Chicago spent at least $3.5 million for NASCAR weekend and got $620,000 in return
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Mayor Brandon Johnson’s decision to bring a NASCAR road race back downtown comes even though the event this past 4th of July weekend generated less economic impact than predicted and cost the city at least $3.5 million for police overtime and construction.
The $3.5 million figure stands in contrast to the $620,000 NASCAR paid the city to transform streets surrounding Grant Park into a 12-turn, 2.2-mile racetrack. NASCAR paid a base $500,000 permit fee to the Chicago Park District in April and in late September cut a final check for the 2023 race for nearly $120,000 to pay the city its portion of ticket sales as well as commissions for food, beverage and merchandise, according to city records.
An economic impact report released last week showed the race came in slightly below projections on attendance and the economic impact that racing organizers touted last year. Interrupted by near-historic rains, the race drew just over 79,000 attendees — short of NASCAR’s 100,000 attendee projection — and just under $8.3 million in estimated state and local taxes, below the projected $8.9 million. Overall, the economic impact of $109 million was also lower than the NASCAR-projected total of $113.8 million, the report showed.
Johnson on Friday reiterated his support for bringing the race back downtown next year when it is scheduled to be held July 6-7. The mayor said his office hammered out a “better deal for the people in Chicago” for the 2024 race by reducing the amount of time to set up and tear down the event as well as additional resources “that will ultimately give us the ability to pay for some of the cost that occurs as a result” of the race.
“We’ve seen the fact that it was the most well-televised event, and that’s in spite of the rain,” Johnson said. “And, you know, many of the economic benefits that we’ve experienced, and even with very extreme weather there, it was still net positive.”
Julie Giese, a longtime NASCAR executive and Chicago Street Race president, would not say whether the total permit payment fell short of expectations. Despite the rain and poor air quality the week leading up to the race, she considered the event a success and said it laid the groundwork for growth in future years.
Asked whether the city received its fair share, Giese said, “Yeah, absolutely,” due to the $50 million in spending to put on the race itself, as well as tax receipts for local governments, hotel visits, community events and giveaways with Chicago Public Schools and nonprofits. And “almost $24 million in media value, media exposure for the city of Chicago throughout those 15-plus hours of broadcast time … those are all things that we want to continue to build on and grow on and I think we’re going to be able to do that in year two.”
The city contract with NASCAR for the 2023 race was made while Lori Lightfoot was mayor, a point the current mayor’s administration points out when asked about the overtime and other costs not being covered by the racing company.
The deal for the 2024 race will require that NASCAR reimburse the city for the cost of police, fire and emergency management staffing, Johnson administration officials said. Lollapalooza, for example, comps the city for those costs. Aside from reducing setup time by four days and teardown by two days, the city said NASCAR also had committed to “expanding opportunities for small-, minority- and women-owned businesses to participate as vendors in 2024.” The administration has not released a copy of the new NASCAR deal.
Giese confirmed NASCAR is “committed to addressing those costs associated with putting on the event.”
“At least we won’t be losing anything from a financial standpoint,” next year, and could learn from the traffic impacts from year one and make the event less of a “burden for residents,” Johnson adviser Jason Lee said in an interview with the Tribune. “When you have that kind of rain, to just knee-jerk have a response to, ‘Let’s just get rid of it,’ to me, was not judicious enough,” Lee said.
Still, should the city change its mind for 2024, the Park District could terminate the agreement at least 180 days before the race and NASCAR would not be entitled “to any compensation or expectation damages,” according to the permit agreement.
Aldermen still have questions
While the Johnson administration seems set on a 2024 NASCAR race, aldermen whose wards are among those most affected by it said the costs cause them to have serious reservations about bringing it back.
“That’s what we get? Are you kidding me?” Ald. Brian Hopkins, 2nd, asked when told by the Tribune about the $620,000 NASCAR paid. “Clearly, we did not get the best end of this deal and NASCAR obviously made out very lucratively, even with the weather keeping the crowd down and cancellation of the concert … we just didn’t really benefit from this, that’s obvious at this point.”
