Much to nobody’s surprise, the San Jose Grand Prix is dead. Apparently, it committed suicide. The laughably dubious reason given by the organizers for its demise is that downtown development is happening at such a scorching pace that the property where one of the main grandstands is located is going to be built on and there isn’t another location for the race’s premium seating structure. The Grand Prix directors say that they have always been aware that the construction on the property would happen. If they had done their homework, then they must have also known that it would mean the end of the race. Did they keep this fact to themselves?
Now I ask you, if the city council knew that impending construction on the location of the race’s main grandstand would mean cancellation of the Grand Prix, would they have approved the event and, even more important, would they have subsidized it to the tune of $4 million? Would money that could have been better used elsewhere have been spent on preparing the streets and VTA rails for the cars to drive over? Would trees have been relocated from their long-term homes in the middle of downtown streets to accommodate a course that wasn’t going to be used for more than three years?
None of this makes sense. The reason given for canceling the event sounds too much like a poorly considered excuse. It seems more likely that the race is a financial loser for the organizers after exhausting the city’s subsidy. It has certainly been a loser for the taxpayers and most of the restaurants and other businesses downtown. The big hotel chains were the only business winners. The central city area outside the actual course was a ghost town over all three Grand Prix weekends, resulting in loss of income and prompting early closures at restaurants that should have been hopping. Just ask the people at Henry’s Hi Life, Sonoma Chicken Coop, or any of dozens of downtown eateries and bars.
The Grand Prix organizers have a lot to answer for. Right now they are looking like boondogglers and purveyors of snake oil. If we believe their excuse for canceling the race, then we are forced to conclude that they must have withheld vital information and misrepresented the annual event’s long-term viability in the original proposal, and therefore received public money under false pretenses. Why did they inflate the attendance figures of the first two years and only come clean as this year’s race was about to begin? They assured the public (remember those full-page ads in the Mercury News) that the race would bring great benefits to the city and profits from the event would go to support a cancer charity. What benefits? What profits? Was any money that was directly attributable to the race (not from special peripheral fundraising events) actually paid to the charity? How much? They say that there was a $70 million benefit to city business over three years. Which businesses benefited and where are the audited figures to prove this? It has been reported that additional taxes collected that were attributable to the race amounted to around $1.5 million over the three years. Can that be proven? Does that figure take into account the loss in tax revenue from other city businesses over those weekends?
Where did the public’s $4 million cash subsidy go? How was it spent? Wouldn’t it have been better under the circumstances just to give our $4 million directly to charity? At least we could feel good about it being spent on something useful to society instead of finding out now that we may as well have tossed the cash into one of the city’s many vast and still-unfilled potholes.
So yet another rushed deal made without public scrutiny by the last administration behind closed doors at City Hall proves costly to the citizens of San Jose. Who really profited as a result of that secret meeting? Maybe we should hire some consultants to find that out.
Grand Prix is another of many San Jose’s mismanagement of tax millions and example of public being lied to again by city officials knew or should have known in either case people should be fired
1 City Attorney – millions lost by bad or political lawyering for Council and lawsuits lost with city losing almost $100 million with GP, county fairgrounds, Tropicana etc – who’s motto is ” Tell me what you want and I will legally justify it” – by people who lie routinely to public
2 Economic development – another of too many examples of grossly inflated impacts $42 million, then $23 million by consulting firm who works for race car organizers – totally unbelievable numbers – by people who routinely lie to public again
3 City Manager office or more accurately City Mismanagers who are paid big money to efficiently manage city government and failed public again Shikada said about the 200 mile restriction ” the provision wasn’t designed to address Laguna Seca ” only 50 miles away where race will be moving which public believed – by people who routinely lie to public again
4 Google search on “Dale Jensen part owner of the Phoenix Suns as well as the Arizona Diamondbacks, a major league baseball team” shows he has routinely lied to many cities ( Denver, Las Vegas, Phoenix and lately San Antonio ) to get Grand Prix tax subsidies and then pulls Champ races when subsidies end and gave San Jose inflated attendance numbers – by people who routinely lie to public again
5 Chamber – who lobbied for Grand Prix tax subsidy million and fought community on using cost – benefit justifications for all tax subsidies – by people who routinely lie to public again
6 Mayor and Council – You gave Grand Prix at least $6 million in cash and free services ( $600,000 per year) more than any other cities – who gave $500-750,000 after Denver Grand Prix tax millions
If Council does not fire 3-4 city staff over yet another financial disaster we know exactly what we can expect in future – more millions wasted – by people who routinely lie to public again
People should be fired or many more millions will be wasted
Jack I agree
About the Grand Prix
Why did they flee?
Because city no longer pays fee?
