Economic Impact Report Baltimore Racing Development, LLC

Baltimore Grand Prix MAY 3, 2010

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Economic Impact Report Table of Contents The Baltimore Grand Prix and the Festival of the Baltimore Grand Prix (An entire weekend of racing-related events)

Section One The Benefits to Baltimore and the State of Maryland to Hosting the Event

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Section Two Background on Baltimore and the Region & Comparison to other Regions

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Section Three The Tax Revenues Generated by the Grand Prix to the City of Baltimore, the Surrounding Counties and the State of Maryland

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Executive Summary Table Summary of Fiscal Revenues Hotel Revenue within the City Hotel Revenue outside the City Meal Tax Revenue Retail Sales Tax Revenue and A & A Tax on other non-GP Activities Admissions and Amusement Tax on Grand Prix Tickets Job Creation and Income Taxes Parking Taxes and Fees Value of Media Exposure

15 16 17 18 19 20 21 22 23 24

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Section One Benefits to the City of Baltimore and the State of Maryland in Hosting the Baltimore Grand Prix Yearly Benefits Derived from Baltimore Grand Prix Event - Over $70,000,000 into the local economy. - $119,000,000 with the multiplier effect. - Over $6,000,000 in direct tax revenues. - 400 new full time equivalent jobs. - 58,000 hotel room nights.

Summary

Over 5 years, more than $350 million to the regional economy and $30 million in tax revenues.

The Financial Benefits to the Economy of the Region Over a four day period, the Grand Prix, will bring over 100,000 visitors to the City of Baltimore. The spending by these visitors is expected to generate $70 million infusion to the economy of Baltimore and Maryland in the first year. With the indirect costs and induced costs (the Multiplier Effect), this represents $119 million into the regional economy and over $6 million in tax revenues each year.

This includes:

Within the City

Outside the City

Totals

Hotel Room Nights

$ 6.2 million(28,200 HRNs)

$ 6.55 million(29,800 HRNs)

$12.77 million on 58,000 HRNs

Food and Bevearge

$ 9 million

$ 3 million

$12 million spent on 490,000 meals

Retail Sales

$15 million

$ 5 million

$20 million

Other Entertainment

$ 7.5 million

$ 2.5 million

$10 million

Local Transportation

$ 2.25 million

$ 0.75 million

$ 3 million

Grand Prix Costs

$ 9-10 million

$ 3-4 million

$12-14 million

Totals

$48.95-$49.95 million $20.75-$21.75 million

$69.77-$71.77 million

In addition to this, there will $5.5 million in national and international media exposure for the the City of Baltimore. This includes 90,000 man-hours of work to assemble and then to disassemble the race.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230

Spin off industries such as vendors and other related work will create the equivalent of 400 full time jobs based on economic review of other events.

www.BaltimoreRacingDevelopment.com

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National Exposure The Grand Prix Event will be a 3-hour nationally televised commercial for the City of Baltimore. No other event, besides the Olympics, will bring as much national exposure. BRD estimates that as many as 6-7 million people around the world will see the Grand Prix on television, and it is reasonable to anticipate that some number of these viewers will make Baltimore a vacation destination. One of the IRL representatives who participated in the site [November 2008] visit to Baltimore was the IRL's Head of Film Production. The IRL is well-aware of the impact visuals will have on their viewers, and the positive feedback BRD received after the site visit underscores that the IRL appreciates how beautiful and photogenic the City and Harbor will be.

One of the many car races held in St. Petersburg prior to the Grand Prix

In addition to attracting individual tourists, the Baltimore Grand Prix Event can be a convention marketing tool. What better way to show off the City’s ability to host a major convention than to show one in progress? In addition to the event television coverage, BRD is planning national radio and print exposure for the Event, and a significant pre-event marketing campaign.

The Baltimore Grand Prix will . . . 1. attract businesses and jobs to Baltimore 2. be a major catalyst for changing the national perception of Baltimore 3. bring a positive national spotlight to the City, every year the event is held

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Demographics of the Event The typical Grand Prix Fan is better educated and has a higher income than other sports fans and they will spend more money at an event. 60% will be from out of the region and about 20% will be from out of the state, but within the region of (DC, VA, DE), and about 20% from within Maryland. Based on the central location of Baltimore on the East Coast, the ease of access offered by transportation infrastructure and the higher income of the region, we project that the Baltimore Grand Prix will have a higher attendance with the visitors spending more money than the Toronto, Detroit, or St. Petersburg street course events.

