Possible trouble for San Jose race?

UPDATE In doing some investigation into why the taxpayers association objects to tax dollars being spent for the San Jose Champ Car race AutoRacing1.com has learned the following – They have no position for or against having a Grand Prix style race in San Jose because they have not seen enough information come out to take a position. What concerns them is the level at which the city participates. If the proponents can make a clear case for something of this nature, and if the citizenry are in agreement, then they feel the role of the city should be in enabling or expediting the process – not in becoming a co-investor in a risk venture. They feel that if the venture is expected to be wildly successful, then the promoters should cover the complete cost. They feel their city does not have a great track record in the manner in which it has subsidized what should be purely private enterprise projects – mismanagement of their tax dollars has long been the norm there.

They feel the RDA is an agency which should not exist – for many reasons. It drains funds from other services, it encourages the city to take actions they should never do which results in the stomping on property rights, and it ultimately bankrupts the city treasury, as is occurring in So Cal. So they don't think it is good policy to give large amounts of cash to Barry Swenson or any other developer through the RDA.

They feel it is not the place of a city to "invest" its funds in an exercise best performed by private industry. The Shark's arena was not a good idea from that standpoint. Any investment of this nature puts public funds at risk. They feel that as stewards, the city council has no business playing fast and loose with tax dollars. The arena is a good example – suppose the team had chosen to leave shortly after it was built? Would the city not have lost a whole lot of tax money on that venture? They feel that taxes are extracted by threat of force from citizens – and that it is incumbent on their elected officials to make absolutely sure it is used only for legitimate purposes. They feel Ice hockey, race events, etc. are private enterprises and should be financed by private individuals and companies, not government.

They feel that although the city of Long Beach may have benefited enormously from the Grand Prix – not every city that tries it has, noting Champ Car has left a number of failed events in its wake. Their position is that it's better to let private parties take the risk willingly rather than force the taxpayers to do so.

11/20/04 San Jose officials said Friday they have reached a tentative agreement to stage a grand prix car race in the streets surrounding HP Pavilion in July. The five-year deal with the race promoter — the Woodside-based Canary Fund, a non-profit corporation dedicated to early cancer detection — is being applauded by city officials who say the Champ Car World Series event could generate millions of dollars for businesses and the city treasury while raising San Jose's profile.

“It gets our name and our identity out literally across the world, so from that perspective, you can't buy better PR,'' said Councilwoman Cindy Chavez, whose district includes downtown. The race is contingent on the city council approving $650,000 to help shoulder the $3 million needed to prepare the course and pay for public safety services during the race, which could attract 120,000 people downtown. The promoter will be responsible for funding the remaining $2.35 million.

The proposal is scheduled for the council's Dec. 7 agenda, said Mayor Ron Gonzales' budget and policy director, Joe Guerra. “We're optimistic about getting this thing going,'' said Canary Fund President Dale Jantzen.

The $650,000 investment request comes just weeks after city officials announced San Jose was facing a $60 million budget shortage next year. However, Guerra said the money being proposed would come from funds that don't finance city services.

The proposal calls for tapping $250,000 from a redevelopment agency business grant fund and $400,000 from a city Office of Economic Development fund dedicated for small business loans, Guerra said. The plan calls for the city to be repaid with race revenues.

The agreement to hold races with the Canary Fund — founded by former Cisco senior executive Don Listwin — would end after five years with an opportunity to renew for another five years, said David Vossbrink, the mayor's spokesman.

The agreement, reached Friday morning, ends six months of negotiations between the Canary Fund and city officials, who say the July 29-31 event could nourish cash-strapped downtown businesses and pour $10 million to $20 million in local sales-tax revenue into the treasury.

“Revenues generated by the event will bring real economic benefit to our community and local businesses,'' Gonzales said in a news release. But others, such as the Silicon Valley Taxpayers Association, aren't sold on the race being financed with public money. “There is a more critical need for the money and higher priorities,'' association president Dennis Umphress said. “I think it's inappropriate for the city to be in the racing business.'' Association board member George Swenson said he didn't trust the city's revenue projection. “I would believe their estimates are overly optimistic,'' he said. Excerpts from Mercury News