INDYCAR CEO Randy Bernard has been working hard behind the scenes to save the Baltimore GP, but its problems financial must be resolved by the organizers. (LAT)
Baltimore officials threatened Monday to terminate the city's five-year contract with the organizers of the Baltimore Grand Prix if the group doesn't restructure and work to pay its debts to the city and vendors.
A recent economic analysis showed that the event has potential for growth after its first year, Kaliope Parthemos, deputy mayor for economic and neighborhood development, said in a statement obtained by The Associated Press. But Parthemos said Baltimore Racing Development must restructure immediately "to make that a reality."
"BRD must immediately restructure and recapitalize or sell itself to investors in order to make the event profitable in the future," Parthemos said. "BRD must also work immediately to pay debts owed to the City and taxes owed to the City and State by December 31, 2011, aggressively work to repay any debts to vendors, and present a restructured company and management team, or the City will terminate its contract with BRD."
BRD, which organized the three-day Labor Day weekend event, owes the city more than $1.5 million for city services provided, parking, admissions and amusement tax revenues, and a race event fee, she said. The city is asking to be reimbursed for $750,000 in city services. That's $250,000 more than a fee cap in the contract because it includes required services that BRD was supposed to provide.
The city said BRD is already speaking to the state Comptroller's Office, which collects taxes for local jurisdictions, about a payment plan for the $487,971 in taxes owed to the city. The city said no tax abatements will be made.
The Mayor's Office of Economic and Neighborhood Development held a $250,000 check for the race event fee it received from BRD on Sept. 4, with the understanding BRD needed to restructure cash reserves, but BRD still has not made the payment.
Organizers said they did not expect the event to be profitable in its first year, but former CEO Jay Davidson said the event showed that it could ultimately be profitable. BRD is facing lawsuits from investors and vendors. He believes the organization owes about $1.8 million to vendors.
The event 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. The IndyCar and the American Le Mans series headlined the event that also featured races from three other leagues.
IndyCar has already announced plans to return next Labor Day.
