Motorsports Events: Economic Engine or Source of Contention? | Sports Destination Management

Motorsports Events: Economic Engine or Source of Contention?

Jun 12, 2019 | By: Mary Helen Sprecher

Motorsports events can generate revenue, excitement and crowds. Unfortunately, they also tend to cause disruption when they’re not being held at a facility that was originally built to handle them.

Case in point: the Detroit Grand Prix, which just wrapped up its race weekend. The site of the IndyCar race is Belle Isle, an island in the Detroit River that has a history as parkland.

According to this article in CityLab, “the 982-acre park attracts an estimated 4 million visitors per year, who come for family reunions and weddings, to use amenities like the Anna Scripps Whitcomb Conservatory, and to enjoy the natural areas on the island’s east end that attract a number of migrating birds. But the Grand Prix—which has taken place on the island intermittently since 1992—complicates these pursuits for weeks during Detroit’s short summer.”

At issue with park enthusiasts is the significant logistical and ecological impact. Construction of the venue begins in April of each year (this year, it ironically began on Earth Day, April 22) and it takes up about one-third of the island for its nine-acre paddock.

Those in favor of the race say they have listened to the concerns of opponents and have made some key changes in an attempt to be good neighbors. An article in the Detroit Free Press notes that Grand Prix chairman Bud Denker told reporters that concessions included delaying the start of the build for the barrier walls along the waterfront, not closing the island’s main road until after the Memorial Day weekend; and delaying other construction until after the Daffodils4Detroit's annual festival ended near the end of April. The Grand Prix also donated 5,000 daffodil bulbs to be planted on the island.

Race proponents also cited a Grand Prix-sponsored report showing an economic impact of $50 million to $60 million. But a sports economist and local journalists have questioned the truthfulness of that figure, citing a section of the report that was not publicized:

“After accounting for regional income multipliers which track how much new spending is retained within the region after it is spent, it is concluded that $20.5 million ... will be retained locally as new income for local households, businesses, and government within the greater Detroit area,” the report actually states. 

In other words, they're saying there's a $20 million benefit to metro Detroit, not the $50 million to $60 million being claimed. And that, say the opponents is a huge difference – and a lie of omission on the part of race enthusiasts.

Beyond that, they claim the event causes a significant negative environmental impact and disallows free use of the park.

Compared to events in other parks, the Detroit Grand Prix “doesn’t pass the smell test,” Adrian Benepe, a former commissioner of the New York City Department of Parks and Recreation and senior vice president at The Trust for Public Land, told CityLab. “This is supposed to be a place where you get away from the noise and pollution of the rest of the city.”

Many motorsports events have formed lasting relationships with the cities on whose streets they are held. The Firestone Grand Prix of St. Petersburg opens the calendar year of IndyCar racing and has been a fixture in the Florida city since 2009. The Toyota Grand Prix of Long Beach has been running since 2008. Other IndyCar races, including street circuit races that are not currently active, are listed here.

Unfortunately, a lack of acceptance by the local population – and by extension, by local businesses and sponsors – can lead to the downfall of a race. In Maryland, another IndyCar race, the Baltimore Grand Prix, ran only from 2011 to 2014. In an article in NBC Sports, John Lopes, Andretti Sports Marketing president, noted there were multiple problems.

“Baltimore was an example of, whenever we were selling, it felt like we were outsiders. It was a case of ‘You’re not from here,’” Lopes explained. Additionally, there were scheduling issues; IndyCar wanted the event to end on Labor Day, but that date also saw Baltimore Orioles games at Camden Yards as well as football games at M&T Bank Stadium.

And, Lopes added, trying to divide the proceeds from the race was complex. “The big thing with Baltimore was that it was in three different taxation zones. Everyone took chunks out of the event.  There was state; county; the convention center had to take $250,000; the city had huge taxes, the fire department brought their stuff. So it was difficult for the event to gain any traction.”

Unpleasant, but it just compare it to the epic fail that was (or would have been, had it ever been produced) the Grand Prix of Boston. Originally planned for September of 2016, the race was cancelled with five months to go. IndyCar refunded $925,000 in race tickets in July 2016, the same month promoter and organizer Boston Grand Prix LLC filed for bankruptcy. In a court case against Boston Grand Prix, IndyCar was awarded nearly $4 million in damages, although it was doubtful the organization could the full amount from a bankrupt opponent. In fact, Boston Magazine notes, John Casey, the much-reviled CEO of the Grand Prix of Boston, received a lifetime ban from ever “directly or indirectly organizing, promoting, directing, managing, sponsoring, or providing services of any kind for any event to be held in the Commonwealth of Massachusetts that is open to the public.”

Ultimately, newspapers referred to the debacle as “the epic race in the Seaport that never was.”

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