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Miami requests state aid

NEWS STORY
20/07/2018

Though a vote on the race scheduled for this Thursday has now been postponed until after the August recess, it has been revealed that the City of Miami has already called on the State of Florida to give financial assistance should the event get the all-clear.

According to Forbes, the Host City Agreement between F1, the City of Miami and race promoter Stephen Ross states that "the City shall credit the Promoter each year commencing in October 2019, for One Million Five Hundred Thousand and no/100 Dollars ($1,500,000) of City Services (the 'VIK Cap').

"Beginning in 2020 the VIK Cap shall be increased by three percent each year, on a compound basis. In 2018 the City shall credit the Promoter Seven Hundred Fifty Thousand and no/100 Dollars ($750,000.00). The VIK Cap shall be used to pay for the City Services requested and agreed to in writing in advance by the Promoter".

As previously reported, in what might well be a blueprint for the sport moving forward under its new owners, the proposed Miami Grand Prix would be promoted by F1 itself in partnership with Ross, the billionaire owner of the Miami Dolphins.

The deal would mean that the City of Miami would not be liable for the usual hosting fee, which averages $30.4m annually, and would only be liable for covering certain costs including "solid waste disposal services... technology services (eg, fibre connections, broadcast cabling, etc)... all necessary police, fire rescue and traffic control services".

However, in reference to the VIK Cap, the City of Miami is looking to the State of Florida to cover the costs, an agenda item tabled for July 26 by Miami Commissioner Joe Carollo calling for a vote on "the Miami City Commission urging Governor Rick Scott and the Florida legislature to make funding available to support the Formula 1 Miami Grand Prix; directing the City Manager to make the finding of available state funding a legislative priority".

It is because F1 is so keen to expand the sport in America that its new owners have been pushing hard to make Miami work, and aware that the city does not need a Grand Prix to attract tourists has opted to drop the usual hosting fee.

Indeed, the city won't even be liable for the cost of transforming its streets into an FIA approved race facility though it will "allow the GP Parties to use the Premises on a rent free basis in connection with each Event... In addition the City shall grant the GP Parties such access to the Premises as may be reasonably necessary for construction of the Improvements contemplated... beginning not later than six (6) months prior to the Event".

In addition, the agreement reveals that an exclusion area, known as the 'clean zone', will be established by the City two weeks before the race and will remain in place until one week after.

Interestingly amongst other things, it will prevent "the sale of goods, wares, and merchandise by peddlers, itinerant vendors and any person who has been issued a permit for pavement vending".

We say "interestingly", because when Formula E visited in 2015 the race had a negative impact on local traders and vendors.

In the wake of the event, the Formule Citoyenne organization surveyed 70 traders and 49 of them reported a negative impact from the race whilst 28.6% said they made no gain and only 1.4% made a profit.

According to the group, "although it had a positive impact on some businesses, many traders are still angry at this experience which sometimes cost them a lot".

It added that lost earnings from the race weekend ranged from $500 to $18,000 per trader.

One of the driving forces was reportedly the competition between the race facilities and local businesses. "Formula E is a mini-village isolated and autonomous, with its facilities, its infrastructures, its universe. A universe that includes 'food trucks' that are not from the area, to the detriment of nearby restaurants," said a Formule Citoyenne statement.

While the Formula E event takes place over two days, the Grand Prix lasts twice as long.

The event already faces opposition from local residents and businesses, and though F1 remains confident it is widely speculated that attempts to appease the locals could cause plans for a 2019 race, on a track that has already been re-routed, to be abandoned.

In a further twist, the agreement reveals that the race name "may be modified by the GP Parties from time-to-time to some other name that incorporates the word 'Miami' (e.g., Formula 1 Downtown Miami Grand Prix)".

In other words, if those parties featuring all that glamour, Sean Bratches and Greg Maffei talk about, get out of hand, we might end up with a Miami Vice Grand Prix.

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