Nürburgring: Financial Desaster? - SAVE THE RING! -
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The story (Die Story)
The Nürburgring is owned by the Land Rhineland-Palatinate and is run by the Nürburgring Gmbh. Since 2004 the Nürburgring GmbH made substantial losses, mostly due to secondary businesses it started in previous years. In order to make more money they planed to build an Event, Leisure and Business Park at the Nordschleife, and were looking for private investors to finance it, as Rhineland-Palatinate could not finance it on its own. But for several years no investor was found.
In 2007 development of the park was started, although financing was not ensured. In mid 2007 a company called MediInvest from Düsseldorf was announced as the private investor financing the project, but this company did not have the €94m required. In order to proceed with the project, public money (i.e. taxpayer's money) was transferred to MediInvest without public notice. "Nürburgring 2009" was planned as an Entertainment, Shopping and Business Park development to include the "fastest roller-coaster in the world".
A similar concept "Spacepark" in Bremen a few years back, went bankrupt very quickly. In early 2009 Rhineland-Palatinate still searched for private financing for the project which was due to open in July. A Swiss businessman offered financing too good to be true, told stories of investors from Dubai, the US and elsewhere, was delaying the whole transaction and asking for money in order to acquire more investment.
Neither Nürburgring GmbH nor Rhineland-Palatinate wanted to believe that the complex financing concept offered by the Swiss had any flaws or could even be a fraud. When they finally realised the truth, the Finance Minister of Rhineland-Palatinate resigned. In total €330 million of taxpayer's money was burned in the project, with little success for the Park. The roller-coaster (€11m) never ran, the shopping mall and entertainment centre are pretty empty.
The concern from local people is now that all this will also influence the Nürburgring and its myth itself, as the operating company Nürburgring GmbH has now even more financial problems than before. There are/were running several investigations with regard to breach of trust, fraud mismanagement and lack of financial control.
The story of the Nürburgring 2009 investment is pretty simple. The ring had small deficits from its F1 promotion and was looking for a concept to increase revenues by attracting more visitors. The management came up with a plan to build a party, congress, shopping and theme park center around the center attraction of the historical Nordschleife race track. The initial investment was calculated at €150m. The managing director of the publicly owned operating company promised the politicians that the money would come from private investors and he got them to actually kick of the project without any commitment of private funding.
It turned out that the project took €330m to complete to a stage that the shopping mall, the historic exhibition, the hotels and party places could start business. The state of Rheinland-Pfalz totally funded the project from tax payers money. The former MD was kicked out and the state's finance minister who was responsible for the disaster resigned.
The scandal continues because now the business is run by a man who was involved with the project for a long time and took a lot of money during the building phase. The tourism figures they expected are not materializing and one has to assume that the new facilities continue to run a deficit instead of paying back the investment. The new management is supposed to pay a rent of €15m annually on an investment of €330m. They are not likely to be able to do so. The whole story obviously pisses off the traditional tourist and hotel businesses who will have to compete with massive over capacities payed by tax payers money in the future. The roller coaster is still not working and probably never will. The question is how this is supposed to work out in the future.
The scandal is now investigated by an enquire commission of the state's parliament. IMO they should write off the losses and fire everybody who had something to do with the project. They should invite all established tourism businesses of the Nürburgring to join with small investments and take significant share of ownership in return. That way the new facilities could find proper usage eventually without destroying the local economy. The local investors should select a management of their trust to run the public company.
The story The Nürburgring is owned by the Land Rhineland-Palatinate and is run by the Nürburgring Gmbh. Since 2004 the Nürburgring GmbH made substantial losses, mostly due to secondary businesses it started in previous years. In order to make more money they planed to build an Event, Leisure and Business Park at the Nordschleife, and were looking for private investors to finance it, as Rhineland-Palatinate could not finance it on its own. But for several years no investor was found. In 2007 development of the park was started, although financing was not ensured. In mid 2007 a company called MediInvest from Düsseldorf was announced as the private investor financing the project, but this company did not have the €94m required. In order to proceed with the project, public money (i.e. taxpayer's money) was transferred to MediInvest without public notice. "Nürburgring 2009" was planned as an Entertainment, Shopping and Business Park development to include the "fastest roller-coaster in the world". A similar concept "Spacepark" in Bremen a few years back, went bankrupt very quickly. In early 2009 Rhineland-Palatinate still searched for private financing for the project which was due to open in July. A Swiss businessman offered financing too good to be true, told stories of investors from Dubai, the US and elsewhere, was delaying the whole transaction and asking for money in order to acquire more investment. Neither Nürburgring GmbH nor Rhineland-Palatinate wanted to believe that the complex financing concept offered by the Swiss had any flaws or could even be a fraud. When they finally realised the truth, the Finance Minister of Rhineland-Palatinate resigned. In total €330 million of taxpayer's money was burned in the project, with little success for the Park. The roller-coaster (€11m) never ran, the shopping mall and entertainment centre are pretty empty. The concern from local people is now that all this will also influence the Nürburgring and its myth itself, as the operating company Nürburgring GmbH has now even more financial problems than before. There are/were running several investigations with regard to breach of trust, fraud mismanagement and lack of financial control. The story of the Nürburgring 2009 investment is pretty simple. The ring had small deficits from its F1 promotion and was looking for a concept to increase revenues by attracting more visitors. The management came up with a plan to build a party, congress, shopping and theme park center around the center attraction of the historical Nordschleife race track. The initial investment was calculated at €150m. The managing director of the publicly owned operating company promised the politicians that the money would come from private investors and he got them to actually kick of the project without any commitment of private funding. It turned out that the project took €330m to complete to a stage that the shopping mall, the historic exhibition, the hotels and party places could start business. The state of Rheinland-Pfalz totally funded the project from tax payers money. The former MD was kicked out and the state's finance minister who was responsible for the disaster resigned. The scandal continues because now the business is run by a man who was involved with the project for a long time and took a lot of money during the building phase. The tourism figures they expected are not materializing and one has to assume that the new facilities continue to run a deficit instead of paying back the investment. The new management is supposed to pay a rent of €15m annually on an investment of €330m. They are not likely to be able to do so. The whole story obviously pisses off the traditional tourist and hotel businesses who will have to compete with massive over capacities payed by tax payers money in the future. The roller coaster is still not working and probably never will. The question is how this is supposed to work out in the future. The scandal is now investigated by an enquire commission of the state's parliament. IMO they should write off the losses and fire everybody who had something to do with the project. They should invite all established tourism businesses of the Nürburgring to join with small investments and take significant share of ownership in return. That way the new facilities could find proper usage eventually without destroying the local economy. The local investors should select a management of their trust to run the public company.
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http://www.eifelzeitung.de/download/artikel-content/notes/file/EZ_Automo_Doku.pdf
http://www.wdr.de/tv/diestory/sendungsbeitraege/2010/0705/index.jsp?trailer=3141492
WDR Film (in German Language - 45 Mins German TV Report)
"Nürburgring - Quick Exchanges in the Green Hell" (original title: Nürburgring – Schnelle Geschäfte in der Grünen Hölle)
film by Christoph Würzburger
Ring Werk Park (Opening July 2009)
http://www.ring-werk.com/ringwerk_en.pdf
Ring Racer inaugural run on RTL
Initiative to Save the Nordschleife:
The Official Website: http://savethering.org
http://www.facebook.com/SaveTheRing
See Sabine's Season's Greatings and support Save The Ring!
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