Petrol-Head Paradise Bucks New Hotel Trends

One of the most impressive adaptive reuse stories this century you would have to travel a long way to beat is being played out at a disused mine in NSW’s Hunter region. The former Rhondda Colliery at Lake Macquarie, 25km west of Newcastle, is to become a mecca for cashed-up car enthusiasts ready to roar around an international-standard 5.25km racing track at the $95-million Black Rock Motor Resort. But the journey to breaking ground at the resort was anything but a smooth ride, managing director Tony Palmer says. After selling a digital marketing business co-founded with business partner Richard Gillis in the 2000s, Palmer turned to racing. “In my time doing racing and the track days, I saw an emerging trend happening around the world, that of the private driving resort,” Palmer says. There are about 20 private motoring resorts across the world. The pinnacle of racing luxury is the Circuito Ascari Race Resort in Ronda, Spain, followed by Germany’s Bilster Berg and the Monticello Motor Club in New York state. ▲ The Newcastle project includes a series of luxury cabins. Ascari features a 5.425km racing circuit designed and built by Klaas Zwart, owner of high-performance car manufacturer Ascari. “Ascari really caught my attention,” Palmer says. “It’s a brilliant idea; we have destination resorts for golf and skiing but not one for people who like driving fast cars, so I watched that with interest and in the past 10 years the idea has really taken hold across the world.” Alongside Gillis, who has spent his time developing industrial property in the Southern Highlands, Palmer embarked on an Australian first—turning a disused mine into an international-standard racing resort. Landing a site no mean feat Looking for land became a mission itself, Palmer says. “The permissibility of a project like this from a planning perspective ... it falls into a very interesting category,” Palmer says. The stars needed to align on a site that could support resort and racing infrastructure, finance for the project, and a willing council, which is what the Black Rock team found in the Lake Macquarie Council. ▲ The track is being designed by Tilke Engineers and Architects, global specialists in race track design. “Instead of a greenfield site, we had the idea to repurpose a brownfield site and what a great adaptive reuse of an old coal mine on a piece of land within a 90-minute pin drop of a major metro population base,” Palmer says. “So adventure tourism and driving experiences hit them in the crosshairs.” Opened in 1900, the colliery ceased operations in 1970 and had sat relatively empty since then—until Palmer pitched the idea to owners Yancoal. “We weren’t the highest bidder but we definitely had the best secondary-use story for the site.” Solving problems that had never existed Embarking on a four-year development application process in 2015 was not without its challenges. “We were pioneering something that’s not been done before in Australia and you ’ ve got to go above and beyond, and answer questions to problems that have not existed before.” The project received DA approval in 2019 but another obstacle presented itself. “Before we could start we had to get the mining license relinquished, we didn’t want to start and then find the mining company that owned the lease decided mining was a good idea again,” Palmer says. ▲ The engineering team has had to deal with subsidence mitigation due to the underground mine and the requirements of a racetrack. But relinquishing a mining lease to make way for another hadn’t been done in 75 years, Palmer says. “I had to learn a lot about state legislation around mine-lease relinquishment and work with the mining company on a very protracted and complex process of having it relinquished and closed forever,” he says. The team achieved it in 2023 and gained the keys to the kingdom in December of that year. “We now have a fully prepared site, tracks are cleared and we’re ready to start rolling.” Self-funding the only starting point Initially self-funded, Palmer has managed to attract considerable interest and investment now the project is on its feet. “A racetrack requires a huge amount of infrastructure to house a crowd that might not turn up more than once or twice a year,” Palmer says. “No one has that capital outlay usually, it’s economically unfeasible unless a government builds one and we probably won’t see one ever again in Australia.” Palmer estimates that 90 per cent of motor resort projects across the world are self-funded to a point. “To start any project that ’ s pioneering you have to self-fund. We’ve put a lot of our resources into it but now [we ’ re] working with a funding partner.” ▲ The first tranche of luxury villas in the project were released in May. Currently anonymous, the investor is a second-tier non-bank lender, Palmer says. “We’ve had to prove everything and some of it is hard to prove. All roads lead to valuations and we might be able to value the land but how do we value something that hasn’t been built before? “We can get advisory reports and put hypothetical numbers to it but no debt funder would have gone for that at the start.” So planning the resort infrastructure around the racetrack was key. “Once you put the resort infrastructure around it, it makes more sense, and there are enough global comparables out there now which do translate across markets,” Palmer says. “So we’ve had to take a considered, step-by-step approach, funding one piece at a time based on hitting metrics, whether that’s precommitments from users or presales of villas.” Driving hotel development While hotels proposals continue to pop up, they are more often than not a component in a mixed-use development—major standalone resort plays are few and far between. Pipelines expected to peak in 2026, reducing to a trickle thereafter, according to Colliers. Of the 7724 rooms under construction, new openings are skewed towards 2026 and 30 per cent will be outside core CBD areas. “We’re basically building resort infrastructure similar to a ski-in, ski-out village, with 64 private villas, a 40-room boutique hotel and 16 cabins as part of that offer,” Palmer says. Black Rock will also have a 500-seat function centre, 200-seat restaurant, a cafe and go-kart track as well as a private members lodge for villa owners and members. The first tranche of 16 luxury freehold villas, each with a $3.5-million price tag, sold out in the middle of last year. “Our customers are global travellers, they ’ re like avid golfers, they travel the world to do what they love,” Palmer says. It helps that major supercar brands are crying out for a track such as Black Rock, because driving a car is the first step to selling it. They’ll soon be able to do just that. “Things are moving very quickly after an incredibly long process to get there,” Palmer says. “But I enjoy a good challenge, taking a beginner’s mindset to most problems and not coming in assuming you know the answer. “We like to say ‘the obstacle is the way’, and we’ve lived by that throughout this project.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Petrol-Head Paradise Bucks New Hotel Trends

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