Grand Prix boosts some businesses, disappoints others

Profits and losses have yet to be counted. But among the businesses that had hoped to capitalize on the crowds at the first Baltimore Grand Prix, it's clear that there have been winners and losers.

Room bookings exceeded the expectations of some hoteliers, but left others disappointed. Business was brisk at some restaurants and bars, but the crowds bypassed others. The three-day event drew larger-than-usual crowds to downtown Baltimore on the ordinarily sleepy Labor Day weekend, but concerns about congestion seemed to chase some people away from the city.

City officials and race organizers planned to release initial figures on the economic impact of the inaugural event on Thursday.

A spokesman for Mayor Stephanie Rawlings-Blake said a "preliminary" read of the numbers indicates that the cost of extra police, public works and other services did not "greatly exceed the $500,000 reimbursement" that Baltimore Racing Development owes the city. The city received $6.5 million in federal and state funds for road repairs, two-thirds of which does not need to be repaid.

"What the numbers will show is with that investment, we will have had a significant economic investment that we otherwise would not have had," spokesman Ryan O'Doherty said.

Baltimore Racing Development had projected that visitor spending on hotels, food, entertainment and transportation would inject $70 million into the city and state economy in the first year.

Officials said the race drew more than the 100,000 visitors projected by Baltimore Racing Development. Race organizers estimated the three-day crowd at as much as 160,000.

But it was unclear on Tuesday whether those numbers had translated into the 58,000 hotel nights that organizers had projected — good, they predicted, for more than $12 million — or whether race fans had bought nearly 500,000 meals, estimated at another $12 million.

The InterContinental Harbor Court Baltimore, which charged higher rates and required guests to book a minimum of three nights, sold out on Friday and Saturday, and filled 70 percent of its rooms on Thursday and Sunday — better than the 50 percent occupancy rate for Labor Day weekend last year.

The hotel took in twice as much as expected in food and beverage sales, said John Stowell, director of sales and marketing.

But managers of the Best Western Plus Envoy on East Fayette Street said business fell short of expectations. The 49-room hotel was 90 percent full; they had expected to sell it out.

Still, said Katie Dang, an assistant to the general manager, "It was a very good idea that we bring [the race] into town so business can pick up during the holiday. Otherwise there would be no demand."

David Reel, president and chief executive of the Maryland Hotel and Lodging Association, said he had been hearing positive reports from association members, but little in the way of solid numbers.

"The general sense I'm getting is … they were pleased with the traffic," Reel said. "The key is what's going to happen next year. It appears now there is no question that this is a viable event. The real question is how much better will it do next year."

The impact on restaurants was similarly uneven.

The Chameleon Cafe in Lauraville reported record Labor Day reservations, and bookings were high all weekend at the Prime Rib in Mount Vernon. The Brewer's Art in Mid-Town Belvedere did sluggish business on Friday and Saturday, but was "bananas" on Sunday evening, assistant manager Megan Parker said.

But some of the restaurants that had the highest expectations had disappointing returns. Restaurateurs in Little Italy closed High Street to traffic, but the move drew little interest from visitors.

Business was down for Nick's Fish House. The Port Covington restaurant promoted a free shuttle to and from the event but found few takers.

"We had our worst Labor Day ever," said manager Theresa Shoemaker. "That really hurt us because this is traditionally the last weekend for crab season."

She blamed the television media for exaggerating traffic problems without offering alternatives.

The city, which is holding $750,000 from Baltimore Racing Development in escrow, will send a bill for its services within 45 days of the event, O'Doherty said. The organization is supposed to pay the bill within 15 days of its receipt.

Baltimore Racing Development is due to pay the city a $250,000 licensing fee, in addition to the $500,000 reimbursement.

A review of the city's "incident action plan," obtained by The Baltimore Sun, shows that Baltimore's initial estimates called for a minimum of 158 police and Fire Department personnel over the course of seven days, including the three for the event.

O'Doherty said that up to 275 police, fire, public works, and transportation workers were deployed at one time. He said city personnel costs would total "well under" a million dollars but declined to give a specific number, pending further cost analysis.

Before the event, the city announced that the cost of work to prepare the streets for racing had come in at about $6.5 million, less than the $7.75 million projected. The funds came from federal and state sources; the city must repay $2.75 million to the state.

Jay Davidson, president of Baltimore Racing Development, said the event was not expected to make money in its first year — and didn't. He likened it to a startup business that needs to spend money in its first year to make money in subsequent years.

"There was a lot of cost involved," Davidson said. "I can say with certainty we didn't make money this year. That wasn't our expectation ... we have shown that [Baltimore] is a viable market. And this can and will be a viable event."

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