From a press release issued by California Speedway:

CALIFORNIA SPEEDWAY’S ECONOMIC IMPACT IS $135 MILLION IN 2003; ECONOMIC IMPACT COULD REACH $220 MILLION IN 2004

FONTANA, Calif. With every racing event at California Speedway there are winners and losers. According to an economic impact study on how California Speedway affects the local economy the speedway is a winner.

The entire 2003 economic impact of California Speedway’s events and daily operations totals $135.7 million, with approximately $84.7 million coming from the speedway’s NASCAR race weekend. The total economic impact could grow to an estimated $220 million in 2004 when the speedway hosts two NASCAR Nextel Cup Series races, according to economist Dr. John Husing of Economics and Politics, Inc.

Husing, along with speedway President Bill Miller, announced the findings of an economic impact study commissioned by the speedway and conducted by Husing at an Inland Empire Economic Partnership breakfast in San Bernardino, Calif., this morning.

According to Husing, “the $135.7 million in economic impact is derived from $106.0 million in economic activity and $29.6 million plus in household earnings. The findings reveal $29.4 million in funds used to directly support the track, along with $44.6 million that comes from outside people spending money at places like hotels, restaurants and gas stations, with that money changing hands at least once for a total of $76.6 million. That number is combined with the $29.4 million for the economic output ($106.0 million).”

The household earnings figure ($29.6 million) in Husing’s report comes from an estimation of 1,165 jobs that have been created in the general economy as a result of the speedway’s existence, along with the 50 full-time positions at the speedway.

“There is no disputing the impact California Speedway has made on the local economy,” said Husing, who performed an economic impact study about the speedway in 1994, three years before the speedway hosted its first event. “A once blighted steel mill and depressed area is now a growing, healthy commercial success story. The speedway has provided an economic boon to the area. Case in point is the building of several new hotels and restaurants in the area with several more in the discussion phase.

“The hotels are benefiting greatly,” continued Husing. “When a race comes to town, hotels sell out at a premium rate, resulting in an increase in revenue that would not be realized without the speedway.”

The speedway’s 2003 event calendar concludes November 1-2 with the CART Champ Car 500 and NASCAR Winston West 200. Other events on the schedule in 2003 included the Yamaha Superbike Challenge AMA Chevy Trucks U.S. Superbike Championship Series doubleheader in early April, followed by the NASCAR Winston Cup Series Auto Club 500 weekend at the end of April. With an estimated 125,000 people in attendance, the Auto Club 500 is the largest ticketed single-day sporting event in the state. In June, the speedway hosted two sports car races, the Grand American Rolex Sports Car Series weekend and the Southern California Historic Sports Car Festival. In late September, the Indy Racing League IndyCar Series and the NASCAR Craftsman Truck Series competed at the speedway.

In addition to the major racing event weekends, the speedway had approximately 290 rental days ranging from racing schools, commercial shoots, street legal drag racing, car shows to swap meets.

“The profile of the people coming to the speedway for these rental days mirrors that of the speedway’s racing events,” said Husing. “We are talking about local residents and regional and national travelers who wouldn’t be coming to the area without the speedway.”

One of the key findings of Husing’s report is what happens in 2004 when the speedway’s schedule includes a second major NASCAR weekend. In addition to the spring Auto Club 500 weekend, the speedway will host the September Labor Day Weekend “Finish Under the Lights” Pop Secret 500.

“We expect the economic impact of the second NASCAR weekend in 2004 to rise by at least the same amount as the one race in 2003 ($84.7 million),” said Husing. “That would bring the total to about $220 million and more than 1,900 jobs, further solidifying the importance of the speedway to the area.”

Other findings in the report include property taxes, sales taxes and transit occupancy taxes “that result in approximately $4.2 million in taxes flowing to area jurisdictions, mostly in San Bernardino County,” said Husing.

One last benefit from the speedway includes the national television exposure generated from its major events, including the 2003 Auto Club 500 NASCAR race, which had more than five million viewers (5.3 rating) on the Fox television network.

“Using the NASCAR race as an example, it’s akin to a three-hour plus commercial where the area is in the national spotlight,” said Husing.

“We appreciate the efforts of Dr. Husing in conducting this study,” said Miller. “The speedway has come a long way in a short period of time, accomplishing many of the goals established for it, most notably being an economic catalyst for the area. We will continue to work with elected officials and business leaders to continue the momentum of economic growth in our area and throughout the region.”


