Long Beach, Grand Prix Begin Negotiations to Keep Annual Race in City Long Term

Contract negotiations have begun to keep the annual Grand Prix of Long Beach in the city past the 2018 expiration of the current agreement. Photo by De'Niro Pankey.

The City of Long Beach will enter into an exclusive negotiation agreement with the Grand Prix Association of Long Beach (GBALB) to hammer out a new five year contract to keep the city’s annual Indy Car race in Long Beach.

A unanimous vote by the council now launches city staff and the GPALB into a negotiation window that could last up to five months while the logistics of next year’s race and beyond are figured out. The Grand Prix Association won the bid over World Automobile Championship of California (WACC), a Formula One racing company that sought to bring back that form of race to the city for the first time since 1983.

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Formula One and Indy Cars are comparable in size and speed with Indy Cars topping out around 235 miles per hour and Formula One at around 200 miles per hour. Formula One cars have more horsepower on average than Indy Cars and use racing grade fuel versus the ethanol blend employed by Indy Car.

The council previously voted 8-0 in 2014 to extend the association’s contract with the city through 2018. Tuesday’s vote ensures that Indy Cars will continue to race through the downtown circuit, potentially for the next decade.

“It’s really important for us to make the commitment, and our commitment is that we will continue to operate a very fan-friendly family oriented festival here in this town, said GPALB CEO and President Jim Michaelian. “That’s our commitment to you, and to all the residents, that we’ll bring them an event that they can be very proud of.”

Under any new agreement reached, the GPALB will be pushed to reduce its current set up and take down times in preparation of the event to more closely meet what its competitor had proposed. Currently the association begins construction 60 days prior to the annual race and tears down temporary installments within 17 days after race day.


 

The proposal from WACC limited construction and tear down to 60 days total, with construction beginning 45 days prior to the event and 15 days after the event to clean up.

It will also require the Grand Prix Association to cover any costs related to cleaning streets and removing tire marks left over from the race weekend as well as provide an economic impact study to the city to demonstrate the benefits the race has on the city. It will also pay a race fee and any reimbursements or lost revenues due to the city as a result of the race.

The 2018 installment of the Grand Prix of Long Beach is scheduled for the weekend of April 13.

When the next race would take place in the city was a major breaking point in city staff picking the association over WACC’s bid to bring Formula One back to Long Beach, as WACC’s proposal stated it could not put on a race event until 2020 while the GPALB would be able to provide seamless race planning beginning in 2019.

Some of this was due to the association’s already having a permit from the California Coastal Commission through the next four years, and some to do with Formula One cars necessitating a change in the track’s layout to provide more room for them and to install a permanent pit structure which would help with setup and teardown time for the annual race, but city staff said it would also result in long-term loss of development opportunities at the race site.


 

According to numbers provided to the city through the bid process the association claims that the economic impact to the city “could be $40 million.” That figure is based on adjusted numbers from a report completed in 1997 which is currently unavailable.

WACC claimed a $100 million impact on the region but did not provide proof of that figure noting in its response to city staff that “it has not been possible to secure an economic impact study for a Formula One race event in Long Beach.”

Tuesday night’s vote does not finalize a contract, only locks the city into exclusive negotiations with the GPALB to design a new long-term contract with the city. The five-year contract would come with a city option to extend it by five years at the end of the contract that is currently being negotiated. Once drafted, the finalized contract will be brought before the city council for final approval. 



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