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Baltimore Going Another Lap With The Grand Prix

By Tim Richardson

The checkered flag will again drop in Baltimore when the IZOD IndyCar series returns for the 2012 Labor Day weekend.

Charm City entered into a five-year agreement with Downforce Racing to run the Baltimore Grand Prix. The partners in the new group are Indianapolis-based contractor Dale Dillon, as well as Felix Dawson and Daniel Reck of Wilkes Lane Capital in Baltimore.

"Last year's racing event generated $47 million in economic impact for Baltimore, and proved very valuable in terms of positive media exposure for our city," Baltimore Mayor Stephanie Rawlings-Blake said. "We have worked hard to learn from past experiences to ensure that this new agreement is in the taxpayers' best interest and will bring a successful, world-class sporting event that Baltimore can be proud of for years to come."

The inaugural event had its issues. The city terminated its contract with Baltimore Racing Development, the organizers of the initial race, Dec. 30, 2011, after the group failed to pay more than $1.5 million to the city. The group reportedly accumulated $12 million in debt and announced in February that it was dissolving without repaying investors.

Reck said there were multiple reasons Downforce Racing was interested in taking over the race.

"Felix and I live here," he said. "It's a great event for Baltimore and was fun to be a part of as a spectator last year. We feel we can build on what the previous organizers started and turn it into a profitable entity. We took a lot of time looking at it from a financial standpoint, and believe we can make it an even greater event over the course of time."

The city's Board of Estimates approved the new contract in a 3-2 vote. One member that voted against the deal was City Council President Jack Young, who supported the inaugural event but has voiced opposition to the race's returning in 2012.

The new deal does include provisions to protect the city from potential losses.

"The city had certain needs," Reck said, "as did we, and those were hashed out over the month we were negotiating. We would have liked to shift more of the risk to the city, but they weren't willing to do that. We feel good about the final agreement."

Downforce Racing's challenges begin immediately, as it has less than six months to organize the race.

"The good news is that there is already a path," Reck said. "Dale came in late with last year's organizers to try to help, so we feel good as we know what the tasks are, and are presently prioritizing and allocating responsibilities. Our biggest challenge is timing, and what we missed in terms of sponsorship. But we have extremely low expectations for sponsorship revenue in our first year."

Reck said Downforce Racing was confident it could sustain the event during the length of its contract.

"Our No. 1 asset is having Dale and his team involved from the start and with us through the finish," Reck said. "He has done this before and has proven his ability through managing several successful road races. Dale is a huge part of our confidence."

Dillon Racing LLC helped manage Grand Prix races in St. Petersburg, Fla. and Toronto.

Unlike its predecessor, Downforce Racing doesn't require as much outside capital, because principals are funding the project themselves.

"We think opportunities to really make money come after we show we can run a clean race in 2012," Reck said, "and lower the risk factor for sponsors for 2013 and beyond."

The IZOD IndyCar series seemed certain the race would return, because Baltimore was always included on its 2012 schedule.

"IndyCar is extremely excited about returning to Baltimore in 2012," said Sarah Davis, senior director of business affairs for IndyCar. "We are grateful to the mayor and her staff, as well as the residents and businesses of Baltimore, for their support of the event, and are confident in the ability of Downforce Racing to conduct a successful event."

Baltimore is a prime location for IndyCar, because it provides access to the Mid-Atlantic region. Organizers estimated that about 160,000 fans attended the 2011 event.

Neale Osenburg of Towson was one of those fans.

"I think the event was great for Baltimore," said Osenburg, who grew up in a racing family and has raced in the SCCA Formula 500 series. "The whole town was talking about the race all week long. I know there were a lot of detractors, but I think the event overshadowed them."

Osenburg said he's glad there's new leadership.

"It seemed the initial organizers were really in over their heads in respects to running an event of this size," Osenburg said. "As a spectator, it was nearly impossible to get from one point on the track to another. There were multiple times we had to exit the entire event, walk all the way around, and re-enter at another point."

Downforce Racing has the benefit of learning from the startup issues encountered with the inaugural race.

"We have a path as to what the weekend needs to look like," Reck said, "and will look to improve a number of issues, from signage to spectator flow."

Time will tell whether the Baltimore Grand Prix reaches Victory Lane, or sputters out on pit road.

Click here to view a draft of the agreement between Downforce Racing and Baltimore City, including the key provisions city officials outlined.

Issue 171: March 2012