What is going on in New Jersey?

02/10/2012
NEWS STORY

In January Pitpass featured an article entitled 'Why New Jersey needs to show us the money'. It was true then and it is even more true now. Around a year after the Grand Prix of America in New Jersey was first announced, instead of the project looking more stable it is shrouded in uncertainty. It is hard to feel confident on reading the latest reports as they make some surprising claims including the suggestion that organisers of the race have met with the owners of large properties along the route to ask for money. If that wasn't enough, the reports claim that, according to a source, the negotiations "didn't progress far."

The sign that all was not well first emerged in April when Bernie Ecclestone suggested that the race may have to be delayed until 2014 instead of taking up its summer 2013 slot as expected. Following Ecclestone's scepticism about it being ready for next year, race spokesman, Stephen Sigmund said "the race is on, as scheduled, for 2013."

Just one month later Pitpass' business editor Christian Sylt revealed that the organisers of the race were late with their contract. Ecclestone telling Sylt "we are waiting for different parts of the contract to be agreed. They are late."

Once again the race's PR machine fired up with a spokesman saying "we don't comment on our contractual relationship with Formula 1 or its details. We are on track for a June 2013 race, with all course engineering and construction progressing precisely on schedule, a strong management team in place, and strong ongoing support from New Jersey, New York City and the local communities involved. We are very confident that the 2013 F1 Grand Prix of America will be a great event."

Three months later, at the end of August, Tom Cotter, the president of the race, announced that he was resigning. Late last month there was further news about the future of the event when Ecclestone admitted that the organisers "have not complied with the terms and conditions of the contract which is now gone anyway. They don't have a contract." Backing this up, Sylt also quoted a senior motorsport industry source who said that "pricing for sponsorship etc was unrealistic and not obtainable in the current market; hence the malaise."

This time the PR machine remained quiet. It waited until the very end of the month when the race was included on a 2013 calendar issued by the FIA's World Motor Sport Council. It was labelled as the Grand Prix of Jersey perhaps in a Freudian slip acknowledging the ultimate location of the F1 companies which really hold the keys to its fate. The race was marked with an asterisk stating that it is 'To Be Confirmed' which is not a cause for celebration but you could hardly tell that from the press statements which have been emanating from New Jersey in recent days.

First, the race promoter and executive director Leo Hindery Jr said "I am proud that years of hard work have brought us to this point and we look forward to bringing world-class Formula One racing to New Jersey." Then yesterday New Jersey's governor Chris Christie even got in on the action saying that he had spoken to Hindery and "asked if he needs any help and he said, 'No.' I am not looking for problems. I heard there may be problems, so I called. And he told me it's not a problem." Nowhere in any of these statements do we have any details of where the money to fund construction is coming from but buried in some of the reports are some astonishing tidbits.

A few days ago, the NJBiz website ran an interview with Carl J. Goldberg, managing partner of Roseland, the property firm which owns the Port Imperial development where the race is due to take place. Goldberg told the website that "it's hard for me, from my vantage point, to see any ambiguity...The people from New Jersey are literally spending in excess of a million dollars a month, and continue to do so, to provide these specialized features on the property to facilitate the race."

There is no suggestion that this is the only money which the organisers are spending and we hope that more is being invested because $1m a month is nothing in F1 terms. The first signs of construction at the site appeared at the end of November last year which is around 11 months ago so at this rate $11m would have been invested. In contrast, the annual costs of hosting the Grands Prix in Valencia and Canada, which are comparable circuits to the one planned for New Jersey, are around $25m. Monaco costs nearly $10m more since the roads are in more constant use, as they are in New Jersey. All these circuits have been hosting F1 for decades so have whittled these costs down to as little as possible.

In short, it would seem that the New Jersey race organisers must be spending more than $1m per month so what was the point in Goldberg mentioning this figure?

The second surprising point which was revealed in a recent report came up just yesterday in an article in the Wall Street Journal. It claims that "race organizers have met with the owners of large properties along the route to ask for money, but the negotiations didn't progress far, said one person familiar with the talks."

The report doesn't say when these negotiations are believed to have taken place but if they happened recently then clearly it would indicate that the full race budget is not in place. Revealing their source of funding is the only way for the organisers to put an end to the kind of comments which have appeared in these two recent reports. One wonders why they have not done this and although there is no evidence that they won't disclose the identities of their backers in future, after nearly a year of silence we are not holding our breath.

Article from Pitpass (http://www.pitpass.com):

Published: 02/10/2012
Copyright © Pitpass 2002 - 2021. All rights reserved.