Baltimore city officials have threatened to cancel the five-year contract for the Baltimore Grand Prix, if the organizers of the IndyCar and ALMS street race event are not able to complete a restructuring that will enable them to pay their debts to the city and vendors.
Mayor Stephanie Rawlings-Blake (ABOVE) has been a strong backer of the Baltimore GP, which was run for the first time on Sept. 3-4. A recent economic analysis backed up her contention that the event demonstrated potential for growth after its first year, even though the economic impact fell short of projections in the event's first year, contributing $47 million in spending to the region – $23 million less than what had been expected, according to the Baltimore Business Journal. On Monday, however, the mayor's office joined the growing criticism of GP organizing group Baltimore Racing Development.
"BRD must also work immediately to pay debts owed to the City and taxes owed to the city and state by Dec. 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," Deputy Mayor Kaliope Parthemos said in a statement.
BRD owes the city more than $1.5 million for services it provided, parking, admissions and amusement tax revenues, and a race event fee, Parthemos said. The city is asking to be reimbursed for $750,000 in city services.
Six lawsuits have been filed against Baltimore Racing Development in recent months, with plaintiffs claiming the racing group owes them about $1.6 million. The event received some $6.5m in public funds to prepare the street course for the event.
Former BRD CEO Jay Davidson has already stepped down from his role, although he reportedly plans to remain with the company in an unspecified capacity.
Terry Angstadt, president of IndyCar's commercial division, told the Associated Press that he remains hopeful that BRD will resolve its problems.
"We certainly understand the position that the mayor is taking and we are still hopeful that those conditions can be met," he said. "We are very hopeful that restructuring will happen."