Boston GP will drown in red ink (Update)
The so-called memorandums of understandings — signed this week with city and state officials, and released yesterday — begin to flesh out the organizers’ tab for covering “any and all costs" of the three-day September event, including paying for $4.2 million in estimated costs by the city and up to $5.2 million in potential expenses at the Massachusetts Convention Center Authority.
But public officials also noted that it was just the next step. Race promoters still have to file safety and security plans, and Massport’s agreement, for example, calls for details by next month on how organizers will address their “impacted tenants."
MassDOT’s agreement — in which its estimated costs, when combined with the MBTA, top $1.75 million — is made contingent on the race completing a Massachusetts Environmental Protection Agency review.
A spokesman for the Grand Prix of Boston also said organizers are still working to land more sponsors. As of yesterday, they said they had 100 committed, calling it “rare for an inaugural event" of an IndyCar race. Their goal is 165.
“It’s going to be incumbent upon them," Gov. Charlie Baker said of race organizers. “They have a whole series of milestones on both fundraising, financing and construction and everything else to make this happen. And we and the city are in exactly the same position on this, which is: The costs associated with this need to be born by the sponsors and the operators, period."
The event is due to run Sept. 2-4 along a 2.2-mile course that weaves around the Boston Convention & Exhibition Center and through the Seaport.
It has faced opposition from a number of Seaport residents and the Coalition Against IndyCar Boston, which has pushed issues ranging from environmental concerns to noise levels.
Larry Bishoff, the coalition’s co-chairman, said, “They’ve got a lot of hoops to jump through and hurdles to cross — permits and reviews, and the environmental review in particular. This is one of the steps along the way. We still feel the way we did before. It’s the wrong location and the wrong time to drop a race down in the middle of the busiest section of the city." Matt Stout/Boston Herald
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| It appears IndyCar have egg on its face in Boston unless a huge title sponsor is found |
04/14/16 Organizers for the IndyCar race scheduled to zoom through the Seaport this Labor Day weekend would pay the city and state agencies more than $11.1 million to cover a range of expenses, including public safety, transportation and other costs, according to agreements they and officials inked this week. [Editor's Note: That is on top of the cost to erect the course and the sanction fee to be paid to IndyCar. Organizers will be in the hole $20 million before they even start. Unless they land a huge title sponsor this race will be one and done and IndyCar will have egg on its face again.]
Race promoters agreed months ago to cover "any and all costs" associated with the three-day event. But the total, spelled out in a series of memorandums of understandings released today and signed by the Grand Prix of Boston and public officials, is the first estimate of what the race would have run the public agencies, which includes covering work by Boston Police, Boston Fire, State Troopers and a range of other public outfits.
The Massachusetts Convention Center Authority's bill to race organizers alone stands at $5.2 million, including $2 million in "improvements" to Cypher Street and Fargo Street, plus another $1.2 million in food and drink costs "associated with lost rental income."
Meanwhile, the city of Boston would be paid $4.2 million, according to its 31-page agreement.
The biggest total — $3.08 million — would cover work by Boston Public Works and the city's transportation department, which the agreement said includes the cost "for design, bid (and to) build infrastructure in the event of default."
Boston Police costs were estimated to run roughly $524,500, while Boston Fire services would run just under $433,000.
Payments from the race organizers would go directly to the city and state agencies through what the agreements dubbed "force accounts."
They're not the only costs. MassPort would receive $1.1 million, including $346,000 to cover State Troopers providing crowd management, while the preliminary budget for services provided by MassDOT and the MBTA are estimated to run $650,000.
The agreements comes months after race organizers and public officials had agreed to a letter of intent, in which IndyCar promoters say they would cover "any and all costs" associated with the event. At the time, both sides agreed to hold multiple meetings to hash out an agreement, in addition to a series of public meetings.
Promoters say they reached agreements this week with Boston, MassDOT, the MBTA, the Massachusetts Convention Center Authority and MassPort, in part ensuring that the Grand Prix of Boston "assumes all costs associated with the race with no burden to taxpayers," according to promoters.
John Casey, Grand Prix of Boston president, said in a statement that the agreements were "the culmination of a lot of hard work, coordination and leadership from all of the agencies involved."
The event is scheduled to run Sept. 1-4 along a temporary 2.2-mile course that weaves around the Boston Convention & Exhibition Center.
It has faced opposition from a number of Seaport residents as well as the group Coalition Against IndyCar Boston, which has pushed issues ranging from environmental concerns to noise levels.
Promoters say they still need to hash out "road improvement and traffic management plan," as well as details around transportation and safety and security. They said this week's agreements also established an "irrevocable letter of credit protecting the (city and state) agencies from any unforeseen costs should the race not occur."
Walsh signed a deal last year bringing the race to Boston for up to five years.
An aide to Gov. Charlie Baker said his office with the state agencies and the city to secure the agreements and "provide safeguards for taxpayers and residents."
"The administration will continue to coordinate with all participants on an event that will support Massachusetts’ tourism economy and expects organizers to meet all standard project construction and permitting requirements," Lizzy Guyton, a Baker spokeswoman, said in a statement.
Mayor Martin J. Walsh's office said he was similarly "encouraged" that race promoters are hitting the necessary milestones and requirements to put the race. "We look forward to the next step in the process," Walsh's spokeswoman, Laura Oggeri, said. Matt Stout/Boston Herald