Distance and Time from Major Cities Washington DC

Philadelphia

NYC

Boston

Indianapolis

Miles from Baltimore 38

104

192

422

600

Time by Car

40 minutes

1hr 45min

3hrs 30min

7hrs 30min

(only 3hrs by IndyCar)

Time by Rail

40

2hrs

3hrs 25 min

6hrs

8hrs

Time by Air

0

0

1hr 10 min

1hr 25 min

1hr 50 min

IRL Fan Base

Indicated in Red - Keep Your Eye on the Star

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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$100,000 % of Population Ages 18-65 County Average 64.8%

$80,000

$67,828 County Average

$74,599 Calvert

$68,815 Carrol

$76,957 Montgmery

$55,129 Prince George's

$80.904 Howard

$66,087 Anne Arundel

$48,201

$52,308 Baltimore

Median Household Income

U.S. Average

$20,000

IRL Fan Base

$40,000

$80-85,000

$60,000

While nationally the Median Household Income is $48,201; the counties around Baltimore are 40% wealthier and have 25% higher percentage of college graduates ( 34.7% vs 27.7%) than the national averages. All figures are from the U.S. Census Bureau except for the IRL Fan base which is from “IndyCar Series at a Glance 2007.”

100%

Rank

County

Median Household Income

1

Fairfax County, Virginia

$100,318

2

Loudoun Co., Virginia

$99,371

3

Howard Co., Maryland

$94,260

4

Hunterdon Co., New Jersey $93,297

5

Douglas Co., Colorado

6

Somerset Co., New Jersey $91,688

7

Morris Co., New Jersey

8

Montgomery Co., Maryland$87,624

9

Arlington Co., Virginia

$87,350

10 Nassau Co., New York

$85,994

11 Marin Co., California

$85,892

12 Stafford Co., Virginia

$85,014

13 Calvert Co., Maryland

$84,891

$92,125 $89,587

14 Santa Clara Co., California$84,838

% High School

15 Forsyth Co., Georgia

$83,682

16 San Mateo Co., California $82,123

80%

17 Putnam Co., New York

$81,907

18 Williamson Co., Tennessee $81,449 19 Prince William Co., Virginia $80,783 20 Alexandria City, Virginia

60%

$80,449

% Bachelor's degree Baltimore is within a 4 hour drive of 14 of the 20 wealthiest counties in the USA. Source: US Census Bureau: 2006 Census

County Average

Calvert

Carrol

Montgmery

Prince George's

Howard

Anne Arundel

Baltimore

Education

U.S. Average

20%

IRL Fan Base

40%

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Fan Demographics from the Long Beach Grand Prix

GENDER male female

58% 42%

AGE GROUPS 18-24 25-34 35-44 45-54 55 +

14% 26% 27% 15% 11%

MARITAL STATUS Married 52% Single 48% EDUCATION College Graduate51% Some College 40% High School 4%

RACE White Hispanic Asian African-American Other

51% 28% 12% 6% 3%

HOUSEHOLD INCOME 250k+ 8% $150k – 240k 14% $100k – 149k 25% $75k – 99k 20% $50k – 74k 20% Under $50k 13%

Excerpt from Long Beach Sponsorship Proposal

Baltimore Racing Development expects that the Baltimore Grand Prix will have similar demographics as the Long Beach Grand Prix. Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Hotel Nightly Stays Visitors to the Baltimore Grand Prix / Weekend of the Race We expect approximately 100,000 visitors with 60,000 (60%) staying at least one night. The visitors will use 30,000 hotel rooms for at least one night and a total of 58,000 hotel room nights. This figure of 60% is common at other race events such as the Cleveland Grand Prix. Hotels within the City are the most desirable and visitors will stay there the longest for the Grand Prix. We project at least 10,000 hotel rooms within the City at the inaugural race, however some will not be suitable for such visitors. Thus, we are projecting 8,400 available hotel rooms. The chart below is based on double occupancy.

Within Baltimore City One Night Two Nights Three Nights Four Nights + Totals

8,400 8,400 8,400 3,000 28,200

Outside the City

State Total

21,600 6,600 1,600 n/a 29,800

30,000 15,000 10,000 3,000 58,000

Additionaly, the Convention Center will be fully utilized for the four days of the event as: an exhibition hall for vendors; for a black tie charity ball and hospitality areas.

