September 13, 2007

Grand Prix to leave San Jose

Construction cited as the cause

By Carol Rosen
Editor

Rumors that the San Jose Grand Prix would no longer be held in San Jose were confirmed on Sept. 11 by the city, Mayor Chuck Reed and in a released statement from Grand Prix organizers.

The organizers cited commercial and residential development in and around the 1.5-mile downtown track that would “continue to limit the options available to the Grand Prix for revenue growth and expansion. In addition to new housing developments on Balbach Street [the race straightaway] and the impact on its residents, race organizers were faced with the loss of its main grandstands on Almaden Boulevard due to upcoming construction in the Boston Properties lot,” the release said.

While there was no definitive word, it appears the race will now be held at the Mazda Raceway Laguna Seca in Monterey County.

In addition to pending construction in the Boston Properties lot, the city also reduced the subsidy amount for the race. In December 2005, the city council pushed through a $4 million subsidy to the race for 2006 and 2007. This year, citing budget constraints, the council had voted to provide a $600,000 subsidy.

Sorry to see it go
Reed told a small group of reporters, “I’m sorry there won’t be racing in San Jose next summer. It was a lot of fun, even though I didn’t want to spend $4 million on it [initially],” he said in a hastily called news conference.

“We had a lot of different people coming in to see it and the publicity was great for the city but we have a busy summer with other activities,” he added.

When asked if the city’s $600,000 subsidy was not enough, Reed declined to speculate and suggested to reporters to talk to race organizers. “We’ve been getting revenues of about $600,000 a year out of it from hotels and so forth, that’s what the city is putting into it.”

“I didn’t think the economic benefits overall added up to $4 million for the two years. I would have been supportive for $600,000,” Reed added.

Reed said, in a statement, that while he had “raised questions early on about the approval process and the amount of city support for the Grand Prix, the race has been a world-class event and brought thousands of visitors to our downtown. The San Jose Grand Prix will be missed by its many fans.”

Construction issues
"The reality of racing on a temporary street circuit is that change happens continuously and this is especially true in a dynamic and growing city center like downtown San Jose," said Grand Prix President Dale Jantzen. "Development is good for San Jose but in this case, bad for the Grand Prix. We have not found a way to replace the loss of one of our primary revenue sources, the Gold Grandstands on Almaden Boulevard."

"Boston Properties is set to undertake some major developments in the area and that means the San Jose Grand Prix is no longer viable in its current location and will not operate in 2008 or beyond," Jantzen added.

Race organizers reiterated in a released statement Reed’s assertion that the race brought San Jose national and international attention.

“The Grand Prix provided the city of San Jose with world-wide exposure as part of the Champ Car World Series. Broadcast nationally and internationally, in each of its three years the race attracted well over 100,000 fans for each event. In addition, the city of San Jose estimated that the economic impact to America's 10th largest city was approximately $70 million over the three-year period.”

The city’s Office of Economic Development cited that more than 300,000 fans attended the race over its three-year span, filling 28,000 hotel room nights. It was also televised in more than 170 countries. The city’s efforts to provide the effort necessary for such an event has attracted other events, such as the upcoming San Jose Rock ‘n’ Roll Half Marathon, according to Paul Krutko, head of the Office of Economic Development.

Krutko noted the race, “raised nearly $3 million for the nonprofit Canary Fund and raised awareness about the importance of early cancer detection.”

With the exception of the Grand Prix, the other 2008 summer events in San Jose remain, including the May 16-18 San Jose Classic, the June 4-8 ZeroOne art and technology festival, the Aug. 8-10 Jazz Festival and the Aug.30 to Sept. 1 Tapestry Arts Festival. Also, during the summer of 2008, more than 600 U.S. Olympic team members, coaches and officials will gather in the city in late July and early August for two-day stays prior to departing for the summer games in Beijing.

The Grand Prix promoters also thanked the fans and supporters that attended the three races and several companies within the community, such as Redback Networks, Taylor Woodrow, Bottomley Distributing (Budweiser) and Northern California Toyota Dealers as well as San Jose “for being a good partner and host.”