BALTIMORE (AP) — Baltimore terminated its contract with the organizers of the Baltimore Grand Prix on Friday and opened the door to having another group continue the race in future years.
The city had warned last month that it would terminate its contract with Baltimore Racing Development after the first year of the five-year pact if the group failed to pay $1.5 million owed to the city by the end of the year. The city is interested in making the Grand Prix a yearly event, and it noted in a statement that it can now move forward with others that have expressed interest in organizing races.
While Friday’s move leaves Baltimore without an operator for the race, the INDYCAR series has already added a Labor Day event in Baltimore to its calendar for next year.
The inaugural event on Labor Day weekend drew about 160,000 spectators over three days to the 2-mile, 13-turn course on city streets that ran past the Inner Harbor and around Oriole Park at Camden Yards. IndyCar and the American Le Mans series headlined the event, which also featured races from three other leagues.
BRD was responsible for organizing and promoting the event, from bringing in fencing to line the course to selling sponsorships and tickets to fans.
Mayor Stephanie Rawlings-Blake said she had hoped BRD would restructure and start paying its debts by the city’s Saturday deadline, but the group’s leaders failed to take steps to put the company on a sustainable path.
“The Grand Prix generated $47 million in economic impact and proved valuable in terms of positive media exposure and civic pride for Baltimore’s residents,” Rawlings-Blake said. “The event, if conducted responsibly, has significant economic value to potential investors and the City this year and in future years.”
The state Comptroller’s Office, which collects taxes for local jurisdictions, filed a lien against BRD’s property last month for nearly $600,000 in unpaid taxes, and it was still in place earlier this week. BRD is facing lawsuits from investors and vendors.
Organizers had said they did not expect the event to be profitable in its first year, but former BRD CEO Jay Davidson has said the event showed that it could ultimately be profitable. BRD officials could not be reached for comment Friday.
INDYCAR respects the city’s decision and is optimistic that Baltimore will find a new promoter for the event, said Sarah Davis, senior director for business affairs at INDYCAR.
“We will do what we can to help the city identify who that is,” she said.
Sean Conley of West Tisbury, Mass., a founding investor in the group who recently filed a complaint in court seeking payment for the shares he sold back to BRD, was saddened by the news of the termination.
“I hope for Baltimore’s sake it can continue because it’s a great event,” Conley said. “I’m just sorry that the company that we founded couldn’t get it together.”
The Grand Prix can be a good investment if run properly, and Conley said he would be interested if he weren’t broke from his losses with BRD. But the city may need to adjust its stance, he said.
“City officials may have to restructure their expectations. No other community demands to be subsidized by the event,” he said. “Other communities give money.”
Copyright 2011 The Associated Press.