TV Exposure and Value The Indy 500 race has over 5 million TV viewers in the U.S. It is the most watched motorsport event in the country. The event also has the largest live attendance of any sporting event in the country. The average IndyCar race on ABC has 2.7 million U.S. viewers. In 2008, they had a 10% increase in TV viewers over 2007. By 2011, BRD projects that the IndyCar Series will grow and the average GP audience on TV will be about 3.5 million U.S. viewers. The races are broadcast around the world and this doubles the potential total TV audience to 7 million. If just 1% of the Event viewers choose to visit Baltimore as a result of Baltimore Grand Prix publicity, that will be 70,000 new tourists and an additional $35,000,000 in tourist revenue for the City and its businesses ($500/person/visit).

IRL fans watching the 2009 St. Petersburg Indy Race

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Summary Our projections with respect to the economic impact created by the Baltimore Grand Prix are higher than street races in cities like St. Petersburg and Long Beach, because of the unique location and demographics enjoyed by Baltimore City. The other street races have been held on the periphery of the North American population centers. If you go further than 50-100 miles from these other events the population density decreases dramatically. None of them have the combined wealth of the Mid-Alantic Region. At other race locations (i.e. Toronto, Edmonton, St. Petersburg, Detroit, and even Long Beach) the population declines significantly after a distance of 50-100 miles (or a 1-2 hour drive away). The population density grows as you drive 100-400 miles away from Baltimore. BRD will market the Baltimore Grand Prix heavily in these densely populated areas like Washington, DC, Philadelphia and New York City. Of the 100,000 spectators BRD expects 60,000 (60%) to reside in areas beyond 100 miles from Baltimore. Most will be travelling by car, train, bus and air. As a result, they will not likely be “day-trippers”. We project that many of our guests will make a weekend of it and will take advantage of the many attractions that Baltimore has to offer. Baltimore is more accessible to more people than other street races and we expect our visitors to use more hotel room nights than in other cities and they are likely to be wealthier and spend more while doing so.

Baltimore Racing Development 1200 South Charles Street Above: IRL fans taking a break from the 2009 St. Petersburg Indy Race Column on Right: View IRL fans get from the bleachers (seen in uper right corner of above photo)

Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Section Two How Baltimore Stacks Up with Existing Host Cities Population, Firms and Wholesale Trade within a 400 mile Radius of Race Cities Population*

Firms**

Wholesale Trade

Detroit, MI

33,250,000

1,837,000

$790 Billion

Long Beach, CA

36,000,000

3,000,000

$656 Billion entire state of CA

Portland, OR

10,095,000

767,000

$142 Billion

St. Petersburg, FL

18,089,000

1,500,000

$219 Billion entire state of FL

Toronto, Canada

27,200,000

(unk.)

$714 Billion (including 1/3 entire CAN. GDP)

Baltimore, MD

70,215,000

6,165,000

$1.2 Trillion

* The population numbers indicate the potential for Ticket Sales and the exposure for Sponsors. **The number of firms indicates the potential for Hospitality Units and Sponsorships. All figures from US Census Bureau, except Toronto

Gross Metropolitan Product (GMP) of the U. S. Metro Areas surrounding Grand Prix Events (from the U.S. Conference of Mayors 2007) Tampa-St. Peterburg-Clearwater, FL Miami-Fort Lauderdale-Miami Beach, FL GMP within about 200 miles of St. Petersburg Grand Prix

$110.5 Billion $206.1 Billion $316.6 Billion

Los Angeles-Long Beach-Santa Ana, CA San Diego-Carlsbad-San Marcos, CA Riverside-San Bernadino-Ontario, CA GMP within about 200 miles of the Long Beach Grand Prix

$604.8 Billion $143.4 Billion $133.0 Billion $881.20 Billion

New York-Northern, NJ-Long Island Washington-Arlington-Alexandria,DC-VA Philadelphia-Camden-Wilmington, PA-NJ-DE Baltimore-Towson, MD Virginia Beach-Norfolk-Newprt News, VA Richmond, VA GMP within about 200 miles of Baltimore Grand Prix

$952.6 Billion $300.4 Billion $264.8 Bilion $121.6 Billion $ 78.6 Billion $ 56.8 Billion $1.775 Trillion

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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A Snapshot of Baltimore Population, Economics and Accomodations

1. Population

The City of Baltimore has 640,000 people. The Baltimore Metropolitan Area has 2.65 million people. The Baltmore - Washington D.C. Area has 8.1 million people.

