Will Economic Payoff From Formula 1 Week In Las Vegas Be Worth Clark County Handing Over Strip Corridor To Las Vegas Grand Prix And Creating Unprecedented Disruptions?

 

 

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By Alan Snel, LVSportsBiz.com Publisher-Writer

The Strip just hasn’t been the Strip these days.

Las Vegas’ world-famous spine of entertainment is built on selling illusion and suspending reality, a Disneyland for adults that performed this week, perhaps, its most spectacular and controversial magic trick of all.

Nearly four miles of public roads, sidewalks and right-of-ways in the Strip corridor were transformed into a high-speed race track and privatized for a race promoter with the approval of the Clark County Commission and promotion of the Las Vegas Convention and Visitors Authority, the public tourism agency of metro Las Vegas.

The county commissioners handed over 3.8 miles of public infrastructure to car race promoter Formula 1, which morphed the iconic Strip into a private circuit that will take weeks to take apart even after Saturday night’s 20-racer, 50-lap, 192-mile event concludes.

The question metro Las Vegas needs to ask itself is rather simple: Was it worth it to create so much disruption for a sports event and cause many businesses to lose money in a region’s main center of commerce so that big revenues could be reaped by giant hotel companies like MGM Resorts International, Caesars Entertainment, Wynn Las Vegas and Vici Properties (Palazzo, Venetian owner)?

The event’s disruptions were unprecedented for Las Vegas.

Key roads were closed as public streets along the race course were repaved not once but twice. Thousands of Strip corridor workers have stories to tell about lengthy waits to leave parking garages. Small businesses like pizzerias, delis and souvenir stores saw a significant drop in foot traffic.

And there was a general sense among locals that F1 organizers brought an elitist attitude toward making a public resource their own.

In the event’s first year, Formula 1 brought upon itself many self-inflicted PR wounds like misleading locals into thinking they can buy a $200 ticket for tonight’s race when the ticket was actually good for practice sessions.

Speaking of practice sessions, F1 scrubbed Thursday night’s first practice session after a water drain cover was pulled out of the race track surface by a race car a mere eight minutes into the session. Fans were upset when the Las Vegas Grand Prix told attendees to leave for the second practice session, with fans not receiving a refund.

The mess prompted a class-action lawsuit on behalf of the thousands of fans who attended Thursday’s first practice session against Liberty Media, owner of Formula 1, and were forced to leave..

Metro Las Vegas bought into hosting the grand prix because the area accepted the contention by Clark County and LVCVA officials that this inaugural F1 event would be a financial windfall for the big hotels and bring big-spending visitors called “whales” to Las Vegas during a time of the year when tourism is slower than other times of the year.

An hour before tonight’s 10 PM race start, LVSportsBiz.com saw Las Vegas Convention and Visitors Authority CEO Steve Hill strolling with LVCVA Chief Operating Officer Brian Yost through the center of the pit building complex. The wide walking area is lined by the race teams’ spaces, serving as a gathering courtyard-style place.

Hill wore a LVCVA-style varsity jacket and Yost was in the red jacket.

LVSportsBiz.com asked Hill to assess how things were going on F1 race week in Las Vegas.

“Great, great,” Hill said.

And off he and Yost went.

The LVCVA sold the F1 event to the Las Vegas area based on economic numbers supplied by Hill’s friend, Las Vegas-based consultant Jeremy Aguero, who is currently working for the Athletics after he and Hill presented the Athletics’ stadium subsidy proposal to the Nevada Legislature in June.

Based on the economic spending numbers, Clark County commissioners greenlighted the race for ten years and allowed Formula 1 to take over a valuable public commodity — the Strip corridor’s infrastructure — for a private sports event that has altered the daily rhythm of people’s lives to an extent never seen before in Las Vegas .

LVSportsBiz.com also reached out to Aguero Saturday morning to clarify and sharpen the numbers:

^ 140,000 visitors, including 105,000 race event visitors and another 35,000 other race-related people and race/team-related employees, were expected to come for this week’s race event.

^ $1.3 billion in economic impact includes the $500 million spent by Formula 1 on building the 300,000-square-foot paddock “pit” building and $476 million spent by the 140,000 fans, attendees and employees spending an average of $3,400 per person. A typical Las Vegas visitor spends 3.4 nights and $870 per trip, while a typical F1 visitor spends 4.5 nights at a race and $3,400 per trip.

^ On businesses losing money, “The analysis considers potential displacement effects based on the 140,000 Las Vegas Grand Prix attendees. That said, it does not attempt to model how pricing strategies at individual hotels may have impacted individual restaurants or other entertainment venues.”

