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By Alan Snel, LVSportsBiz.com Publisher-Writer
Race promoter Formula 1 first approached the city of Las Vegas about staging a grand prix in downtown in 2019, but businesses and hotels “did not have the appetite” to host the street race, Las Vegas Mayor Carolyn Goodman told LVSportsBiz.com Monday.
Two days after the inaugural Las Vegas Grand Prix was staged on a 50-lap, 3.8-mile road course in the Strip corridor in Clark County, Goodman said the city of Las Vegas declined Formula 1’s look at running the street race in downtown.
But Las Vegas did give a look at holding the F1 race.
Las Vegas city staffers studied potential roads for the grand prix and also looked at the Symphony Park area for a potential race event, Goodman said.
Keep in mind, downtown Las Vegas does host a big, annual private event, a music festival, Life is Beautiful, where roads are closed and businesses say they lose income from the loss of access to their business operations.
Regarding F1 approaching the city of Las Vegas, the mayor said the feedback she received from downtown hotels and small businesses at the time was that they could not afford to have roads closed and access limited to their business operations.
“There was no appetite” for the car race, Goodman said.
“You always have the option of the county,” she said.
And F1 did exactly that, winning approval from Clark County commissioners to close down 3.8 miles of prime public roads in the Strip corridor for a grand prix. Everyone agreed it was a spectacular visual sports event.
But at what public price and was the public cost worth it?
Not only did F1 get free use of Clark County’s roads, the race promoter in May 2022 also won $19.5 million in sponsorship support and services for three years from the Las Vegas Convention and Visitors Authority (LVCVA), the public tourism agency that is charged with attracting tourists to Clark County but tends to focus on the glamour of the Strip.
For some reason, Clark County did not require Formula 1 to compensate its local government for free use of nearly four miles of public roads. These days, county commissioners appear starry-eyed before major-league sports promoters in a market that is exploding with sports developments like the Oakland Athletics winning $380 million in government assistance to help build a $1.5 billion MLB stadium at the Tropicana hotel site on the Strip in 2028. That $380 million includes $120 million approved by Clark County commissioners.
Formula 1 claimed 315,000 people attended the three-day race event Thursday-Saturday, but it looks like the promoter simply took a daily capacity of 105,000 and tripled the number for the three days.
Las Vegas consultant Jeremy Aguero of the local Applied Analysis firm, a sports industry booster in metro Las Vegas, said the F1 race would generate $1.3 billion in economic spending. That included the $500 million F1 spent on building the $300,000-square-foot paddock or “pit building,” at Koval Lane and Harmon Avenue. He forecast 140,000 F1 visitors spending an average of $3,400 per visit, generating another $476 million as part of the $1.3 billion.
Not only is F1 not compensating Clark County for using its public roads, the race promoter wants the county to pay $40 million for road paving along those roads — a request that outraged many locals. The road paving that closed streets and disrupted many people’s lives was required to meet F1 road race standards. County Commission Chairman Jim Gibson said the $40 million request will be negotiated after the race.
Formula 1 suffered several PR black eyes, like not offering a ticket price affordable to Las Vegas locals, not engaging much with metro Las Vegas people and getting sued shortly after Thursday’s scrubbed first practice session for not refunding ticket costs to fans booted out of the race venue after a water drain cover was pulled out of the road surface by a race car. The race promoter came off as arrogant and greedy in the face of using so much key public road infrastructure for a private sports event in the Strip entertainment corridor.
Here’s a look at part of the class-action lawsuit filed by Las Vegas lawyers Steve Dimopoulos and Jared Kahn on behalf of four fans who were among at least 35,000 people not offered refunds after the “practice run” event was scrubbed following nine minutes of practice Thursday.
Formula 1 did create a spectacular visual sports event while making tens of millions off dollars off ticket sales to rich international visitors. Vegas’ big hotel companies also made tens of millions of dollars in revenues during a traditionally slow time on the tourism calendar a week before Thanksgiving.
The event divided metro Las Vegas. For the most part, F1/car racing fans along, Strip hotel companies like MGM Resorts and Caesars Entertainment and Chamber of Commerce boosters like the event, while average residents and many small businesses (especially those that lose money) wished the event never happened.
Here’s a summary written by local Facebook writers who offered various thoughts on the event.
Another reader posted these suggestions for F1 to get connected to Las Vegas better.