2. Gross Metropolitan Product

Best measurement of the wealth of a city or region. 1. The Baltimore Metropolitan Area has $112 billion GMP. 2. The Washington D.C. Metro Area has GMP of $276 billion. 3. The combined total of $388 billion is only surpassed by NYC, LA and Chicago

3. Development in the City

The City of Baltimore is a growing and dynamic city. 1. Last 30 years - There has been well over $50 billion in development over the past 30 years. 2. Past 5 years - There has been over $10 billion of construction completed in the past 5 years. 3. Under Construction - There is over $5 billion under construction now. This includes 15 new downtown hotels with 10 more being fully renovated, making virtually 25 new hotels in downtown Baltimore all to be completed by 2010. 4. Starting next 3 yrs - There is another $5 billion permitted and ready to begin.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 Fax 410-252-0025 www.BaltimoreRacingDevelopment.com From Federal Hill you can see the Ritz Carlton on the right and the Pier 6 Concert Pavilion across the Harbor.

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4. Baltimore Business Economy Corporate Headquarters and Major Branches of Corporations in Baltimore, Maryland and Washington D.C. The City of Baltimore is a dynamic rising city with $15 billion of new development underway, including 25 new downtown hotels (15 brand new and 10 being fully renovated.). It has many new hi-tech firms based on the proximity of its excellent educational institutions. Greater Baltimore is home to a number of Fortune 1000 companies, including Lockheed Martin, Constellation Energy, (the former Baltimore Gas and Electric, now in 27 states), Marriott International, Coventry Health Care, Host Hotels, W.R.Grace Chemicals,Black & Decker (which owns DeWalt tools,) Legg Mason, T. Rowe Price, and McCormick & Company. Other companies that call Baltimore home include, Brown Advisory, Alex Brown, a subsidiary of Deutsche Bank (an F1 sponsor), FTI Consulting, Vertis, Thomson Prometric, Performax, Sylvan Learning, Under Armour, DAP, 180°, Old Mutual Financial Network, Advertising.com. Accenture and Ceratech.

GEICO Insurance, MBNA

and

Bank of America, M & T Bank

and

Other major companies in Maryland are Comcast Cable. Major banks within Maryland are

Mercantile Bankshares.

We also expect to pull in many of the corporations in Washington D.C. for sponsorships and hospitality suites. We expect a lot of interest from the financial service sector, law firms, real estate firms and D.C. lobbyists in our hospitality units. In 2004, the Greater Baltimore-Washington D.C. Metropolitan Area was ranked the

4th wealthiest region in the country behind only, New York, L.A. and Chicago.

Baltimore is also the home of the NFL Ravens and the MLB Orioles and many fine colleges and universities such as Johns Hopkins and Loyola. Also by 2010, over 200 million gallons of ethanol will be produced in the state of Maryland. This is a region where the IRL and the Baltimore Grand Prix can expect to do very well.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 Fax 410-252-0025 www.BaltimoreRacingDevelopment.com

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5. Hotels Within Walking Distance of Race Holiday Inn Inner Harbor 301 West Lombard Street Baltimore, MD 21201 Intercontinental Harbor Court 550 Light Street Baltimore, MD 21202 Residence Inn by Marriott Baltimore Downtown/Inner Harbor 17 Light Street Baltimore, MD 21202 Radisson Plaza Lord Baltimore 20 West Baltimore Street Baltimore, MD 21201 Hampton Inn and Suites Baltimore Inner Harbor 131 East Redwood Street Baltimore, MD 21202

Admiral Fell Inn 888 S. Broadway The Pier 5 Hotel 711 Eastern Avenue

Tremont Plaza Hotel 222 St. Paul Place Baltimore, MD 21202

There are currently 30 hotels with 7,442 hotel rooms in downtown Baltimore. There are another 21 hotels with 1,565 rooms within Baltimore but beyond one mile of Hampton Inn Baltimore Camden Yards downtown. Within the Baltimore 550 Washington Boulevard Metro Region there are another 32 Baltimore, MD 21230 hotels with 3,193 rooms for a total of 12,200 rooms. Baltimore has Clarion Hotel Peabody Court another 12 hotels under construc612 Cathedral Street tion with another 1,218 rooms. Baltimore, MD 21201 According to the Baltimore Area Biltmore Suites Hotel Convention and Visitor Association 205 West Madison Street (“BACVA”) Baltimore has another Baltimore, MD 21201 21 hotels in various stages of planning with possibly another 3,000 Marriott Baltimore Waterfront rooms and almost all being within 700 Aliceanna Street one mile of downtown. If all were Baltimore, MD 21202 built, the total would be 16,418 Courtyard by Marriott Baltimore hotels rooms, a 35% increase, by Downtown 2011. 1000 Aliceanna Street Baltimore, MD 21202