“Compared to Lollapalooza, it’s not even close,” Hopkins said, noting he would have liked the city to try to capture a portion of NASCAR’s broadcasting revenues.
C3, the festival organizer for Lollapalooza, has typically paid a multimillion-dollar permit fee to the Park District after its four-day takeover of Grant Park. The city’s payment includes a cut of net food, beverage, sponsorship and ticket revenues. In 2021, that total payment was $7.8 million, and in 2022 it was $6.9 million.
Three downtown-area aldermen — Hopkins, Ald. Bill Conway, 34th, and Ald. Brendan Reilly, 42nd — said they were not consulted before Johnson announced Wednesday that the race would return, though Johnson had pledged in July to have an “open process where other folks get a chance to weigh in” before he made his decision.
“That’s disappointing because the mayor had promised he was not going to follow the script of the former administration and this is a page right out of their playbook,” Hopkins said. “Under the new terms, maybe we’re getting nickels and dimes. OK, arguably that’s an improvement, but to what degree I’m still unclear.”
Johnson’s chief of staff, Rich Guidice, said in an interview with the Tribune that he did give local aldermen a “heads up that NASCAR was going to be putting out their schedule on Wednesday for next year and Chicago is going to be on the list,” and that “contractually, an agreement was made for three years and we were continuing to have conversations with NASCAR.”
“Nobody was left out of anything,” Guidice said. It was “just a short turnaround,” he added.
On top of the city staffing reimbursements that Johnson officials said NASCAR will pay next year, the race company’s fee rates are scheduled to climb. The base permit cost, according to the Park District agreement, will increase to $550,000 in 2024 and the city’s percentage cut of food, beverage, and merchandise will jump from 15% to 20%.
Still, aldermen expressed concerns about how much the city spent and received from NASCAR this year and whether it was worth allowing the race to take over again.
“Last year’s NASCAR numbers simply don’t add up,” Conway said in an emailed statement. “It’s disappointing that the mayor renewed the deal without consulting City Council as promised or collaborating on a full cost-benefit analysis. Along with other downtown (aldermen), I surveyed my ward and received hundreds of responses from residents and local businesses whose feedback I wasn’t given the opportunity to share.”
Ald. Pat Dowell, 3rd a Johnson ally and head of the City Council’s Finance Committee, previously called for a “complete, deep-dive analysis” of the race’s financial impact before inviting drivers back next year. No hearings have yet been held on the matter and, on Friday, Dowell declined to comment on the city costs or Johnson’s decision to bring NASCAR back.
Breaking down the costs
According to the city’s initial contract with NASCAR, in addition to the $500,000 permit fee, NASCAR had to pay the city $2 per admission ticket and a 15% commission for food, beverage and merchandise concessions at the event. That included food vendors such as Lou Malnati’s, Vienna Beef and Garrett Popcorn, but not the catering provided by Lettuce Entertain You at premium enclosed suites.
Records the Tribune received from the Park District via a public records request show the city received $74,390 for its cut of admissions and $45,510 for food, drinks and merchandise. On Sept. 21, NASCAR wrote a check to the Park District for nearly $119,900, the records show.
While promoters said 79,299 people attended, the event had 47,405 “unique” attendees, according to the economic impact report, and NASCAR paid the city for 37,195 tickets sold. Under the permit agreement, that fee charge did not apply to NASCAR employees, the event producer, credentialed or comped city or parks staff or those with corporate suite or VIP passes.
City costs, meanwhile, have reached $3.5 million and likely will grow.
The Chicago Department of Transportation spent $2.16 million on the race, according to city records, while the Chicago Police Department paid out $1.4 million for police overtime. South Side Weekly also has detailed the city costs for NASCAR.
Of the $2.16 million in CDOT costs, $1.7 million came from construction for concrete, pavement, striping and traffic control and another $105,000 was for CDOT employee overtime, the records show.
