Stick a fork in New Orleans IndyCar race, it's done? (2nd Update)

UPDATE #2 The Lawsuit:
Andretti Sports Marketing Louisiana, LLC vs. Nola Motorsports Host Committee, Inc., Nola Motor Club, LLC, and Laney Chouest:

The $4 Million Grant:

and

Articles:
State fiscal cupboard bare but 80 NGOs seek $241 million; which campaign contributors will Jindal, legislators fund?
Is the Indy Grand Prix worth Louisiana’s investment?

Too much state grant money was used on track upgrades, organizer alleges
by ramon antonio vargas| rvargas@theadvocate.com
A contentious lawsuit has erupted between the two companies that put on Louisiana’s first IndyCar racing event this year

NOLA Motorsports Park President Kristen Engeron did not immediately respond to a request for comment Wednesday.

At this point, it’s not clear what impact the litigation might have on future Indy Grand Prix races in Louisiana.

Jefferson Parish officials have hoped the new event would spark an economic boom for a mostly undeveloped, 13-square-mile area at the West Bank end of the newly expanded Huey P. Long Bridge.

Joseph Bruno Sr., a lawyer representing the NOLA Motorsports Host Committee, the nonprofit entity ensnared in the lawsuit, insisted that the dispute would not halt future races. He said another organizer could be brought in if necessary.

“We … believe that this is a great racing venue and have high hopes that we can do it again," Bruno said Wednesday. “We trust that this will have no impact on future racing … at the track."

Last year, the track negotiated for Andretti to bring a full-fledged IndyCar race to Louisiana for the first time. As part of their agreement, NOLA Motorsports created the nonprofit group to receive $4.5 million from the state to fund improvements at the track.

Andretti signed a three-year contract to organize the Grand Prix beginning in 2015; the agreement said only $2.6 million of the state money would be used on track upgrades. Andretti said it was assured there would be enough money left over to compensate it for all of its services.

Instead, the lawsuit claims, $3.4 million of the state grant ended up being spent on improvements, leaving Andretti and other vendors short.

The lawsuit adds that Andretti had to put up with undue meddling from Chouest and “horrific" weather to successfully pull off this year’s race, which drew several thousand spectators on the same weekend as the popular French Quarter Festival in New Orleans.

Andretti said that as of Tuesday, the company was still owed $645,000 by track officials, a sum that doesn’t include future amounts due under the organizer’s contract. Andretti said it also has not been reimbursed for $206,000 worth of expenses approved by track officials.

The company said it met with Michael Sherman, a representative for NOLA Motorsports, on April 29 but was told “categorically that no further payments under the agreement" would be forthcoming.

According to the lawsuit, Sherman said the nonprofit holding the grant money was “nearly insolvent, and that any remaining capital would be used to pay vendors who could potentially place a lien" on the track.

Andretti’s lawsuit accuses officials of NOLA Motorsports Park of various misdeeds, including breach of contract, fraud, unjust enrichment and unfair trade practices. The organizer seeks both incurred and future damages.

Andretti President John Lopes did not immediately respond to a request for comment Wednesday.

Bruno said this isn’t the first dispute with Andretti. Prior to the race, the Host Committee sought an injunction against the company, which was withholding ticket-sale receipts, Bruno said.

“We resolved it amicably and are frankly a little surprised" at the new lawsuit, he said.

06/30/15

NOLA appears to be 'one and done' for IndyCar, the latest in a long list of failed events due to loss of fan base after Tony George's destruction of the sport when the IRL was created.

Another company has gone to federal court and sued the racetrack that hosted Louisiana's first-ever IndyCar racing event in Avondale earlier this year.

About two weeks after race organizer Andretti Sports Marketing sued NOLA Motorsports Park and its affiliates for allegedly making false assurances that there would be enough state grant money to help compensate the company for its services, a subsidiary of the Swiss construction company Nussli – which installed and removed the grandstands at the Indy Grand Prix of Louisiana in April – made similar allegations in a lawsuit filed Monday in federal court in New Orleans.

