County votes unanimously in favor of long-term agreement for Laguna Seca.

There's a new contract in place for management of Laguna Seca Recreation Area. The County Board of Supervisors voted 5-0 on Tuesday, July 18, to approve a concession agreement with the nonprofit Friends of Laguna Seca for up to 55 years, if the concessionaire meets certain obligations at points along the way to 2078.

"This is a new chapter in Laguna Seca's history," said Supervisor Luis Alejo in making a motion to approve the agreement. "I think this is something the public can be proud of."

Supervisor Mary Adams—who represents District 5, which includes the Highway 68 corridor and Laguna Seca—shared that sentiment. "This is an extremely important day," she said. "I'm delighted by it."

The board's vote on Tuesday was greeted with applause. 

The agreement comes after a decades-long relationship between the County and SCRAMP [Sports Car Racing Association of the Monterey Peninsula] fell apart amid SCRAMP's financial challenges. Friends of Laguna Seca responded to a request for proposals for track management back in 2016, but could not meet financial requirements at the time; they have been fundraising since then, says President Ross Merrill, with many pledges he expects to materialize as checks now that a contract has been inked. 

In 2020, after SCRAMP was removed, A&D Narigi LLC received a three-year contract to run the track. That management agreement differs from the concession agreement awarded to the Friends group; in a management contract, the county retains responsibility for maintenance costs. In the Friends contract—which goes for a much longer term, meant to incentivize Friends to invest in infrastructure—they are responsible for costs. 

“The longer the better,” Merrill says. “The longer term we have, the longer we have to create partnerships with donors and sponsors. The goal is to have a financially independent Laguna Seca that can rebuild itself.”

A&D's contract is scheduled to end this year. Its principal, John Narigi, will stay on working for Friends. 

“One of the primary initiatives of the Board of Supervisors when we began managing Laguna Seca in January 2020 was to assess the business and make recommendations on how to improve the facility and its business model,” Narigi said in a statement. “After three years, it is readily apparent that entering into along-term concession agreement with Friends of Laguna Seca is the right strategy for future financial success and sustainability of the enterprise.”

In the concession arrangement, the county stands to potentially generate revenue—starting in 2028, Friends will pay the county 10 percent of its net revenue annually.

The first phase of the contract is for five years. If Friends invests at least $10 million into the track during that time, it can extend the contract by 25 years. If during that period it spends another $40 million, it can extend for another 25 years.