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News Opinion Editorial

New Grand Prix deal is worse than the last

Mayor Stephanie Rawlings-Blakesays the new organizers she has selected for September's Baltimore Grand Prix — including a member of the legendary Andretti family — "have what it takes to move forward and make this world-class sporting event successful for Baltimore." Isn't that what she said about the last group of people she brought in to save the race? That the lead promoter, Dale Dillon, was a race-savior who would make sure everything went smoothly this year? (Unless, as it happened, he stopped talking to his Baltimore-based partners and dropped off the face of the Earth?) Are we supposed to trust her on this one a third time?

The new deal the mayor hammered out in secret with IndyCar officials is riskier than the last one, and its scheduled approval at the Board of Estimates next week comes awfully close to what sports marketing experts say is the drop-dead date for being able to pull off an event on Labor Day weekend. Michael Andretti's name sounds good on the letterhead, as does the promise that he can bring with him sponsors, marketing, ticket sales and other logistical support. But we've heard these promises before, and the way the mayor has handled this matter gives the public precious little opportunity to kick the tires of this new racing group before she and her appointees on the Board of Estimates make it a done deal.

But what we can be sure of is this: Every time the city gets a new group to run the race, the deal gets worse for Baltimore.

Last year, the city was supposed to be reimbursed for all of its expenses in putting on the race, except for its initial investment in bringing the streets around the Inner Harbor up to race quality. It spent $750,000 on police, firefighters and other public services to make the Grand Prix happen, not to mention millions in state and federal road construction funds to prepare the course. When the group that put on that initial event, Baltimore Racing Development, suffered a financial collapse, the city got none of that back. It didn't get its $250,000 fee or nearly $500,000 it was owed in admissions and amusement taxes. It even had to pay to replant the trees that were chopped down to improve spectators' sight lines.

This year, when Ms. Rawlings-Blake hand-picked a new group to take over the race, Downforce Racing, she pitched the deal as a lessons-learned contract. It required the city to be paid first and for taxes to be put in escrow. But this time, there would be no $250,000 annual fee and no guarantee that race organizers would cover the city's costs. A guaranteed $50,000 a year in impact funds for nearby neighborhoods was gone, too. Instead, the city was to get a $3-per-ticket fee to help cover its costs, and the neighborhoods got 50 cents per ticket. If attendance in 2012 matched that in 2011, Baltimore's cut would have amounted to about $330,000, or less than half of what it cost the city to put on the inaugural event. Baltimore was also entitled to 10 percent of the profits in excess of $1 million, but given the near-universal expectation that the race would be a money-loser in the short term, that didn't mean much.

The proposed contract with the team of Andretti Sports Marketing and Race On LLC (a new, locally owned firm) is substantially similar to the one with Downforce Racing, only a little less favorable to the city. Under this agreement, race organizers would pay the city a flat $350,000 fee up front, $50,000 of which would go toward neighborhood impact funds. The fee would increase by $25,000 a year during the five-year contract term, but that still would get the city nowhere close to covering its costs.

Perhaps we are supposed to be wowed by the Andretti name. Indeed, Mr. Andretti and his father, Mario, are practically synonymous with auto racing and have been involved with the sport for decades. In the mayor's news release, Mr. Andretti claims "a history of resurrecting races in cities such as Toronto, Milwaukee andSt. Petersburg, Fla." But the circumstance Baltimore finds itself in — 110 days between contract approval and race day, with no tickets sold, no sponsors and no marketing done — is somewhat unique. Mr. Andretti may be used to doing things fast, but this time, we're the ones taking a risk if he crashes.

The Board of Estimates should reject this deal. Twice bitten, thrice shy.

Copyright © 2015, The Baltimore Sun
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