The more recent dispute could cast further doubt on the future of a race that was facing uncertainty following Andretti's lawsuit.

Nussli claims that it has not been paid any of the $358,600 it is owed for the labor, materials and other services it gave to the race. That sum is in addition to the $851,000 or so in compensation and reimbursements Andretti says track officials owe it for its role in putting on the grand prix.

Like Andretti did in its lawsuit, Nussli traced the problem to NOLA Motorsports' alleged mishandling of a $4.5 million grant it received from the state to fund improvements at the track.

After setting up a nonprofit to collect the grant, NOLA Motorsports told contractors and vendors it was striking agreements with to put on the race that only $2.6 million of the state money would be used on permanent track upgrades, the lawsuits from Nussli and Andretti said. However, NOLA Motorsports spent $3.4 million of the grant on track improvements, leaving Nussli, Andretti and others short.

Echoing Andretti’s lawsuit, Nussli said track owner Laney Chouest assured the plaintiffs that there would be enough money between the grant and his own finances to pay them for their work.

"At all relevant times, (the nonprofit that received the grant) was undercapitalized, inadequately capitalized, and … was insufficiently funded, and had insufficient capital to support its operations," said Nussli's lawsuit, prepared by New Orleans lawyers Ashley Belleau and C. Byron Berry Jr. “Chouest … actually intended to only fully pay those contractors who made improvements to his race track or who had ongoing relationships with Chouest or who had the ability to place a lien on NOLA Motorsports Park."

Similar to Indianapolis-based Andretti, Nussli seeks damages, accusing NOLA Motorsports Park of breach of contract, unfair trade practices, unjust enrichment and other civil violations.

A lawyer representing the nonprofit that received the grant to improve NOLA Motorsports Park could not immediately be reached for comment. The lawyer, Joseph Bruno Sr., has previously said future races at the Avondale racetrack were not in jeopardy, in his opinion.

Andretti has declined numerous times to speak about whether it intends to organize future races at Avondale.

When it was announced that Andretti had agreed to organize the Indy Grand Prix of Louisiana from this year through 2017, Jefferson Parish officials hoped the new event would kick off an economic boom for a mostly undeveloped area at the West Bank end of the newly expanded Huey P. Long Bridge.

But the grand prix's infancy has been a bumpy ride – and not just because of the lawsuits.

Rainy conditions during the inaugural race resulted in a crash-filled event. According to the Indianapolis Business Journal, drivers complained the course and supporting infrastructure was more adequate for racing at the amateur or club level. After the race, IndyCar racing team owner Chip Ganassi said on Twitter that he was “sorry" about how the event played out and that fans deserved a better show.

The race was also held on the same weekend as New Orleans' French Quarter Festival, which may have kept attendance from being as high as it could’ve been. The Indianapolis Business Journal cited an estimate that only 8,000 spectators were at the race, counting crew members and event workers.

Chouest built NOLA Motorsports Park for $75 million and opened it in 2012. He subsequently linked up with Indianapolis-based Andretti to bring an IndyCar race to the track and to Louisiana. The New Orleans Advocate

06/17/15

Rain kept the crowd small, therefore, everyone lost their shirt and now the lawsuits begin

A contentious lawsuit has erupted between the two companies that put on Louisiana’s first IndyCar racing event this year in Avondale.

The dispute could put a question mark next to an event that local officials hoped would become a regular attraction and spur development on the West Bank of Jefferson Parish.

A subsidiary of Andretti Sports Marketing, an event promoter based in Indianapolis, filed a federal lawsuit Tuesday against NOLA Motorsports Park, the company owned by Laney Chouest that built the $75 million track where the race was held in April.

Andretti, which is under contract to organize the Indy Grand Prix of Louisiana through 2017, claims it had gotten assurances from NOLA Motorsports that there would be enough state grant money to help compensate the company for its services.

That turned out not to be the case, according to the lawsuit, which alleges that the nonprofit entity set up by NOLA Motorsports to collect the grant money is now “nearly insolvent" and has prioritized paying off vendors who might be able to place liens on the track, rather than Andretti.