that the future of NASCAR racing in Irwindale is not entirely up to him.
“Make no mistake about it – no one’s going to deny it – based on what they paid for the property, they need more money than what I’m giving them in rent,” he said. “Racing itself can’t justify the amount they would need to get every month. That’s for them to decide what they’re going to do.”