Racers should pay C-O-D
Instead we were stung by a bee
Race was not a marquee
They cut us off at the knee
They filled streets with debris
They cut down the tree
We weren’t filled with glee
City Council should be
Taxpayers’ trustee
We need future guarantee
Whether Grand Prix or M-H-P
A money-losing potpourri
So a judge should decree
No more spending spree
The people who should be fired are the Councilmembers who voted for this. Remember them when they run for other offices.
Don’t get fooled again….
Mayor Reed is turning out to be the worst mayor San Jose ever had. The Grand Prix got cancelled under his watch. The Circus of Quebec is not coming downtown due to a lack of leadership. Downtown is struggling miserably because of the parking fees levied by the mayor. Not one new highrise got started during Reed’s current tenure. What has he done so far? Nothing but self-destruction for downtown’s 3 billion dollar investment to go to waste right before your eyes. What a disaster! He has no leadership whatsoever. He’s screwing up big time, and San Jose’s ego is an all-time low. By the way, he just let the “Living Tomorrow” with Starwood hotel and residential project collapse. He can’t get anything done and let everything fail. Just about every project on the agenda is dying due his lack of interest or leadership. What a sad era we’re in! It’s going to us more than San Jose. Brace ourselves!
If the City Auditor’s office were not in such disarray, this would have been the perfect job for them.
I have never seen any proof that any $$ from the GP itself actually was tendered to charity.
Another subsidy proving that SJ’s inferiority complex is still alive and well.
Dear Race Fans:
There are people in the city that should be fired over this, but of course they won’t. The $4 million subsidy became an issue in the mayor’s race because of the way it was pushed through, AND, because people couldn’t understand why city streets were being paved for a car race, while their own streets remained unpaved.
I believe that there are four high level city officials who should be fired over this. Would anyone care to name names?
Pete Campbell
My late father once told me that if you live long enough, you’ll hear a politician say just about anything. I am beginning to think he was right.
Just when you think that there is nothing to laugh about in the loss of $4+ million, along comes Councilman Forrest Williams—-nature’s gift to muckraking bloggers with a sense of humor—-with this howler. Williams, one of the council members responsible for this debacle, is quoted in todays Merc as saying that the reason for the Grand Prix’s lack of success and now its demise is that it wasn’t supported by Mayor Reed and Councilman Liccardo. So, in other words, Williams is saying:
“I bought this expensive $4 million bottle of snake oil that was promised to restore normal function to my one remaining brain cell and the only reason it hasn’t worked is because Reed and Liccardo don’t believe in the oil’s magic powers.”
Apparently, a few of our other councilmembers—-the ones remaining on the council who voted for this boondoggle in the first place—-agree with Councilman Williams.
Well, all of you in that group just close your eyes, tap your heels together and keep repeating: “There’s no place like home; there’s no place like home……….”
http://www.mercurynews.com/ci_6879896
I am pleased to be rid of the Grand Prix. It failed to achieve any of its planned goals and its cost was too high to be sustained. It did not drive ancillary business sufficient to offset its direct cost and the downtown consequences were generally quite bad.
I am not angry about the race being first invested in and then canceled. San Jose has invested before in effort to bring high profile attraction to San Jose and sometimes they have worked. Attracting the Sharks was a major success. Attracting Cirque du Soliel its first visit was also a coup that has paid handsome dividends (even if this year’s site is subject of debate.) Other sport franchises have not fared well and the Grand Prix is one of those. We have to be willing to try things, but equally prepared to dump them when they fail to gain market traction.
I do feel the press release was embarrassing. Your point that they had to know that Boston Properties had development rights was certainly true and there is no indication that Boston Properties is moving any faster this year than in the last seven. It seems strange to have to find excuses for making a decision to withdraw. It didn’t work financially. The backer was no longer willing to lose money, that should be good enough. Blaming healthy development is a ruse and doesn’t treat readers with the honesty and respect they deserve.
As for the 200-mile exclusion, that too was a ruse, but one fostered on us all when the deal first went to Council. It sounds protective, but as it did not encumber the primary party, the Champ Car circuit, it only applied to the local producer who had zero incentive to not try to make it work here and here alone. I read it as a dead letter negotiating point that was inserted to give the appearance of due diligence for which there was none.
The honest response to this is that San Jose continues to foster a civic culture that feels blame or excuse is preferable to accepting responsibility. The event failed to achieve its objectives, case closed – move on.
This is just another example of voodoo economics being used to justify something. Anything, and I do mean anything, that is justified by voodoo economics is a economic disaster.
Voodoo economics always relies on estimated (a guess) induced and indirect income to justify the project. These economic failures have very little direct income, so the supporters resort to voodoo economics to “prove” its greatness.
Andrew #11
Thank you for your excellent points. I completely agree. I don’t think we ought to hold our breath waiting for someone to honestly and openly accept responsibility for this particular failure. As you rightly say, it isn’t part of our current civic culture.
