Willow Glen Resident

News

Budget committee reviews impact of Grand Prix and other city events

By Eli Segall

The San Jose Grand Prix, touted as an economic boon and subsidized last year with a $4 million city council-approved grant, made far less than the $42 million originally promised by city officials and race promoters. When the checkered flag came down the impact on the city was $23.6 million.

The financial impact of the race, held July 28 through July 30 in downtown San Jose, did not include the $14.3 million spent inside the race area on concessions and memorabilia.

The Grand Prix had nearly 50,000 people in attendance, 42 percent of whom were San Jose residents. There were 117,000 total visitors to San Jose that weekend. Racing fans spent money on transportation, parking, hotels and food and beverages. The overall profits also included corporate, vendor and media sponsorship.

A study of the economic impact of the three-day extravaganza, as well as five other events held last year in San Jose, was discussed March 26 at a meeting of the city council's community and economic development committee. The study was released in February.

Sports Economics, a Berkeley-based sports research firm, carried out the study and presented an overview of its findings. The group also showcased the user-friendly website it designed for city officials to use to calculate the financial impact of future cultural and sporting events.

A wide spectrum of people attended the Grand Prix, including out-of-town residents who came to San Jose specifically for the event (24 percent); visitors in town for reasons other than the race (14 percent); and people planning to visit San Jose who timed their trip to attend the race (7 percent), according to the report.

The subsidy itself, however, brought public accusations of a backroom deal; the item was placed on the council's Jan. 10 agenda one day before the vote. The council approved a report Jan. 24 on the impact of providing the subsidy.

Critics accused then-mayor Ron Gozales and then vice mayor Cindy Chavez of orchestrating the vote, which was opposed by former-councilman Ken Yeager, along with Chuck Reed and Dave Cortese. Of these three, only Yeager voted to approve the report.

The city's subsidy will decrease to $1.14 million for this year's race and will then drop to $639,000 per year between 2008 through 2014, according to Sports Economics' report.

The events analyzed by Sports Economics--San Jose Grand Prix, Rock 'n'Roll Half Marathon, San Jose International Mariachi Festival, San Jose Jazz Festival, San Jose Tapestry Arts Festival and ZeroOne San Jose--brought the city more than $150 million in direct and indirect spending, according to the report. This total was divided almost evenly between two groups: out-of-town tourists who came for the event and a mix of local residents, people in town for a separate event, business travelers and other visitors.

More than 171,000 unique visitors attended the six events and spent an average of $301 per day. Money spent was divided by category and, with the exception of hotels, not by individual businesses.

The 2007 Grand Prix will be July 27-29. To learn more about the race, visit sanjosegrandprix.com or call 408.277.9470.