Former Baltimore Grand Prix group pays tax bill
The payment comes as the city prepares for this year's three-day open-wheel racing festival from Aug. 31 to Sept. 2, which is being organized by a new group of local investors and racing promoters.
Baltimore Racing Development put on the inaugural IndyCar racing festival over Labor Day weekend last year. City officials expressed confidence in the racing group in the lead-up to the race, but soon afterward acknowledged that the group had fallen behind in hundreds of thousands of dollars of payments to the city and state. A spokesman for Mayor Stephanie Rawlings-Blake said Baltimore Racing Development had still not paid the $750,000 for city services such as fire and police protection during last year's race, nor had it paid $50,000 to the city parking authority for the use of garages during the race.
"The city has not received payment of city services and fees but reserves the right to pursue legal action," spokesman Ryan O'Doherty said.
O'Doherty noted that under the city's agreement with the new race organizers, the 10 percent admissions and amusement tax levied on ticket sales would automatically be placed in a restricted account, guaranteeing the proceeds would reach the city.
The new group, Race On Baltimore, was required to pay $300,000 for city services under its contract and has already made that payment, O'Doherty said.
Caron Brace, a spokeswoman for state Comptroller Peter Franchot, said Baltimore Racing Development has completed payments on its $567,000 bill, which included admission and amusement taxes, sales taxes, and late fees and penalties.
The comptroller's office had placed liens on the homes of several of Baltimore Racing Development's leaders, which will now be removed.
"The lien release has been submitted to the court," Brace said.
Internal documents obtained by The Baltimore Sun last year indicated that the racing group had $5 million in debts at the time and would owe investors an additional $7 million over the next four years if the race were to continue.
The city severed its contract with Baltimore Racing Development in late December after the group failed to meet several payment deadlines. The city then entered into a new contract with Downforce Racing, a group headed by Baltimore Racing Development's former general manager.
That deal soon fizzled, and the city crafted an agreement with Race On Baltimore in the spring. Columbia financier J.P. Grant, a top donor to state Democrats, including Rawlings-Blake, and local contractor Greg O'Neill head the team. A marketing group led by racing champ Michael Andretti is collaborating on the race.
Jay Davidson, the former chief executive of Baltimore Racing Development, said he was "glad we were able to raise the money and pay off the debt."
Davidson said that the group had also paid a $250,000 track use fee to the city and $900,000 to the Maryland Stadium Authority for a race-related construction project in a Camden Yards parking lot. He said he did not know whether the group had paid its other debts to the city. Baltimore Sun