^ $87 million in state and local taxes, including $37.6 million in live entertainment taxes and an estimated $25 million for K-12 public schools.

Greg Maffei, CEO of Colorado-based Liberty Media, which owns Formula 1, apologized last week to Las Vegas for the disruptions and said 105,000 fans would be visiting Las Vegas for the race.

Maffei’s 105,000 number is the race’s total daily capacity and does not include race fans without tickets who come to Las Vegas for the race atmosphere and event-related workers. Aguero did not address Maffei’s contention that the 105,000 daily capacity of fans would generate $1.7 billion in spending in Las Vegas.

The average F1 ticket price in Las Vegas was $1,667, according to the F1Destinations.com website.

The glitz and entertainment spectacle of F1’s Las Vegas event have drawn the attention of racers like star Max  Verstappen, who said the event was more show than race.

But LVSportsBiz.com spoke with a race marshal who said, “Someone from Red Bull (Versteppen’s racing team) should have told him to shut the fuck up and explain to him that we are in the motorsports entertainment industry.”

The race will be back for 2024. We know that because the Las Vegas Grand Prix sent out an announcement even before the first race actually happened advising fans they can put down a deposit for next year.

It’s pretty ballsy to ask people for deposits after all the PR miscues and upset fans sent home Thursday from the circuit.

·        General Admission and Grandstand: $250 per ticket

·        Shared Hospitality: $1,000 per ticket

·        Private Suites: $5,000 per suite

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It was sheer mayhem on the few roads that officials allowed to remain open next to the closed race track.

The one road that was Mad Max insanity is Harmon Avenue, where I bicycled from the track area on Thursday night.

The road scene was insane. Not enough police and traffic control. Rogue pedicabs and golf cart drivers ferrying fans on Harmon were weaving around cars, with some pedicabs and golf carts going the wrong way against the flow of traffic.

I spoke with one legal pedicab pedaler, a friendly woman named, Allison, from Denver who came to Las Vegas Monday with five pedicab drivers. She was on Flamingo Road, east Koval Lane.

“Wanna ride,?” asked walkers.

The fares run from $40 to $100 depending on the number of people in the group.

She saw the insanity on the street along Harmon Avenue and agreed with LVSportsBiz.com that the planning was atrocious. It was a free-for-all.

Allison estimated that there probably about 125-150 pedicab drivers working the grand prix. Their bikes are electric, so it’s not 100 percent human-powered vehicles.

The race’s fan capacity is 105,000, though it’s doubtful a sellout will be realized.

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A sports event on public streets that were made private posed an intriguing challenge to try and stop people from watching cars zooming along 3.8 miles of race course.

Videos showing security screaming at people on public pedestrian bridges spanning the Strip was horrible PR for the race organizers.

LVSportsBiz.com found a rip in a curtain at the pedestrian bridge spanning Koval Lane at Flamingo Road.

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It was stunning to see Clark County and the LVCVA sacrifice the revenues of small businesses inside the closed race circuit island at the altar of big money spent by tourists at the big hotels on the Strip.

Here’s a convenience store at Flaming Road/Koval Lane that saw a decline in motorist business, but at least there was foot traffic Saturday to bring in some revenues.

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If top F1 driver Max Verstappen chirped about the entertainment show quality eclipsing the race part of the Las Vegas Grand Prix, one can only imagine what he thought about donning an Elvis-inspired race suit.

But there he was, as Oracle Red Bull Racing — Vertstappen’s team — partnered with Elvis Presley Enterprises on a “Viva Las Vegas” race suit in homage to Elvis’ signature Las Vegas jumpsuit. Not only is Verstappen wearing the outfit but so is Red Bull teammate Sergio Perez during the Las Vegas Grand Prix.

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Donny Osmond sang the national anthem. He might as well because he probably had the night off as many hotel shows went dark this week.

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And for the record, Verstappen — winner of 17 of 20 races — won again.

He gave that Elvis outfit some publicity with the win.

“Great crowd,” Verstappen after his 18th win this season and 53rd overall, good for third in F1 history. “Excited to come back next year.”

And when the racers leave town, workers will start breaking down the the canyon of fences, light mounts and grandstands lining the 3.8 miles of roads taken away from the locals who pay to maintain the public right-of-ways.

Formula 1 isn’t going anywhere.

The race promoter wants Clark County to pay $40 million toward the road repaving projects.

Even when the locals get their road back, they might end up still paying in 40 million different ways.

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