Entire state behind the
Houston Grand Prix
Houston GP track
After today's vote whereby the San Jose City Council
voted to put up $4.1 million to help the San Jose Grand Prix offset high
startup costs because they recognize the economic benefit to the city,
we thought you should see how clever Texas was to make the Houston
Grand Prix a reality.
The entire state of Texas is getting behind the effort
(now successful) to bring a major motorsports event back to Texas.
As it was explained to us, the Senate Bill below was
originally drafted with wording to try and bring the Olympic Games to
Texas. When that was unsuccessful, they re-worked it to bring the race
It provides for an incremental increase in the allotment
of tax funds to the organizer of the event to help offset costs. The
restaurants, hotels, rental cars, etc., are the ones who really reap the
economic benefits of the event.
Senate Bill 150
Effective September 1, 2005 Motor Sports Racing Trust Fund
The Motor Sports Racing Trust Fund is intended to attract and support
motor sports racing events, such as races by the Automobile Competition
Committee of the United States (the U.S. affiliate of the Federation
Internationale de l'Automobile), the Champ Car organization, and the
American Le Mans Series. The program is funded from the incremental
increase in state and local revenue from sales, motor vehicle, hotel,
mixed beverage, and alcohol excise taxes attributed to hosting the
racing event, as estimated by the Comptroller.
A preamble to Senate Bill 150 (written before the
bill was passed)
Grand Prix racing eyes Texas comeback Taking it to the Streets
In the 1980s and 1990s, Texas motor sports fans in Houston, Dallas and
San Antonio enjoyed a string of professional races on their city
streets. Colorful cars raced at speeds of up to 180 mph through
temporary street circuits as fans watched from hotel room balconies and
Local economies heard the cars' thunder. The San Antonio Grand Prix ran
every year from 1987-90 and brought a total of $55 million to the area,
said Craig Taylor, executive director of the San Antonio Grand Prix. The
Texaco/Havoline Grand Prix of Houston ran from 1998 to 2001 and had an
estimated annual economic impact of $30 million.
The races fizzled out, however, because they were too expensive to
produce, said Taylor. For the average street race, organizers install
about 6,000 tons of concrete blocks to line a 1.6-mile track, and
pedestrian walkways and fences to keep out debris. Advertising and
promotions can run production costs for a street race up to $5 million.
A bill by Sen. Jeff Wentworth, Senate Bill (S.B.) 150, aims to make
street races, or "temporary urban motor sports venues" as the industry
calls them, financially feasible for host cities and promoters, said
"By helping the promoters with the substantial costs of constructing a
temporary urban motor sports venue, S.B. 150 will make it possible for
major cities throughout the state to attract these world-class sporting
events," Taylor said.
A tourism trust
If signed by the governor, S.B. 150 would amend the state law that
supports events such as the Super Bowl, Major League Baseball All-Star
games and other major sporting events to include the Automobile
Competition Committee of the United States. The bill provides financing
for costs involved in bidding for and conducting motor sports racing
events in the state.
The bill would set up a Motor Sports Racing Trust Fund, which the Texas
Comptroller of Public Accounts would oversee. A city or county hosting a
street race would deposit into the trust fund any incremental increase
in revenue it receives from sales and use, hotels, motor vehicle sales
and rentals, and mixed beverage and liquor taxes attributable to the
racing event, said Melissa Guthrie, financial analyst for the
Comptroller's office. The state would match local deposits to the trust
fund and help reimburse the costs for hosting racing events.
"We're putting up a lot of money to put the race on, but if we can see
some revenue come back from those entities that benefit, it becomes more
plausible," said Taylor.
Three Super Bowls
While San Antonio benefited from millions of dollars spent by race
spectators on hotels, restaurants and parking, promoters bore the
majority of the cost of producing the race and lost $3 million over four
years, said Curtis Gunn, former chairman of the board of the San Antonio
"Without a huge subsidy from the city or somebody, you can't run a
street race," Gunn said.
Racing organizers point to successful annual street races in St.
Petersburg, Fla., and Long Beach, Calif., as models of how local
governments and race promoters can work together. The Toyota Grand Prix
of Long Beach, which ran in April, generates $20 million to $30 million
annually for the local economy.
