Organizers of the Baltimore Grand Prix auto race that debuted Labor Day weekend reportedly sold more than 100,000 tickets, thrilled spectators and gave city residents a gratifying boost in civic pride. But a report this week that race promoters are facing $1.6 million in unpaid bills has sent up the yellow flag for enthusiasts who want to see motor sports here. The Grand Prix's apparently dire financial situation calls into question not only how successful the 2011 race actually was but also whether there's a viable future for such events in Baltimore.
State and local officials expected the Grand Prix might lose money its first year. That's often been the experience of other cities as well. But they hoped to recoup the losses and turn a profit over the remainder of the five-year contract promoter Baltimore Racing Development signed with the city. Under its terms, Baltimore was supposed to get a $250,000 annual fee from race organizers as well as a share of any profits from the event if they exceeded 15 percent.
The disappointing numbers reported Thursday have put a damper on those predictions, however. The group missed a $470,000 loan payment to the Maryland Stadium authority, which put up $2 million toward preparations for the event, as well as a $50,000 repayment to its CEO's father-in-law.
In addition, race organizers are fending off a blizzard of lawsuits involving unpaid bills for various services, including one for $275,000 in fees from a lawyer who once represented the group and $350,000 from the company that put up the grandstands around the course. Since August, Baltimore Racing Development has been sued six times over unpaid bills, including twice in the last month.
The city has a substantial stake in BRD's survival not only because it hoped the Grand Prix would promote Baltimore as a tourist destination and create economic opportunities but because it has already invested $7 million in taxpayer dollars for infrastructure repair and other improvements. Much of the money went for resurfacing the streets on the course through downtown, which created terrific traffic snarls that inconvenienced businesses and commuters, and for police overtime to provide extra security during the event.
The latter costs were supposed to be reimbursed by race organizers, but Baltimore Racing Development's current difficulties have left the issue up in the air, along with most of the other up-front costs the city footed. Baltimore certainly should try to recoup as much of its investment as possible, lest it find itself in the position of Washington, D.C., which in 2003 was left holding the bag for a couple of million dollars in road and other improvements after its grand prix scheme fell apart after just one race. But under no circumstances should taxpayers should be called on to bail the race out. That would be throwing good money after bad.
This year's event proved that street racing can be held safely in Baltimore, that it can attract substantial crowds and a television audience, and perhaps even give a modest boost to local hotels and businesses. All that is to the good. But it may never be the "game-changer" Mayor Stephanie Rawlings-Blake boasted it would be, and officials must beware of getting any entangled in the race promoters' problems. If race organizers can't get their act together without further infusions of public funds, Baltimore would do better to cut its losses and move on.