The IndyCar racing organization joined city officials on Thursday in calling for change at the financially embattled company that runs the Baltimore Grand Prix, characterizing it as disorganized and saying it needs restructuring as it addresses unpaid debt.
Baltimore Racing Development, which ran the inaugural Grand Prix through downtown and around the Inner Harbor over Labor Day weekend, has been sued by a number of vendors and lenders alleging that the organizers have nearly $1.6 million in unpaid bills.
Another vendor, which erected concrete barriers and did roadwork for the race, said Thursday it is owed $200,000 — and if the bill isn't paid it may be forced to close.
Revelations about the extent of Baltimore Racing Development's debt have raised doubts about the company's ability to deliver on promises to bring the race back to the city next year, and have prompted calls for the company to right its finances and make internal improvements.
State Del. Keiffer Mitchell, a Baltimore Democrat who owns a 1 percent stake in the Baltimore Racing Development, said he is dismayed by what has happened at the company. Mitchell noted that he and other city officials, including City Councilman William H. Cole IV and Mayor Stephanie Rawlings-Blake promoted the event heavily and put their political capital behind the company.
"You didn't know who was in charge. There was a feeling of disorganization," Mitchell said. "There has to be some type of restructuring.
"A lot of people stuck our necks on the line for this event," Mitchell added. "To me, it's completely disappointing and frustrating. This has the potential to be black eye for the city. It would be a shame if this is just a one-year event."
Pete Collier, chief operating officer at Baltimore Racing Development, said that next year's race, also scheduled for Labor Day, is still on track and that the company will be in better financial standing by then.
"We have people who owe money to. We're not going to deny that," Collier said. "It was a huge, huge enormous task. Everything's going to be paid back."
Terry Angstadt, president of IndyCar's commercial division, expressed confidence Thursday that Baltimore Racing Development would be able to put on the Grand Prix again. He also said the company needs to be restructured but added that he knows changes are forthcoming, if not public yet.
Edie Brown, a spokeswoman for Baltimore Racing Development, said this week that Chief Executive Jay Davidson, who often served as the face of the Grand Prix, will be "changing roles." Collier said that Davidson would stay on as CEO but that his duties may change. Davidson did not respond to requests for an interview but told other media outlets he was no longer the event's CEO.
IndyCar has already announced that it plans to return to Baltimore next year. Angstadt said that while Baltimore Racing Development has endured its set of challenges, it put on a "world-class" event this year.
"I don't want to suggest this is a rose garden," Angstadt said of the company. "I'm pretty optimistic they're going to right their ship and we're going to have a race there next year."
The Baltimore Grand Prix sold 110,000 tickets and was hailed as a success by city officials and organizers, who said the event not only boosted tourism on a typically sleepy holiday weekend but also shed a positive light on Baltimore.
But two months after the race's end, Baltimore Racing Development has been sued in Prince George's County and Baltimore City Circuit Courts. One suit was filed by the vendor that erected the grandstands and claims it is owed $350,000. Another was filed by CEO Davidson's father-in-law, who claims the company didn't repay a $50,000 loan.
In addition, officials with the Maryland Stadium Authority say Baltimore Racing Development recently missed a $470,000 loan payment, forcing the quasi-public agency to dip into the company's escrow account.
A spokesman for Rawlings-Blake did not respond to requests for comment about Baltimore Racing Development.
Company officials have long said they never expected to turn a profit in the first year. Collier said this week that the company has received bills from 210 contractors involved with the race and paid back a "pretty fair percentage" of them. He vowed to make good on missed payments.
Meanwhile, Cathy Vogel, chief executive and owner of Sunrise Safety Services in Glen Burnie, said Baltimore Racing Development owes $200,000. Vogel's company, which employs 70 people, did sign work in addition to setting up the barriers and performing roadwork. She said the sign division of her company is largest minority-owned sign company in the state.
"It's very devastating," said Vogel, whose company has been in business for 16 years. "This is really a blow for us. We're going to have to consider closing because of this."
Collier said he planned to meet with Sunrise Safety next week to address their concerns. He acknowledged that his company owes Vogel money.
The company's missed payments are causing some to question whether it can meet other obligations, such as replanting trees that were chopped down to make room and improve sight lines for the Grand Prix.
"If the Grand Prix is so cash-strapped that they can't pay back the CEO's father-in-law for $50,000, I think there's a legitimate question about whether they are going to be able to meet those obligations," said David C. Troy, a software developer from Bolton Hill who filed a lawsuit but failed to get an injunction to protect the trees.
Baltimore Racing Development officials initially said they planned to remove 136 trees for the race but ended up removing fewer than 40. After the race, officials said they planned to plant 59 new trees along the course, plus 139 more around downtown in spots where trees are missing or dead.
Beth Strommen, the director of the Baltimore Office of Sustainability, said Baltimore Racing Development has 30 more days to get the trees replanted before it will be in violation of an agreement it signed with the city.
"As far as I know, everything is on track right now," Strommen wrote in an email.
Collier pledged that the company would get the trees planted and said it would be done "hopefully sooner, rather than later."
He said a report in The Baltimore Sun about the company's financial status has rallied supporters and businesses who have pledged to help the company's cash flow.
Paul Robinson, the treasurer of a community group, the Federal Hill Neighborhood Association, said Thursday after learning of the company's troubles that it was considering returning about $7,500 in "community impact" funds that the racing company paid in an effort to inspire other organizations to do the same. But Ryan Hada, the association's president, said the motion to give back the funds did not pass.
"There's nothing wrong with having the truth out there," Collier said. "We're asking people to give us a chance. Give us one more chance at least."
Baltimore Sun reporter Timothy B. Wheeler contributed to this article.
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