The construction work included “full curb and sidewalk replacement on the west side of Columbus Drive, as well as resurfacing, bus pad installation and various roadway repairs on Balbo, Columbus, Jackson and Michigan,” CDOT spokesperson Erica Schroeder said. “These improvements were necessary for race weekend and continue to support everyday street and sidewalk use.”
For CPD, 1,281 officers were credited with working about 27,300 hours for the race. About 65% of the overtime hours were labeled “involuntary R.D.O.” — meaning an officer was asked to come in on a scheduled day off.
The Tribune received officer names and credited hours and calculated each officer’s hourly rate based on publicly posted annual salaries. The analysis only tallied officers whose overtime was specifically attributed to NASCAR and did not include other overtime worked throughout the July 4 weekend. Overtime hours are not necessarily paid out immediately. Those credits can be saved and paid out or used as compensatory time months or years later.
But those aren’t the only expected city expenditures for the race.
The Tribune has requested but not yet received from the city records showing how much overtime employees with the city’s Office of Emergency Management & Communications and Chicago Fire Department worked, as well as other costs.
NASCAR did pick up some costs for restoring green spaces to “the same condition” they were before the race. Park District records show NASCAR’s damage to the Ida B. Wells Drive median and Art Institute flower beds cost $21,630 while other landscaping costs around Grant Park — such as replacing mulch, irrigation, repairing grass or replacing sod and grading tire ruts and repairing areas “where access road was created” — cost just shy of $200,000.
By contrast, the average cost to restore Grant Park after Lollapalooza from 2017 to 2022 is a little more than $425,000.
NASCAR’s lower repair cost likely was due to the weekend’s torrential downpour. Ancillary NASCAR events that might’ve added foot traffic and damage in the park’s lower Hutchinson Field — including concerts headlined by The Chainsmokers, Miranda Lambert and Charley Crockett — were canceled due to flooding.
NASCAR also agreed to pay the cost of lost business for owners directly displaced during race setup and takedown. Six businesses sought $133,565 for lost revenue as a direct result of the race setup and tear down. A spokesperson for NASCAR and one of the business owners said the racing company paid the agreed-upon amounts to the displaced businesses.
Smilin’ Clyde’s Hot Dogs, which was permitted by the park to operate a cart at the corner of Columbus Drive and Monroe Street for 105 days this summer, requested $3,461 to make up for days of disruption. An Italian ice and snack shop on Michigan Avenue and Jackson Boulevard also requested $76,174 for 19 days of disruption.
Nearby business owners divided
Other businesses outside Grant Park said the inconvenience of traffic disruptions in the run-up to the race was worth it on race weekend. The weekend rain also pushed people into nearby restaurants and coffee shops, they said.
“It was super busy. We had a line going out the door and there were just flocks of people coming in,” said Jayden Valencia, an employee at Kong Dog, a novelty spot that offered a $6 corn dog and drink special for customers who showed NASCAR bracelets. “Every time there is something happening in the Loop this place gets pretty crowded but NASCAR was, like, overwhelming.”
Andrew Gallios, co-owner of Miller’s Pub which is a block away from where the racetrack was constructed, defended the cut the city received from tickets, food and merchandise.
“What’s $120,000? … I get it, it doesn’t sound like a lot of money,” Gallios said. “But I think the fringe benefits and the visibility, those are the things that add up. Can’t put a price on it.”
But Kristin Enola Gilbert, co-owner of Exile in Bookville who has previously voiced her displeasure with the city’s handling of NASCAR, said she is frustrated at the event’s return next year. The bookstore overlooks the track in the Fine Arts Building on Michigan Avenue.
“The problem does not lie with NASCAR or NASCAR fans, my issue is squarely with the city of Chicago,” she said. “I am very, very upset again.”
While restaurants or bars might thrive during a rowdy race weekend, the NASCAR atmosphere is not conducive to bookstore events. Gilbert said she had to cancel lucrative author events and change store hours because even the noise from the setup and teardown made it impossible to have readings and discussions at the store, let alone receive book deliveries. She expects to alter store hours and event plans again in 2024.
“We will have to be closed again during our busiest sales weekend of the year,” she said of a prospective 2024 race.
