By Julie Scharper, The Baltimore Sun
8:51 PM EDT, April 30, 2012
Just four months before high-speed cars are scheduled to race through downtown streets, the IndyCar Series is seeking a new team to take over the Baltimore Grand Prix.
IndyCar CEO Randy Bernard said Monday that leaders of the racing series "are currently visiting with some potential partners or promoters" who could put on the Labor Day weekend racing event. If necesssary, IndyCar would take over the management of the race directly, he said.
"The city and IndyCar continue to work together to ensure this event takes place," Bernard said in an email. "We are currently evaluating a couple different options and we understand that time is of the essence."
Downforce Racing LLC — the team city officials had picked to manage the race after the collapse of last year's organizers — has not begun marketing the event or selling tickets.
Downforce made no apparent progress toward meeting two rounds of benchmarks set by city officials. It failed to meet three of the five benchmarks set for March 15, including signing agreements with IndyCar and the Maryland Stadium Authority.
There is no indication that the group is on track to meet a May 1 deadline for other requirements, which include agreements governing other aspects of the race.
Mayor Stephanie Rawlings-Blake's administration has been tight-lipped about the most recent discussions; officials say only that they continue to work with Indycar.
"Discussions with IndyCar are ongoing and we are working closely with them reviewing all options," mayoral spokesman Ryan O'Doherty said Monday in an email. "No further comment at this time."
Councilman William H. Cole IV, a Grand Prix supporter, says time is running out to salvage the event.
"I think you're probably looking at a matter of weeks before it gets too difficult [for tickets] to even go on sale," he said Friday. "Time is not on anybody's side."
Sources close to Downforce say that the three members of the racing group — Indianapolis-based contractor Dale Dillon and Baltimore businessmen Dan Reck and Felix Dawson — are locked in a struggle.
Dawson and Reck, who are business partners in Wilkes Lane Capital, a Baltimore investment firm, want Dillon out of the group, according to the sources. Dillon, who owns a 50 percent stake of the company, has declined to leave.
Neither the Wilkes Lane partners nor Dillon responded to repeated requests for comment.
While Baltimore officials signed a contract with Downforce, Bernard pointed out that IndyCar never signed a contract with the company. Thus, it is free to craft a deal with a new group, he said.
"We have no sanctioning deal with Downforce, which allows us to sanction with the best partner," Bernard said.
Racing and sports-marketing experts say that plans for the race must be well under way by the end of May if the event is to succeed.
"I wouldn't call it fatal yet. It's still living," George Washington University sports-marketing professor Lisa Delpy Neirotti said of the race.
Since the race is listed on IndyCar's schedule, racing fans are aware of it even though they haven't been able to buy tickets, Delpy Neirotti said. Most tickets are bought in the 10 weeks before such an event, she said.
The biggest challenge for organizers would be landing a sponsor, since most corporate sponsors would want more than four months of exposure, she said.
"The sponsors are the problem, unless Indy has some sponsors that can add Baltimore to what they're already doing," she said.
Robin Miller, a racing analyst for the SPEED channel, said the end of May had to be "D-Day" for the Baltimore race.
"There has to be lead time for everyone involved," he said.
Miller said he believed IndyCar would go to great lengths to ensure the race happens.
"If IndyCar has to be the promoter, there will be a Baltimore race," he said. "I can assure you that they will spend what they need to spend."
Last year's event was heralded by drivers and racing fans as one of the highlights of IndyCar's season. The race along a 2-mile stretch of roads near the Inner Harbor allowed IndyCar to expand its presence on the East Coast, Miller said. Organizers sold 110,000 tickets to the three-day event, which one study concluded generated $47 million in economic impact for the city.
But Baltimore Racing Development, the organizers of the 2011 race, collapsed financially soon after the event, failing to pay contractors and state agencies. After the group did not pay $1.5 million in taxes and fees to the city, Rawlings-Blake's administration canceled the group's contract in December.
City officials then entered into exclusive closed-door negotiations with the team behind Downforce — Dillon, who had worked on previous Indycar races, and Dawson and Reck, former Constellation Energy Group executives.
Both IndyCar executives and city officials sang Dillon's praises, particularly his work as the general manager of Baltimore Racing Development in the final weeks before last year's race.
City officials hammered out a contract with Downforce that they said would allow them to closely monitor the group's progress and head off the financial problems wrought by last year's group. The contract specified two sets of benchmarks for the race organizers — an initial round to be met by March 15 and a second May 1.
Downforce has failed to meet three of the five milestones that were due March 15. The group has not settled agreements with IndyCar or the Maryland Stadium Authority, nor has it completed a ticket escrow deal with the city.
At least two of the documents are nearly complete but lack a crucial element — Dillon's signature — city and state officials say. Officials inititally attributed the delay to a death in Dillon's wife's family, but later acknowledged that the documents were not signed because of internal strife at Downforce.
Maryland Stadium Authority executive director Mike Frenz said Monday that Dillon had yet to sign the agreement with his agency.
"It's pretty clear now that … Dale might be out of the picture," Frenz said.
By Tuesday, the city contract requires Downforce to finalize agreements with the Parking Authority, the Convention Center and the Maryland Transit Adminstration. The race group also is supposed to present a safety and security plan to the city by that date.
City officials declined to say when or if they would take action over the missed deadlines.
When asked if there were a cut-off date for plans for the race, Rawlings-Blake said, "We're working on that" and declined to comment further.
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