Tim Mayer, chief operating officer of the International Motor Sports
Association (IMSA), said Long Beach invests in policing and public
services supporting the race and has benefited enormously as a result.
"The mayor has said that it's the equivalent of having three Super Bowls
in your city annually," Mayer said.
The perfect storm
Two auto racing sanctioning organizations that hosted races in Texas say
they want to come back. IMSA, based in Braselton, Ga., hosted races in
San Antonio and Dallas, and Mayer said Texas is "the perfect storm" for
"Texas has great weather at times of the year when other parts of the
country are snowbound," Mayer said. "It has a very attractive
demographic for companies involved in motor sports, and it's an
ethnically diverse state, which is also attractive."
Indianapolis-based Champ Car organized Houston's Grand Prix. Joe
Chrnelich, Champ Car's executive vice president, said Texas'
demographics, fans knowledgeable about street racing and corporate base
make it attractive.
Chrnelich said it's absolutely crucial for host cities to participate to
make a street race a success.
"The only way a street race event like ours works is when the city gets
together with our series and our promoter and says 'this is good for all
of us and let's make this a success,'" he said.
Street races may be expensive, but host cities say they're worth it.
Cities generally sign agreements to hold races for a minimum of five
years. Each race can generate millions of dollars for the area.
"They're revenue generators for the state, the city and the county and
they're not unlike a Super Bowl or a Major League Baseball All-Star
game," said Jordy Tollett, president and CEO of the Greater Houston
Convention and Visitors Bureau.
Each year it ran, Houston's Grand Prix drew 50,000 people who plunked
down an average of $750 apiece and generated more than $30 million,
"We'd kill to be able to set up some sort of ability for these things to
go on and on ad infinitum," Tollett said.
Street races also bring a city international media attention, Taylor
said. Television cameras capture cars zooming through downtown streets
against the backdrop of a city's skyline.
"In the case of San Antonio, the track passed over the Riverwalk and you
see the Alamo," Taylor said. "The entire telecast is a great big picture
postcard of the downtown area."
"It's two to three hours of international television coverage that says
'Brought to you from Houston, Texas,'" said Tollett. "That's advertising
That coverage makes Dallas want to host a street race again, said Tara
Green, director of sports marketing for the Dallas Convention and
"I would absolutely love to see those kinds of races come back because
of the media attention they attract," Green said.
Fiesta on wheels
When a street race comes to town, it's not just about cars. Concerts,
parties and lifestyle expos accompany the race, Taylor said. In the
April 2005 Long Beach race, celebrities including singer Meat Loaf and
actors Frankie Muniz and Patrick Dempsey got behind the wheel for the
Toyota Pro/Celebrity Race.
"You really get a carnival atmosphere," said Taylor. "In San Antonio,
(the race) was dubbed 'Fiesta on Wheels.'"
Taylor said he ran into little opposition when he coordinated the San
Antonio Grand Prix. He said one city council member voiced concerns
about traffic and thought the race might disrupt local businesses along
the route. But he said organizers never heard any complaints from
"If you solicit feedback from businesses and the community at the
outset, which we always do, you won't run into problems," Taylor said.
S.B. 150 applies to Texas counties with populations of more than 1
million. Bexar, Dallas, Harris and Tarrant counties meet the
requirements. At a March 21 meeting of the Senate Subcommittee for
Emerging Technologies and Economic Development, Sen. Eddie Lucio Jr.
said he wanted S.B. 150 expanded to apply to fast-growing counties like
Hidalgo and Cameron, but the bill was not amended.
Cristal De Los Santos, director of tourism for the Edinburg Chamber of
Commerce, said the area would welcome street races.
"We have a lot of racing fans in Hidalgo County," she said. "I know if
we could get a race, it would get a lot of visitors from the Valley."
Speed takes time
Mayer said IMSA has had discussions with officials in Houston and San
Antonio, and Chrnelich said Champ Car is talking with Houston, Dallas
and San Antonio representatives about coming back to Texas.
Even if S.B. 150 becomes law, it could be awhile before racing returns
to Texas streets.
"These events typically take three years to gestate," said Mayer.
"There's an old saying in motor sports, 'Speed costs money. How fast do
you want to go?' We'd love to have them tomorrow, but it's just not the
way the economics work."
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