NASCAR's Financial Agreement with Chicago Still Unconfirmed
Chicago's agreement with NASCAR for the upcoming race has not been legally finalized, according to an open records request. While NASCAR has verbally committed to providing an additional $2 million payment, it falls short of the city's expected costs from last year. The city spent at least $3.5 million on overtime and construction expenses for the inaugural race, but only received $620,000 in return.
Verbal Commitment, Not a Formal Agreement
The city of Chicago and NASCAR have not yet finalized their financial agreement for the upcoming race, according to an open records request received by the Tribune. While NASCAR has verbally agreed to contribute an additional $2 million payment this year and next, the agreement has not been legally codified. The Johnson administration hopes that this funding will help the city cover the costs associated with the event. However, the additional $2 million falls short of the more than $3.5 million in overtime and construction expenses incurred by various city departments during last year's race.
The costs from last year included $2.16 million from the city's Transportation Department for road improvements and extra pay, $1.4 million in police overtime, and $50,000 in overtime for city emergency management workers. Therefore, it remains uncertain whether the $2 million contribution from NASCAR will be enough to cover the city's expenses.
Last year's race saw Chicago spending at least $3.5 million, while only receiving $620,000 in return from NASCAR.
Economic Impact Falls Short of Initial Projections
Despite Chicago's efforts to bring back NASCAR, a study conducted by Choose Chicago revealed that the economic impact of the 2023 race was lower than initially projected. While the event generated nearly $109 million in economic impact, it was still less than the estimated $113.8 million that NASCAR had originally anticipated.
The revenue generated from the race does not go directly towards covering the city's overtime and construction costs. Some aldermen have criticized the financial benefits of the race compared to other events. For example, the recent Lollapalooza weekend resulted in nearly $10 million in fees for the Park District.
Despite the lower economic impact, NASCAR has committed to expanding opportunities for small-, minority-, and women-owned businesses to participate as vendors in future races and increasing its charitable contributions locally.
Lack of Transparency and Concerns Over Costs
The lack of a written agreement with NASCAR has raised concerns among some officials. Ald. Bill Conway, who criticized the mayor for not consulting the City Council or conducting a full cost-benefit analysis, stated that it is irresponsible for the city to engage in a multi-million dollar deal without proper documentation.
The city has not released a copy of the new agreement with NASCAR, and a public records request for the agreement yielded no responsive records. In response to inquiries, NASCAR disclosed that they would pay a new, flat fee for this year and next.
However, concerns remain about whether the $2 million contribution from NASCAR will be sufficient to cover the city's costs. Based on last year's expenses, it is unclear if the city will break even with the race.
