Edmonton Councilors hopeful IndyCar event can pay off debt
Montreal’s Octane Motorsport Events signed a deal with the city to run the race here until 2013, and councilors said Friday the money-losing event might finally be turning a corner.
“The business community does seem to have really stepped up their game in terms of getting involved, and maybe it’s because they were concerned they were about to lose the Indy," said Coun. Kim Krushell, whose ward encompasses the City Centre Airport, where the Indy will run next weekend. “We’ve seen more connectivity in terms of marketing and in terms of having race week and all these activities. I’m really hopeful the marketing is going to pay off."
The Indy cost the city $12.5 million over three years. Northlands ran the event starting in 2008 with the condition the city would be responsible for any losses.
Last year, the city started negotiating with Octane Motorsports Events, which runs the Montreal Grand Prix and NASCAR.
In November, the city announced the race was cancelled after the two sides failed to reach a deal. Contracts were finally signed in January.
The city is providing Octane with $5.5 million in sponsorship and $1.5 million worth of police, fire, transit and other services over three years. The city also committed to a $3-million paving project so the race could go ahead at City Centre Airport.
The city will not cover any more losses for the race.
“The risk is all to the promoter now, and that’s a huge change from before where the risk was all to us," Coun. Ben Henderson said. “We have a three-year deal, we’ve committed our dollars, now it’s up to them to make it work."
Coun. Kerry Diotte said he hopes the Indy starts to pay off now that the “pros" at Octane have taken over.
“It should be an advantage to the city to have these recurring events. Those are the ones you really want. We just have to make sure that it gets on the financial straight-and-narrow."
Hotels near the track are fully booked and about twice as many guests are visiting from the United States than is typical, said Doug Shandro, past chairman of the Alberta Hotel and Lodging Association.
“There’s no other event that brings in people, consistently, from all over, like this one does," said Shandro, who is also with the Kingsway Business Association. Visitors shop, eat in restaurants and travel around Alberta, he said.
An estimate was released several years ago that the Indy injects about $80-million annually into the economy.
A fresh economic-impact assessment, perhaps at the end of three years, would be useful, said Coun. Don Iveson. The past estimate seemed “exaggerated," he said.
“We will be into the thing for close to $20 million, at that point, and before deciding to spend any more money in the future I think we’d need a really clear picture of what the return on investment to the city is," Iveson said.
The city would also need to find another location for the track if it continues to host the Indy, he said.
Octane does seem to be following through on plans to boost interest in the race, which included a redesigned track to make the event more exciting for both drivers and spectators, said Edmonton Chamber of Commerce president Martin Salloum. The attention Edmonton receives from hosting such international events is “extremely important," Salloum said.
“Edmonton suffers from an image problem. We know that," he said.
Organizers don’t release specific numbers on ticket sales. However, Edmonton Indy spokeswoman Tamara Fahlman said there was a “burst" of buying when tickets first went on sale in February. After a lull, sales have picked up again, she said.