From another release issued by California Speedway:

THE CALIFORNIA SPEEDWAY

ECONOMIC IMPACT REPORT, 2003

John E. Husing, Ph.D.

THE CALIFORNIA SPEEDWAY ECONOMIC IMPACT REPORT, 2003
John E. Husing, Ph.D.

Executive Summary

The economic role of the California Speedway is analogous to a gold mine in an Old Western town.

Its operations bring money to the Inland Empire that otherwise would not be in the region (money to the gold miners). In 2003, that amount was $29.4 million. In addition to supporting the track, these same dollars support households and businesses throughout the Inland Empire when the track spends much of this money locally buying labor, goods and services. The area’s households and businesses also benefit from the fact that the people who come to the track spend money at places like local hotels, restaurants and gas stations. The combined spending in the local economy by the California Speedway plus the visitors it brings to the area was $44.6 million in 2003 (spending by the gold miners that supports general stores & saloons).

Once the $44.6 million hits the local economy, much of it changes hands locally at least once as workers are paid and goods and services bought the companies that receive it. Through this process a total of $76.6 million in economic output and $24.4 million in added household earnings is created in the region in 2003. In addition, a total of 1,165 jobs for people who may not even realize that the track’s operations are the reason they are employed. This process is akin to what happened in port cities during the 1940’s and 1950’s when the Navy paid its sailors in $2.00 bills so the town’s people could see how important the fleet was to their economy.

When these amounts are added to the $29.4 million in funds directly supporting the California Speedway, as well as the $5.2 million in household income from purveyors, the total impact of the California Speedway on the Inland Empire is $106.0 million in economic activity and $29.6 million in household earnings that would not exist without it. Altogether, the dollar economic importance of the California Speedway to the Inland Empire is thus the sum of these or:

· Total 2003 economic impact: $135.7 million
In addition, when the 1,165 jobs created in the general economy are added to the track’s 50 full-time positions:

· Total 2003 job impact: 1,215
Finally, as the California Speedway functions, a variety of local governments in San Bernardino County collect annual taxes:

· Total 2003 impact: $4.2 million
Property taxes based upon the track’s $200.8 million in assessed valuation are collected by the county government and mostly dedicated to local schools and the San Sevaine Redevelopment project. In the latter case, the track’s success is largely responsible for funding the infrastructure necessary to turn the entire area that was once a rusting steel mill, huge slag heap and poisonous superfund sight into a brand new manufacturing, logistics and commercial area. The annual cash flow for this purpose is $2,011,532. Before the track was built and expanded, the valuation was just $10 million generating taxes of just $100,000.

Sales taxes are collected on a variety of functions supported by the California Speedway. These include the meals which tourist and crews eat in restaurants, the souvenirs purchased on and off of the track, the fuel purchased on and off of the track and miscellaneous retail spending in the economy. This spending totals $23.3 million and generates $232,544 in annual sales taxes, the majority of which goes to San Bernardino County as much of the spending occurs in unincorporated areas. Also, California Speedway directly pays another $216,307 per year in sales taxes as a result of its own purchases.

A last sales tax item is $116,272 per year that goes to the San Bernardino Associated Government due to the 0.5% Measure I sales tax rate applied to the $23.2 million in sales. This is used for San Bernardino County transportation projects.
Transit occupancy taxes are collected by almost every Inland Empire jurisdiction on its hotel rooms. The average rate for this tax is 8.5%. Using that average, the $19.1 million in hotel room rental fees would generate $1,321,069 for various Inland Empire jurisdictions.

On an annual basis, the California Speedway is thus the cause of some $4.20 million in taxes flowing to inland jurisdictions mostly in San Bernardino County.

NASCAR RACE

Using similar logic, it was found that in 2003 a NASCAR race has the following impacts:

· Total Inland Empire economic impact: $84.7 million

· Total Inland Empire job impact: 736 jobs including the speedway’s 50 full time staff

California Speedway’s Near Future

With the California Speedway now scheduled to have a second major NASCAR event on Labor Day of 2004, the total economic impact of the track will rise by at least the amounts shown for the existing NASCAR Race. Thus, the new total impact will be:

· Total Inland Empire economic impact: $220 million

· Total Inland Empire job impact: 1,901 jobs including the speedway’s 50 full time staff

NOTE: In 1994, this analyst predicted that the California would reach $136 million in economic impact and 1,360 jobs when it had two NASCAR and one CART race. In 2003, it almost exactly reached the economic impact target with just one NASCAR race, one CART race, and a variety of other activities. In 2004, it appears that the facility will far exceed the original predictions.