Hyatt Regency Baltimore 300 Light Street Baltimore, MD 21202

Holiday Inn Express at the Stadium 1701 Russell Street Baltimore, MD 21230

Tremont Park Hotel 8 East Pleasant Street Baltimore, MD 21202

Bridgestreet Lancaster Square 724 South Wolfe Street Baltimore, MD 21231

Brookshire Inns and Suites 120 East Lombard Street Baltimore, MD 21202 Sheraton Baltimore City Center 101 West Fayette Street Baltimore, MD 21201 Days Inn Inner Harbor Hotel 100 Hopkins Place Baltimore, MD 21202 Renaissance Harborplace Hotel 202 East Pratt Street Baltimore, MD 21202 Sheraton Inner Harbor Hotel 300 South Charles Street Baltimore, MD 21201

Marriott Baltimore Inner Harbor At Camden Yards 110 South Eutaw Street Baltimore, MD 21202

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 Fax 410-252-0025 www.BaltimoreRacingDevelopment.com

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The Impact of the Current Economic Climate on the Baltimore Grand Prix of 2011 Attendance Expectations The 2009 St. Petersburg Grand Prix has 130,000 fans attend. The 2009 Long Beach Grand Prix had more than 200,000 attend. Given the central location of Baltimore on the I-95 corridor, we expect that attendance will be strong. BRD plans to implement a national marketing plan for the event and we expect a high attendance.

Hospitality Units Hospitality Units are a way for companies to thank their best customers and employees. In 2008, at the Detroit Grand Prix, they had 69 units and BRD expects to have over 100 units at the Baltimore Grand Prix. There are over 3 million firms within 200 miles of Baltimore. Many major companies have their headquarters in the Mid-Atlantic Region. We expect strong demand for our Hospitality Units.

IRL fans passing thru security gates in St. Petersburg

Sponsorship No matter the state of the economy, companies need to market and sell their products; be they selling financial services, cars, beer, or insurance. Sponsorship has proven itself a powerful marketing tool. The Indy Racing League has an upscale fan base and other street events have had strong sponsor support. Given the strong demographics and corporate base within 200 miles of Baltimore, we expect sponsors to be an important source of funding for the Baltimore Grand Prix.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com IRL fans enjoying a great day of racing in St. Petersburg.

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Section Three The Tax Revenues Generated by the Grand Prix for the City of Baltimore, the Surrounding Counties of Maryland and the State of Marlyland Executive Summary The Grand Prix will generate over $6.1 million in tax revenues to the City, Counties and State each year. This is over $30 million over 5 years and $60 million over ten years. This includes over $2.2 million to the City Of Baltimore each year and $11 million over 5 years and $22 million over 10 years to the city. This estimate does not include any additional corporate income taxes received by the State as a result of the race and related events. This above estimate is based on direct costs only, not indirect or induced costs. If we apply the standard U.S. Commerece Department Multiplier Effect of 1.7, for indirect and induced costs, then the tax revenue will be over $10 million every year. This means that the most likely tax revenue impact of the Baltimore Grand Prix will be over $50 million over 5 years and over $100 million over ten years. This includes over $3.7 million to the City and over $18.7 million over 5 years and over $37.4 million over 10 years. The Grand Prix will not only be a source of revenue of tax revenue to the City of Baltimore, the surrounding counties i.e. Baltimore County, Howard County, Anne Arundel County and the State of Maryland, but it will also generate 400 FTE jobs. Perhap the most important benefit of the Grand Prix is the national and international exposure that will be generated by tourism to, and the television coverage of the Grand Prix. If re-branding Baltimore as a destination for world class sports events is a desired goal, then BRD believes the Baltimore Grand Prix is tailored to serve that goal exceptionally well. The San Jose Sports Authority put a value of $4,600,000 on the media exposure for the San Jose Grand Prix. The Baltimore Grand Prix will be better attended, have better marketing and we expect it to be on ABC. The BGP media exposure will be at least equal to if not greater than the San Jose impact.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Summary Table of the Tax Revenues Generated by the Baltimore Grand Prix

