Kevin Valine

August 7, 2014

Kevin Valine: What was economic impact of Modesto Grand Prix?

City officials have said they expected last weekend’s Modesto Grand Prix to bring in about $1 million in spending from the race fans, drivers and others. But it may be difficult to quantify the economic benefit when you account for businesses hurt by the race.

Modesto News

Issues affecting the city, the economy and quality of life

It’s been a week since the Modesto Grand Prix, but I’m going to take one more lap around the track.

When city officials revealed their plans for the race nearly a year ago, they said they expected the event would draw 10,000 spectators to watch superkart drivers race on downtown streets. Officials expected the spectators, the drivers, their crew and family members, and race officials to spend about $1 million on lodging, meals and other purchases.

The city’s preliminary estimate is the grand prix drew 10,000 to 12,000 people downtown last weekend. That exposed downtown to lots of people. And there were business owners, such as Barkin Dog Grill owner Hanibal Yadegar, who say that was a great boon. The event also was family friendly.

But I’m wondering about the economic impact.

The city based the $1 million on the spectators and others spending $50 a day on food and other purchases, and those staying in hotels spending $100 per night for lodging. But that calculation leaves out the losses sustained by downtown businesses.

Some of them closed over part or all of the weekend – their busiest time of the week – because they did not believe the grand prix was a good fit for them, and the street closures and crowds made getting downtown too much of a hassle for their customers.

And then there were the restaurants. The race promoters told them to expect overflow crowds, so some stocked up on food and brought in extra staff. While a few restaurants reported doing well, that was not true for others, which are now eating the cost of purchasing food they did not sell and for help they did not need.

It’s going to be interesting to see how the city can quantify the direct economic benefit of the grand prix.

City officials are expected to spend the next couple of weeks conducting a debriefing for the first-year event and eventually will meet with the race promoter, Southern California-based SuperKarts! USA, to compare notes as part of the process of deciding whether to hold the grand prix a second time.

Modesto officials stressed that no decision has been made, but said the problems encountered last weekend can be fixed. That was the point made at Wednesday’s City Council meeting by Chris Ricci, founder of the annual Xclamation Festival, which brings thousands of music fans downtown.

Ricci praised the city for putting on the race, but he urged city officials that if they hold another one they get permission from downtown businesses to close the streets.

Ricci said the city requires him to get the permission of at least two-thirds of the businesses before he can close a street for X-Fest. He said if the city followed the same rule it imposes on others, it could have avoided problems because the city would have worked with businesses before the race to address their concerns.

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