The managers of Downforce Racing LLC say this year’s Baltimore Grand Prix will be better.
The group, chosen by the city to run the race through the streets of downtown Baltimore for the next five years, is led by Dale Dillon, an Indianapolis-based contractor, and Felix Dawson and Dan Reck, founding partners of Baltimore-based Wilkes Lane Capital LLC and former executives at Constellation Energy Group Inc.
Mayor Stephanie Rawlings-Blake announced Wednesday that the group would be taking over the street race, which was fraught with controversy after previous organizer Baltimore Racing Development LLC left the city with about $1.5 million in unpaid bills and accrued a total of about $12 million in debts, including to vendors who never got paid. The city terminated its five-year contract with BRD at the end of 2011.
The group still needs to get approval from the Board of Estimates. The contract will be presented to the board on Feb. 22. Though Rawlings-Blake called the race “a great opportunity for the city,” not all city officials share her enthusiasm.
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City Council President Bernard “Jack” Young’s spokesman said Young, a Board of Estimates member, will vote no.
Dawson was an investor in last year’s race, and Dillon was hired as general manager weeks before the event to help organize it. Dillon also has organized grand prix races in St. Petersburg, Fla., and Toronto.
The new deal includes protections to ensure the city receives taxes and fees it is owed, including a 10 percent admission and amusement tax placed in an escrow account. The city can also audit Downforce’s records at any time.
“There’s essentially no way that the city won’t receive payment for its services as well as the amusement tax proceeds,” Dawson said.
Rawlings-Blake said that the state comptroller’s office is going after the debts owed to the city by the previous organizer.
“We are aggressively pursuing all the taxes owed to the state, including the amusement and admissions tax that is owed to the city,” Joseph Shapiro, a spokesman for Comptroller Peter Franchot said Wednesday. “We collect them, but we pass them through to the local jurisdictions.”
He said the taxes were due in October 2011 and when they weren’t paid, the comptroller’s office in November filed liens against the officials of the corporation totaling nearly $470,000. Interest and penalties that have accrued bring the total amount owed close to $546,000.
Though the contract with Downforce Racing includes financial safeguards for the city, it does not have similar provisions in place for vendors, many of whom lost out when last year’s organizer failed to make payments.
“I didn’t spend the money, so I don’t know how anybody would expect me to pay it back,” Dillon said. “We’re moving forward with what we feel is a successful financial plan to pay everybody that’s involved.
“What we plan on doing is giving every opportunity to last year’s vendors to provide proposals on this year’s event, give them every opportunity to do business with us.’
But what’s working against the group is time. The event will once again take place over Labor Day weekend, which leaves less than seven months to put together sponsorships and vendors.
“We’re a little bit behind the ball on going after the main revenue sources of sponsorships and hospitality sales,” Dawson said. “If we didn’t think it was pretty achievable, we wouldn’t be here, but we do have a lot of work to do in a short amount of time.”
Part of the team’s confidence in its ability to run a successful event comes from their experience, they said.
“Where it’s going to benefit us is where you come into a community or a city, those relationships have already started,” Dillon said. “You know the faces, you know the names, you know the responsibilities. So it’ll make our job a little easier on pulling the race off on Year Two.”
Though they declined to name all of their investors, Reck said he, Dawson and Dillon are the key participants.
“It’s our hope that we can break even, or make some profit,” he said.
The race will be broadcast by NBC Sports Network.