Tax Type

State Income

City Income

County Income

Total

$ 757,680

$ 465,300

$ 321,200

$1,544,180

N/A

$ 991,250

N/A

$ 991,250

Hotel Room Tax Amusement Tax (Grand Prix Tickets) Amusement Tax (Non GP related)

$

84,000

$ 121,300

N/A

$ 205,300

Retail Sales

$1,200,000

N/A

N/A

$1,200,000

Meals Tax

$ 735,000

N/A

N/A

$ 735,000

N/A

$ 440,000

N/A

$ 440,000

Personal Income Tax $ 500,000

$ 250,000

$ 250,000

$1,000,000

$ 2,267,850

$ 571,200

$6,115,050

Parking Income

Totals

$ 3,276,000

The Grand Prix will generate over $6,100,000 in direct fiscal income to the City, Counties and State each year.

This will be over $30,500,000 over five years and over $61,000,000 over ten years. This does not include any additional corporate income taxes received by the State because of the event. This includes over $2,200,000 to the City of Baltimore each year and $11,000,000 over 5 years and $22,000,000 over 10 years to the City.

Multiplier Effect The above numbers are based on all direct costs with no indirect costs nor induced costs. If we apply the standard U.S. Commerce Department Multipler Effect of 1.7, for indirect and induced costs, then the fiscal tax revenue will be over $10,000,000 every year. This is $50,000,000 over 5 years and over $100,000,000 over 10 years in fiscal revenues. This includes over $3,740,000 to the City of Baltimore each year and over $18,700,000 over 5 years and over $37,400,000 over 10 years. Baltimore Racing Development

The information above is based on certain assumptions -- about attendance, hotel room usage, retail and meals sales and non-Grand Prix entertainments -- that are explained in detail in the pages that follow.

1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Hotel Rooms: Income and Tax Revenues City of Baltimore, surrounding Counties and the State of Maryland The charts that follow reflect BRD's calculations of anticipated hotel income and revenue to taxing authorities, based on the estimate of hotel room nights that are likely to be used by Grand Prix visitors. (see page 8)

Hotel Rooms within the City

@ $200/night @$220/night

@$250/night

@$300/night

Hotel Income 8,400 Rooms

$ 1,680,000

$ 1,848,000

$ 2,180,000

$ 2,520,000

28,200 HRNs (all HRNs)

$ 5,640,000

$ 6,204,000

$ 7,050,000

$ 8,460,000

State Revenue (6%) $

338,400

$ 372,240

$ 423,000

$ 507,600

City Revenue (7.5%) $

423,000

$ 465,300

$ 528,750

$ 634,500

Combined Tax Revenues $ 761,400

$ 837,540

$ 951,750

$ 1,142,000

As shown on the chart on page 4, Grand Prix visitors staying in Baltimore will use 28,200 Hotel Room Nights. At $220 a night - the assumed most likely rate - that usage will generate $ 6,204,000 in revenue to the City's hotels. The City hotels' income will in turn yield City tax revenue (7.5%) of $465,300 and State tax revenue (6%) of $372,240. The combined total of hotel room tax revenue within the City will be $837,540.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Hotel Rooms Outside of the City Outside the city, BRD assumes that overnight visitors will use another 29,800 hotel room nights, over three nights. The hotels rooms will be located throughout the surrounding Maryland counties. BRD's estimates are based on Grand Prix visitors using 21,600 hotel rooms for one night and 6,600 hotel rooms for a second night and 1,600 for a third night.

@ $200/night

@ $220/night

@ $250/night

@ $300/night

21,600 Hotel Rooms $4,320,000 (one night)

$4,752,000

$5,400,000

$6,480,000

6,600 Hotels Rooms $1,320,000 (two nights)

$1,320,000

$1,650,000

$1,980,000

1,600 Hotel Rooms (three nights)

$ 320,000

$ 352,000

$ 400,000

$ 480,000

Hotel Income

$5,960,000

$6,424,000

$7,450,000

$8,940,000

Counties HRTax (5% av.)

