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The Newton-Barcelona connection


Two years ago, Newton’s dream of a big-time motorsports track appeared dead and David Watson knew nothing about stock car racing. All that has changed.

Last week’s announcement of a commitment to build a $70 million track in Jasper County adjacent to Interstate 80 was like a Daytona 500 victory for Watson, who is a partner at LWBJ LLP, an accounting and business advisory company in West Des Moines. It came at the end of two years marked by countless trips to Newton, occasional flights to cities across the United States, a frustrating search for the right investment banker, meetings with star NASCAR driver Rusty Wallace, a number of 20-hour workdays and “gut-wrenching” moments when Watson thought he was almost at the finish line – only to wind up back on pit row.

It started in May 2003. “I was five years younger then,” Watson joked.

Stan Clement of Newton already had worked on the track proposal for years when Paul Schlaack a retired executive of the former Equitable of Iowa Cos., got involved. Schlaack became president of U.S. Motorsport Entertainment Corp., the group formed to bring a track to the area. He had known LWBJ and Watson for some time, so he made contact.

“He knew I had done a lot of real estate deals,” said Watson, who co-founded LWBJ in 1992, “so he asked me to be the point person on putting a deal together.”

First came research into consumer analysis, as Watson pored over statistics about the auto racing industry. Then Schlaack and Watson put a business plan together and tapped others for help and ideas: Adam Claypool, vice president of investment banking at Broker Dealer Financial Services Corp. and Terrus Real Estate Group LLC’s Kyle Yencer and Jeff Saddoris. “They led us to someone in upstate New York, which led to New York City, which led to Atlanta, which led to the people we’re now dealing with in Europe,” Watson said.

“For some of the people we talked to, the deal was too small; for some, it was too big,” he said. “Some funds have a charter that says they can only invest in existing businesses, and this is a start-up. With some bankers, it was a matter of timing — whether they had funds available or not.”

Tight-lipped accountant that he is, Watson wouldn’t name the European company that made the winning proposal just days ago. He identified it only as a private company with many offices in Europe; he’s dealing with the branch in Barcelona, Spain. But he did say that when it came down to the wire, three potential investors submitted proposals in the space of four days.

“There were others who were willing to finance it, but this was the best deal,” he said. “Best” in this case meant, among other things, not only a good interest rate on the loan but also a high likelihood of successfully closing. “You don’t always go with the lowest rate,” he said. The winning proposal was an offer to finance “a decent portion” of the track’s $70 million-plus price tag. Final closing might still be a month away.

Three or four times over the two years, Watson thought the deal was on the verge of coming together. “It’s gut-wrenching, I won’t lie,” said the Des Moines native and University of Iowa graduate. On the other hand, he said, “I’ve had the opportunity to meet the greatest people in Iowa and around the country. It’s been a phenomenal ride.”

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