Some of the vendors who got stiffed by the organizers of last year’s Grand Prix of Baltimore are giving the race — and its new management — a second chance.
The event has close to $1 million in contracts with businesses that took losses last year, said J.P Grant, president of Columbia-based Grant Capital Management and one of the owners of Race On LLC, which took over the event in May.
“We’ve tried to work with a good number of the companies that were involved in the race last year, and we’ve had varying degrees of success, and sometimes it came down to the terms of the offer, and sometimes it came down to the price,” he said.
Tim Conder, whose Baltimore-based company, Conder Inc., is constructing the race walls, concrete boxes, fencing and tire cushions, did similar work last year, but got shorted on the payment.
“Some people were asking me why I would do it again if I wasn’t paid last year, and I feel it’s a new group and it’s a big job for here in town, it’s a big event for Baltimore,” said Conder, who declined to say how much he lost.
“The name Andretti is a name I feel I can trust in the sports and racing community,” he said.
Race On, which is owned by Grant and Greg O’Neill of Baltimore-based BMW Construction Specialists Inc., hired Indianapolis-based Andretti Sports Marketing to run operations and promote the Labor Day weekend race. The company’s CEO is racing Hall of Famer Michael Andretti.
For Pierce Flanigan, president of Baltimore-based construction company P. Flanigan & Sons Inc., the decision to be part of this year’s event also wasn’t a difficult one to make.
“If someone wants to do road construction, we want to do it. I don’t have any bad history with these people,” Flanigan said, adding that the company is being more careful with the terms of its contract, which he expects will be finalized this week.
Last year, Flanigan’s company did road work over the light rail tracks that cut through the 2-mile track. It was to get paid after the event, but received nothing for the job. Flanigan also declined to say how much his firm lost.
His company also did road repairs along the race course, which was a larger contract with the city and was paid in full.
Baltimore Racing Development LLC operated the inaugural race, but the city terminated its five-year deal with the group at the end of 2011, after the organizers left the city with about $1.5 million in unpaid bills and accrued a total of about $12 million in debts, including to vendors that were never paid.
Downforce Racing LLC, led by two Baltimore financiers and an Indianapolis-based contractor, took over the race in February, but lost its five-year contract after failing to meet deadlines.
Race On and Andretti Sports Marketing entered into a five-year deal in May.
Timothy A. Mayer, general manager of the Grand Prix of Baltimore, said his team has controlled costs better than last year’s organizer.
“Because we have a lot of the capability internally on a lot of these items, we’re not paying for dozens of consultants to come help us do all of this stuff, which I know was a huge expense last year,” said Mayer, who has 20 years of experience in the racing industry.
Mayer’s team was also able to control costs by working with vendors it knew from previous events and by cutting the number of track-building days from 45 to 30.
The contract between the city and Race On gives the organizers a goal of 25 percent Baltimore-based business participation, and asks organizers to make an effort to include last year’s vendors.
Mayer said the company has exceeded the 25 percent goal, but in some instances has gone with different vendors.
For example, Upper Marlboro-based B&K Rentals and Sales Co. Inc., built the grandstands and hospitality suites for the inaugural race, but its bid for this year wasn’t chosen.
“I think Baltimore is a great home for this race,” said John W. Bunting, president and owner of B&K Rentals, whose company went unpaid last year.
His company filed a lawsuit against Baltimore Racing Development, and in December a Prince George’s Circuit Court judge entered a $284,437 judgment for his firm.
“I would have liked very much to have participated in it. If the door is not open though, you can’t open it,” Bunting said.
Instead, the contract went to Nüssli, an international company with U.S. offices in Miami and Indianapolis.
“That’s an example of a nationwide vendor with whom we have a longstanding relationship, but beyond pricing, they just operationally, we were more comfortable with them,” Mayer said.
“When we have like-for-like kind of bids, the vast majority of the time it has gone to local companies,” he said.
Despite cutting costs and signing more sponsors, this year’s race is not likely to be profitable. Organizers say that’s not a concern.
“We aren’t looking to turn a profit this year, but in 2013, we hope to be profitable,” Grant said.
Regardless, every vendor will be paid, and taxes will paid, said Grant, who has also pledged $20,000 toward replanting trees removed by the inaugural race’s organizers.
“This is just a gesture for goodwill to say we’re different, we understand how things impact the city,” he said.