The new Need 2 Speed opened at the end of April at 2863 Northtowne Lane, suite 400. Rob Sabo/NNBW
Chris Utgaard, owner of Need 2 Speed, says finding the right location for a new kart racing and entertainment center was a multi-year journey filled with more twists and turns than the facility’s signature multi-level kart track.
The new Need 2 Speed opened at the end of April at 2863 Northtowne Lane, suite 400. Utgaard told NNBW that it took nearly two years – 580-plus days – from inking an initial letter of intent to signing a lease on the 45,000-square-foot location. Utgaar said he spent an equal amount of time just trying to find a suitable spot to relocate Need 2 Speed from its former home at Sierra Town Center in south Reno.
“Most landlords were very unwilling to negotiate with an entertainment center,” Utgaard said. “Retail landlords want retailers. There are a number of buildings in the market that I pursued for years that are still vacant.”
Although the new facility is about 5,000 square feet smaller than the former south Reno location, the Northtowne location had no restrictions on the types of amenities Utgaard could add. Need 2 Speed originally opened in December 2013 and featured kart racing with a sprinkling of other attractions. The new facility, however, is an entertainment complex boasting a multi-level kart-racing track, a dozen duckpin bowling lanes, miniature golf, arcade games, and a full kitchen and bar.
Utgaard said a primary reason for moving was the fact that there was little to do for guests who were waiting for track time or attending kids’ birthday parties at the south Reno location.
“It was important for us to have additional attractions,” he said. “At the old location, we could only run so many races per hour and so many people per race. Here we have the same constraints on racing, but there are a lot of different things to do.
“We wanted to expand our offerings, but it was difficult to do there because of the way we had the building set up,” Utgaard said. “There also were some restrictions in the center, so it was just as easy to move.”
Matt Grimes with the Reno office of CBRE helped Utgaard secure the new location and broker a 10-year lease agreement.
Securing funding for tenant improvements and purchasing the facility’s new amenities also proved challenging. To say that Utgaard doubled down on his investment in go-kart racing would be a bit of an understatement – opening the new entertainment facility has been a major financial undertaking.
Live Oak Bank of Wilmington, N.C., provided funding for Need 2 Speed’s relocation and expansion. Despite having a long history with the bank, it was a difficult loan to close, Utgaard said.
“This was not an easy deal for them because it’s not a new business and it’s not really an expansion, either,” he said. “It was tough for them to find the right hole to put the peg into, but we were able to get the deal done.
“We didn’t cleanly fit into any of the SBA boxes, and we were right up against the cap in SBA lending limits,” he added.
Utgaard expects revenue to increase roughly six-fold due to the added amenities and the kitchen and bar offerings. The old facility only offered light snacks, mini golf, and a virtual reality experience. Adding anything else always bumped up against constraints from the track layout, as well as lease covenants that prevented bringing in certain amenities, such as an arcade.
“There’s absolutely more risk, but based on the results of the old facility, the market and the location, we feel pretty confident about our projections,” Utgaard said. “The opportunity is much greater here.”
Location was a primary consideration in Need 2 Speed’s relocation, Utgaard noted. The new facility has signage visible from Interstate 580 and is located in a bustling retail center. The site was formerly home to a Walmart that closed in the early 2010s after the company opened a new Super Walmart on East Second Street.
“Here, we are prime time,” Utgaard said. “It’s one of the five busiest intersections in the city. When the opportunity came about, it was just easier to come here and expand.”
Improvements at the new facility were delayed as Utgaard worked to get approval from the City of Reno for the kart racing track. Ultimately, Utgaard said, the track underwent extensive re-engineering to add steel shear bracing and oversized steel plates wherever support posts are bolted to the floor. Costs for the additional work exceeded $40,000, he noted.
“It’s basically the strongest go-kart track in the country,” Utgaard said with a wry laugh.
Need 2 Speed opened with 21 new OLT Superleggero electric karts that were imported from Italy. The karts can hit speeds approaching 50 mph. Utgaard said there are three computers on each kart, plus two radio antennas, that track the position of the karts, which can be automatically shut down without any human intervention in case of an accident or spin out.
Reno-based Tim Milton Construction was the general contractor on the tenant improvement work. Need 2 Speed expects to employ a staff of 100 to 120 – the old location had between 15 to 20 employees.
“My management team is almost as large as the entire team at the old facility,” Utgaard said, “but none of this would be possible without our team.”