Forrest Williams may very well be a genius, perhaps the next me.
What I don’t understand about this town is that it always seems to be doing something or trying to do something to boost its image.
Its like San Jose wants the world to notice it, that we’re not just the ugly little step sister/brother of that you know where place up the peninsula.
So San Jose goes out and does these things, some successful some not. Yet when people and the TV cameras do come what is here that grabs their attention?
Yes we have a sports pavilion but so does Cleveland, Omaha, Sacramento, etc, etc.
San Jose does not have spectacular views, a historic bridge or two, cable cars and a City Hall that looks like a seat of government, not a high tech building.
We have some OK museums and the History Park, and Winchester Mystery house. but thats about it.
I have been trying for years to get the city and others to finish the rebuilding of our Landmark clock tower. It would be a stunning visual buidling that people and TV cameras would take note of.
The Nels Johnson clock inside is the Rolls Royce of mechanical clocks. Experts scratch their heads as to why it ever ended up in a little town like San Jose. Its been ignored since 1908!
So San Jose will put out more millions for the next big idea the wunderkids in City Hall come up with and keep ignoring the simple logic of working with what you’ve got.
Did someone mention Camel races?
John Mitchell
Its About Time
On January 10, 2006, the San Jose city council are voted 8-3 (Cortese, Reed, Yeager opposed) to approve a $4 million subsidy for the San Jose Grand Prix
Anyone who believes city or business people will take responsibility or anyone will get fired is a Greater Fool than those who voted or supported millions for Grand Prix
What about city staff responsibility for recommending to Council and public that spending millions on Grand Prix was good for San Jose and would generate $246 million in economic benefit?
What about responsibility of Downtown Association, Team San Jose, Chamber, Rotary, Silicon Valley Leadership and Unions who Council for Grand Prix money?
Watch – No one will take responsibility or be fired for Grand Prix tax rip off
SJ Murky News said:“Chalk it (The Not So Grand Prix moving to Laguna Seca) up to a technicality. San Jose officials said the contract isn’t being violated because the city had no agreement with Champ Car, the race-sanctioning body. Instead, the contract was with the local race operator/promoter – San Jose Open Wheel Racing LLC, owned by tech executive Don Listwin. Listwin’s company is going out of business and will not operate the Laguna Seca event.
That loophole was not made clear in January 2006 when city council members asked for assurances that taxpayers would get an adequate return on their tax dollars.”
Another great legal blunder by Rick Doyle’s office.
How many times does his office have to commit malpractice before he’s sent packing?
#17- Well said JMO.
#7- Get real! Mayor Reed made it very clear that spending money on things the City can’t afford would become a thing of the past, and it sure is! He and two other Council Members voted NO on this over priced race! Mayor Reed wants to fix pools, streets, get us more Police, and Fire Fighters, fix community centers that are filthy, old, and falling apart. Those are the things CITIZENS begged him to do, and he’s doing it.
Council Member Williams is way out of line here for blaming the Mayor and Liccardo for this bait and switch by this race promoter. He and the other Council Members who voted for this are staring straight into the face of KARMA! It’s about time, after the way they deceived us by passing this so quickley, now it is coming back to bite them BIG time!
Rick Doyle’s office should be allowed to commit malpractice 36 times before he’s sent packing.
It’s been more like Chump Car and we were the chumps who got stuck with it. At least most of the 4 million went to a charity, so I feel much better about that.
Let’s see, Not so Grand Prix 4+ mil
City Hall 375+ mil
San Jose Tent 6 mil
Team San Jose 20 mil
SJ Auditor’s ? mil
MHP .5 mil
Add Nor Cal, Fairgrounds, city salaries and others, so that’s a whole lot of chump change in the last few years.
Wait there’s more, the soon to be convention/downtown vision/expansion.
#16 I feel your pain.
Thus far the City council, City Manager, RDA, have a good track record of hiring recycled insider folks as Consultants. We may just get that again in this case. It would not surprise me to learn that Ron Gonzalez and Cindy Chavez will emerge as the new consultants in this laughable episode that by now has put us on the international map of total supidity. We must be #1 in some National pole related to simply, being so dam enept and sneeky.
What I want to know is where is Frank Taylor and all those palm trees that were up rooted for these Canaries. I heard He left the City and the State. Smart guy!
Frank, where ever you are, come back we need you as a consultant. The Canaries and talking Parrots, need to be put back in their cages!
D.O.A.
And to think that the architect of the deal now wants to take over for Blanca Alvarado on the county board of supervisors! Wow!