$ 298,000

$ 321,200

$ 372,000

$ 447,000

State Tax Revenue (6%)

$ 357,600

$ 385,440

$ 447,096

$ 536,400

Total Tax Revenues

$ 655,600

$ 706,640

$

$ 983,400

819,096

When the City combined hotel tax revenue of $837,540 (page 8) is added to the most likely combined hotel tax revenue from hotels outside Baltimore, the total estimated tax revenue is $1,544,180. This revenue will be generated each year by the Baltimore Grand Prix. The total statewide hotel revenue assumes 58,000 hotel room nights, generating an estimated income for the hotels of $12,628,000, and is based on an average room rate of $220/night. According to BACVA, the average room rate in the City during the 2008 summer tourist season was $180-$200. Based on the experience of other cities that hold similar grand prix events - St. Petersburg and Long Beach - it is not unusual for room rates to rise by at least 50%-100%

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Tax Revenue from Meals (food & beverage) bought by the Visitors of the Baltimore Grand Prix Days @ Event

# of Visitors

% of Visitors

Meals Purchased

1 Day

100,000

100%

100,000 (1 purchased)

2 Days

60,000

60%

180,000 (3 purchased)

3 Days

40,000

40%

120,000 (3 purchased)

4 Days

30,000

30%

90,000 (3 purchased)

Total Meals Purchased

At an average of $25 per meal or $75 per day

490,000

$12,250,000

The State Revenue at a 6% rate is $ 735,000 each year on meals. The Federal Employee Per Diem for Meals in Baltimore is $62.54 ($59 not including taxes). The Grand Prix Visitors are on vacation and tourism data suggests they will spend more than that amount, on average. Breakfasts and Lunches may average around $10 but dinners will average $50-$60 for food and beverage.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Retail Sales Tax for the Visitors of the Baltimore Grand Prix The average IndyCar fan is in a high socio-economic bracket. At the Long Beach Grand Prix, 47% of the visitors have a household income of over $100,000 and 22% have a household income over $150,000. The Baltimore GP fans will be a similar demographic, if not higher. They will spend on average $200 per person on merchandise, gifts, souvenirs etc. Some may spend $25 but many will spend over $400. With 100,000 visitors, the value of retail sales will be $20,000,000. With the 6% State Sales Tax, this is $1,200,000 in revenue.

Vendor sales at the Toyota Long Beach Grand Prix

Admissions and Amusement Tax for other events during the Baltimore Grand Prix Of the 100,000 visitors, 60,000 will be staying at least one night and many of them will go to other types of non-race related entertainments such as museums, movies, cruises, concerts etc. It is unlikely that the visitors at the race just for the day will do other activities, but many of the multi-night visitors will visit local attractions and attend special events. Based on the number of venues and activities within Baltimore that subject to the City Admissions & Amusement Tax, the total taxes colllected from these activities is estimated to be $121,300 to the City.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Admissions and Amusement Tax revenue for the City from the Baltimore Grand Prix Admission

High Range Estimate Price

Tickets

Income

Reserved 3 Day Super Grand Stand (includes Pit Pass)

$ 199

16,000

$ 3,184,000

Reserved 3 Day Grand Stand

$ 149

34,000

$ 5,066,000

3 Day Grounds Admission

$ 99

15,000

$ 1,485,000

Sunday Only Grounds Admission

$ 69

35,000

$ 2,415,000 $12,150,000

Low Range Estimate Reserved 3 Day Super Grand Stand ( includes Pit Pass)

$ 179

12,000

$ 2,148,000

Reserved 3 Day Grand Stand

$ 129

2,000

$ 1,548,000

Sunday Only Reserved Grand Stand

$ 90

26,000

$ 2,340,000

3 Day Grounds Admission

$ 79

12,000

$

Sunday Only Grounds Admission

$ 59

38,000

$ 2,242,000

948,000

$ 7,678,500

Median

$ 9,914,250

10% City Tax Revenue

$ 991,425.

All tickets that are included in the Hospitality Suites and the Sposnsorships are taxed at face value. Less than 1% of the total number of tickets are given away to media, IndyCar Racing League officials, volunteers and to charities.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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Creation of Jobs and Grand Prix Income Tax Revenue The construction of the race course - which entails putting up concrete barriers and fencing, pedestrian bridges, several miles of cables etc. - will involve approximately 90,000 man hours. Total construction costs will be $5-$6,000,000, of which $2,000,000 alone will be spent on labor to assemble and construct course fencing and barriers. The GP will use > 2,400 concrete “jersey” barriers, which will be built locally. Estimated cost is > $3,000,000. Approximately 75% of all the materials' costs and labor will be local.

