Board of Estimates Approves Contract For New Grand Prix Organizers
By Tim Richardson
The Baltimore City Board of Estimates approved a contract with Race On LLC and Andretti Sports Marketing to run the Grand Prix of Baltimore for the next five years. The May 16 vote marked the second time during a three-month span that the city has chosen an organizer for the IZOD IndyCar race scheduled for Labor Day weekend.
J.P. Grant of Grant Capital Management is the leader of Race On, a Baltimore-based company that provides financial services to municipalities, and Greg O'Neill, owner of BMW Construction in Curtis Bay, Md. Race On LLC has contracted with Andretti Sports Marketing to run all commercial and operational aspects of the Grand Prix. Racing legend Michael Andretti formed Andretti Sports Marketing. Andretti's companies have previously resurrected race events in Toronto; St. Petersburg, Fla.; and Milwaukee.
The new contract was approved in a 4-1 vote, with City Council President Jack Young opposing the measure. City comptroller Joan Pratt voted in favor of the new contract, a change in her position from February, when the Board voted, 3-2, on the contract with Downforce Racing.
"J.P. Grant, his company is successful," Pratt told the Baltimore Business Journal. "I believe he is all in and will make the race successful."
The three other board members, who approved of both contracts, are Mayor Stephanie-Rawlings Blake and two people she appointed, George A. Nilson, solicitor, and Alfred H. Foxx, director of public works.
Tickets for the 2012 Grand Prix of Baltimore will go on sale on May 28 and be available via Ticketmaster and on the event's new Web site, RaceOnBaltimore.com.
In February, Baltimore City entered into an agreement with Downforce Racing to run the street race in 2012. But the company failed to meet several key benchmarks and the city ended the contract in late April.
But like the contract with Downforce Racing, the agreement with Race On LLC also contains key provisions. As the city endorses its third organizer of the race – Baltimore Racing Development organized the inaugural Grand Prix in 2011 -- adjustments in the agreement suggest officials are taking steps to ensure financial security and greater control for the city.
The contract with Downforce Racing included a ticket surcharge lock box, in which a $3 surcharge would be added to each ticket sold. The city would collect and hold the proceeds of the surcharge fee to offset the costs of city services provided.
But that item does not exist in the new contact. Instead, there is a city services/racing event fee in which Race On LLC will pay a flat fee of $350,000, due 30 days before the race. For 2012, the fee was due upon approval by the Board of Estimates. It increases by $25,000 each year of the five-year agreement.
John Lopes, president of Andretti Sports Marketing, said he thought Baltimore was a key location for IndyCar.
"We studied what was happening in Baltimore and looked at the finances," Lopes said. "Looking long term, we believe this race can be the crown jewel of both the IZOD IndyCar series and the Le Mans series."
Two immediate, and noticeable, moves Andretti Sports Marketing made were changing the name of the race from the Baltimore Grand Prix to the Grand Prix of Baltimore, and unveiling a new logo for the event.
Lopes said the goal of the name change was to provide a new brand and feel for the 2012 event.
"A lot of debate took place internally about the race name," Lopez said, "and we decided that we didn't want to focus on one series but have the event itself be bigger than anything else."
As for the logo, Lopes said the group wanted to design something that tied racing to something iconic about the city.
"People look to what’s iconic about every race," he said. "In St. Petersburg, the logo contains palm trees. Tall ships are a symbol of pride in Baltimore, so we wanted to develop a look and feel that representative of building an iconic event."
Lopes also said that the group felt putting Grand Prix at the front set up a better opportunity for a title sponsor, because it is constantly evaluating the overall branding of the event. The group already signed its first sponsor, CBS Radio, and Lopes said it had inked deals with three other large sponsors that will soon be announced.
"Andretti Sports Marketing brings a significant amount of motorsports experience to the event," IndyCar CEO Randy Bernard said, "and combined with locally based Race On, provide the right elements to produce a successful race weekend. "It's important that the promoter that holds our sanction for the Grand Prix of Baltimore produces a first-class event that will make the city proud."
It's estimated that the inaugural Baltimore Grand Prix had a $47 million economic impact on Baltimore, while attracting more 160,000 people. The city terminated its contract with Baltimore Racing Development, organizers of the initial race, Dec. 30, 2011, after the group failed to pay more than $1.5 million to the city.
To view the complete set of provisions in the new contract , click here. Check back next week for more about Andretti Sports Marketing’s involvement in the race and plan for finding success in Baltimore.
Posted May 17, 2012