The city should also get out of the golf course business. To recall a recent post by Pierluigi Oliverio, “After spending over $100, 000 on a consultant, it was determined that the city owned golf course, Las Lagos, needed new netting at a cost of $2 million to keep the golf balls from going in the street. Yes, $2 million for nets. The golf course was “supposed” to be profitable. Instead, the city has spent $24 million on the golf course already since it was opened approximately a decade ago. Las Lagos has operated at a loss every year—absolutely no profit. Las Lagos sits on 200 acres of city owned property. One might think that the investment of $24 million on a golf course isn’t working and the city should cease spending money on it.”
This makes the Grand Prix look like a bargain.
$24 million would have paid for a lot of basic city services over the past 10 years.
Jack,
Sure thing… more consultants to study the Grand Prix issue. We have thousands of City employees, many of them very well paid, yet we have a void of talent when it comes to a sticky, complex issue. Here’s a suggestion – hire Gerald Siva as a contractor and we’ll get the real skinny on this mess!
I was going to take a shot at Cindy here but that would be to easy. and it’s stupid to blame people here. But I will never forget that site of her waving that stupid flag.
But I digress, Lets all just be happy that it’s over and that we don’t have to hear,look,see, it anymore. we have cut are loses and it over. and for that I’m happy.
As for the people that like it I’m so sorry maybe you can a rent a bus and go see it in monterey? and take a lot of money to spend so everybody will be happy.
As for Mr Janzten you should have more to say then (no comment) you are nothing more then a snake oil salesman. and I’m being nice.
#7 – Interesting how you see the glass half empty and I see it half full. I’m delighted that the race was cancelled under Reed’s watch, hopefully this is the first major sign of his fiscal watchfullness. The venue was the riduculous from the getgo. The fountains were broken, trees removed, it was hard to access downtown, just to get to Bof A was challenging, people were displaced from their homes, not to mention the noise and added pollution level. Keep that up and we wouldn’t be meeting the EPA guidelines to bring BART.
And besides, the race promoters took advantage of a technicality and unethically used it to their advantage.
THe circus move didn’t have adequate time to relocate. Hast makes waste. I think Reed’s demeanor indicates that he thinks things through. I feel that is a prudent and admirable quality.
Don’t forget the race isn’t the first thing to sneak out of town, remember the movie theaters, that was really a good one, at midnight, no less!
Circus subsidy for downtown was cancelled until next year on Friday and Grand Prix was cancelled on Monday
Could it be Council knew Grand Prix cancellation was coming and public would loudly object to Council wasting tax money on more downtown losing events?
Voter Accountability is Counting who Votes to waste our taxes and Voting against them
Start Vote Count
Cortese voted No – Grand Prix
Campos voted Yes – Grand Prix
Leave poor Forrest alone… if he had an original thought, it would die of loneliness.
Mystery Writer (#7), I’ll just bet a dollar to a donut hole that you live in or have an interest in a business Downtown. Are you aware that, were the citizenry allowed to vote on them, measures relating to San Jose dumping more money Downtown would fail miserably? Get over it, we’re a sprawling metropolis and voters want amenities in their own neighborhoods, much as you apparently do.
As for Doyle, I’m surprised that Chuck hasn’t dumped him. That may be Chuck’s only real failing to date.
I gotta mention, just cause the OP mentioned it…
I work in a large hotel, inside the track perimeter every year. And even THEY only did well the first year. Apparently attendance sucked so bad for the entire GP that we couldnt sell food to people actually trapped inside the track’s perimeter. Also, we had at least one instance per night of “guests” being asked to leave (escorted by our security, and yes, even police) the restaurant for being noisy or disrespectful to other patrons. If nothing positive ever comes from this event having been held here, at least I have the memories of some nascar fan in a tanktop hitting on some guy’s daughter at the next table, where we’re busy trying to sell $100 bottles of wine.
Ok, maybe the hotel did well on rooms or other concessions or something… but this event has been a consistent letdown.
Thank you for your consideration. This has been another episode of… what pisses me off.
Andrew, don’t be pointing fingers yet… Team San Jose has NOT delivered what they were supposed to either. Remember the Grand Jury Report… They are a money sucking leach of a subsidy. Hopefully they will follow the Grand Prix folks out of town. Nothing but wasted money, they are Team San Jose, San Jose Grand Prix, and the shoe kissing bottom feeding wanna be politicians that attach themselves to Mayor Buck “Greed”. He’s not so clean either, if we looked deeper I bet he would make Gonzales look like a boyscout. City council should be ashamed of themselves.
Here they go again! KNTV: “When the city council votes on a $200 million redevelopment budget Tuesday, one of the items up for vote would fund the purchase of the first floor, lobby, and basement of the historic Bank of America building in downtown San Jose.” This is for the mythical downtown BART station – what’s the rush? Are they getting a bargain? From Steven Lin? Heh, heh. What the heck are they going to do with the building if BART doesn’t get built in the next ten years? Hopefully, they will not make a quick decision and consider how else that money could be used.