Full Time Equivalent Jobs for the Baltimore Grand Prix

The GP will generate or create a total of 400 FTE jobs. These jobs will be either new employees or existing employees getting more hours.

150 Hotel/Hospitality 60 Restaurant 45 Construction 40 Transportation 40 Retail 20 Event Organizer 15 Catering 8 Security 22 Advertising, Media, Concert Venues, Equipment Rental, Shipping and Delivery, etc.

The largest jobs categories will be in the hotel, restaurant and catering industries. Those segments will generate approximately 62% of the jobs. Transportation workers will be needed at all levels and for all modes of transportation. Other segments that will require new workers or expanded hours are security, advertising, concert venues, shipping and delivery, equipment rentals etc.

Restaurant, Retail, and Entertainment Expenditures are $800-$1000 per visitor, according to several other economic impact reports. Checkered Flag Report “Economic Benefits Analysis of a Motor Speedway in the Puget Sound Region” 2004 Arizona State University “Report on the Economic Impact of the Phoenix International Raceway” 2002 Great Western Sports. Inc. Kilsap County (Bremerton) WA “Economic Impact of a Motor Speedway” 2005

The event organizer will hire a staff of 20 FTE. According to the State of Maryland, the median personal income is $48,000. Based on the 400 FTE jobs, The Grand Prix will generate $19,000,000 in new income for the area. This is over $1,000,000 in additional personal income tax. If half the workers live in the City, this is about $250,000 for the City. Another $250,000 distributed among the Counties of the State. The State will receive about $500,000 in personal income tax. A full-time job represents 2000 hours of work (40 hours x 50 weeks). Based on that formula, the 90,000 man-hours that will be required to construct and disassemble the race track translate into 45 FTE jobs. Housing, feeding and transporting 100,000 visitors, of whom 60,000 will stay at least one night, will require all types of businesses in Baltimore to hire more people or expand the hours of current employees. All of the Grand Prix visitors will want to shop, to be entertained, to eat, and to be kept safe in the time before and after the race. The income detailed in the chart is direct income. It does not take into account the indirect benefits and the recirculation of income, such as the bus driver who buys his wife a gift at a local shop after getting his overtime pay.

University of Connecticut “Report on Economic Impact The New England Raceway” 2004 The Detroit Bureau of Conventions and Visitors Report “Economic Benefits of the Grand Prix” 2007 Indianapolis Star Report on the Indianapolis (Formula One) Grand Prix 2001

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

23

City Revenue From Parking Fees and Parking Taxes Based on an estimated 20,000 spaces available within the City of Baltimore, the Grand Prix will fill all available spaces for at least three days.

20,000 x 3 days = 60,000 parking spaces 60,000 x $25 = $1,500,000

16% tax = $ 240,000

60,000 x $35 = $2,100,000

16% tax = $ 336,000

60,000 x $50 = $3,000,000

16% tax = $ 480,000

According to the BDC, the City will also gain $200,000 from incremental additional parking fees from city owned parking spaces. The total of $440,000 parking revenue is used in this report.

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 www.BaltimoreRacingDevelopment.com

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The Value of the Media Exposure to the City of Baltimore Produced by the Grand Prix In the report done on the San Jose Grand Prix (The Analysis of the Economic and Fiscal Impact of the Cultural and Sporting Events of San Jose by Sportseconomics, Inc for the City of San Jose, 02/05/2007), the Sports Authority of San Jose gave a value of $4.6 million to all media exposure for the City. The Baltimore Grand Prix will have a larger audience and will spend more on advertising and marketing of the race and it could easily have a media exposure value of $ 5.5 Million based on the expectation that the BGP will be on ABC TV. The Mayor of Long Beach (CA) gave BRD an interview last spring during which he extolled the many benefits that the Long Beach Grand Prix has brought to his city. BRD played the video of this interview at its June 10, 2009 presentation to City, State and business leaders, and it is available on BRD's website. He notes in particular how instrumental the LBGP was in changing the image of Long Beach from an industrial port to a vacation and convention destination. This media exposure and re-branding of Baltimore to the nation and the world is a major benefit of the Grand Prix.

Crowds checking out the Danica Patrick Paddock area at the Infineon Race

Baltimore Racing Development 1200 South Charles Street Baltimore, MD 21230 END OF REPORT

www.BaltimoreRacingDevelopment.com