Baltimore terminates GP group, seeks new organizers
City officials have terminated the contract of the troubled group that organized the inaugural Baltimore Grand Prix race and are seeking a new group to run the open-wheeled racing festival in the coming year, the mayor's office announced Friday.
|Despite a big crowd, GP organizers could not overcome typical high startup costs for a first year event|
The city ended Baltimore Racing Development's five-year contract because the company failed to meet the terms of the agreement, including paying a race fee and admissions and amusement taxes, officials said. The racing group owes the city more than $1.5 million in taxes and fees — a fraction of the group's $12 million in debts.
"BRD hasn't come up with a plan to demonstrate that they have the capacity to have a successful event next year," said Deputy Mayor for Economic Development Kaliope Parthemos. "They haven't come up with a plan to reorganize. They haven't come up with a plan to pay their debts."
Baltimore Racing Development officials did not immediately return calls seeking comment Friday.
Parthemos said city officials hope to find another group to organize the three-day festival, which is scheduled for Labor Day weekend. About 110,000 tickets were sold for this year's event and a report commissioned by the city showed that the race generated $47 million in economic impact.
"This event had a great economic impact on the city, and it was an event the citizens of Baltimore were excited about," Parthemos said. "It should continue."
The city's decision comes as the racing group's managers signed off on a deal that would award control of the company to Felix Dawson, a former Constellation Energy executive, according to sources close to the racing group. But city officials said that the change in leadership was too little, too late.
The racing group has been the target of at least half a dozen lawsuits from former employees and vendors demanding payment. The state comptroller's office has placed liens against the homes of the group's five managers and two executives in an effort to collect back taxes.
Parthemos issued an ultimatum to the group nearly two months ago, demanding both new leadership and a plan to repay the debts to the city.
Parthemos said that officials have been approached by "two or three" groups that are interested in organizing the race and have the funds and background to plan a major race.
"The circle of people who have the expertise and experience is very small, and we will only be having discussions with that group of people," Parthemos said.
Sources close to the racing group say that one of those companies is headed by Dale Dillon, a Indiana-based construction company owner who became the Baltimore group's general manager weeks before the race. City officials credit Dillon, who previously had organized IndyCar races in other cities, with pulling together the event.
Dillon declined to comment when reached by phone Friday.
Parthemos said the city would be able to avoid the time-consuming process of seeking bidders on the contract through the Board of Estimates and could directly award the contract to another company. The contract is considered a "professional service" and the city does not pay any money directly to the racing group.
A new group would need the approval of both the city and IndyCar to proceed. IndyCar executives were not immediately available for comment Friday. Baltimore Sun