HomeMy WebLinkAbout2/7/2007 - STAFF REPORTS - 4.A. 'LN.nq,Mii
City of Palm Spril7gs
David H. Ready, City Manager
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TEL: (760)323-3201 • PHX.(760)323-8207 Web-w w.palmspnngs-[a.gov
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February 8, 2007
Mr. Joseph Heitzler
Chairman/Chief Executive Officer
Events Management Group
405 Via Corta
Palos Verdes Estates, California 90274
RE: LETTER OF EXCLUSIVE INTENT TO NEGOTIATE WITH EVENT
MANAGEMENT GROUP FOR STAGING THE PALM SPRINGS GRAN PRIX IN
SEPTEMBER, 2008
Dear Mr. Heitzler:
By action at its February 7, 2007 meeting, the City Council has approved this Exclusive
Letter of Intent for Event Management Group (EMG) for the purpose of negotiating and
exploring the feasibility of staging the Palm Springs Grand Prix with the Indy Racing
League (IRL) in the City of Palm Springs in September, 2008. During the ensuing 145
day negotiation period, EMG and City staff will work to refine the total event costs and
economic benefits, public participation, community support, and feasible courses for the
race itself.
While special events are certainly an important component to the tourism economy of
the City, this letter does not bind nor obligate the City or the City Council to approve an
agreement to host this event. However, after this 145 day period of negotiation and
information gathering, Event Management Group will have an opportunity to present
findings and recommendations to the City Council during a regularly scheduled Meeting
or Study Session. City staff looks forward to discussing the possibility of such an event
for Palm Springs. Thank you for your interest in our City.
Sincerely, APPROVED BY CITY COUNCIL
❑avid H. Ready, Es .D.
City Manager
Posr Office Box 274� 0 Palm Springs, California 92263-2743
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February 7"', 2007
Mr. Joseph Heitzler
Chairman
EMG
405 Via Corta
Palos Verdes Estates
Ca. 90274
Dear Mr. Heitzler
On behalf of the entire VRL organization, we state our full support of the
proposed PSGP event.
It is our commitment to you and the City of Palm Springs that once you
receive the exclusive 145 day letter our racing officials will visit the Mayor
and City Council members personally to extend our support and
enthusiasm for this historic event.
This event will generate substantial interest in the national racing
community, and will certainly bring back lots of fond memories as the
Palm Springs Vintage Races from years ago are still fresh in the minds of
many Vintage Racers.
Warmest personal regards
Stephen
Stephen J. L. Page
Chairman
Vintage Racing League
Vintage Racing League
4144 N. Central Expressway, Suite 1010
Dallas, TX 75204
Phone: 214-676-4333 www.thevrl.com Fax: 214-393-4651
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City Council Staff Report
DATE: JANUARY 17, 2007 P193 BUSINESS
SUBJECT: APPROVAL OF A LETTER OF EXCLUSIVE INTENT TO NEGOTIATE
WITH EVENT MANAGEMENT GROUP (EMG) FOR THE PRODUCTION
AND STAGING OF THE PALM SPRINGS GRAND PRIX IN
SEPTEMBER, 2008, AN INDY RACING LEAGUE (IRL) EVENT
FROM: David H. Ready, City Manager
BY: Community & Economic Development Department
SUMMARY:
The City has received a proposal from Event Management Group (EMG) and Creosote
Partners (collectively, the Organizers) on behalf of the Indy Racing League (owners of
the Indianapolis 500 and the Indy Racing League) to produce an Indy car race in Palm
Springs called the Palm Springs Grand Prix. The Organizers have presented a
package of materials for an event that could be among the most heavily attended and
watched auto racing, street entertainment events in the United States. The Palm
Springs location, with all of the end-of-racing-season events and celebrations, would
create 7-10 days of events and auto racing excitement.
The purpose of presenting the program to Council is to secure the City's economic,
logistical and promotional participation in this regional entertainment event as well as to
provide information to the community in order to begin to develop the necessary support
for an event of this magnitude.
The Organizers have requested a Letter of Exclusive Intent from the City that will allow
them to be the exclusive presenter of this entertainment concept. Since many issues
need to be discussed and resolved to the mutual satisfaction of the parties, staff and the
Organizer recommend that a 145 day period be the time in which to exclusively
negotiate details for an agreement. If the negotiations are successful, an agreement
would be presented for Council's approval.
ITEM NO.
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Palm Springs Grand Prix Letter of Intent
January 17,2007
Page 2
CITY COUNCIL RECOMMENDATION:
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1. Adopt Minute Order No. "APPROVING A LETTER OF EXCLUSIVE
INTENT TO NEGOTIATE WITH EVENT MANAGEMENT GROUP FOR
STAGING THE PALM SPRINGS GRAND PRIX IN SEPTEMBER 2008."
STAFF ANALYSIS:
The City received a proposal from Joseph F. Heitzler, Chairman/CEO of Event
Management Group ("EMG) and Creosote Partners (collectively, the Organizers) on
behalf of the Indy Racing League (owners of the Indianapolis 500) to produce an Indy
race in Palm Springs called the Palm Springs Grand Prix, in September 2008. The
Organizers presented a package of materials for an event that could be the most
heavily attended and watched auto racing street entertainment event in the United
States, with additional significant network television coverage.
EMG has managerial expertise in specialty street entertainment auto racing event
management. EMG management has conducted and produced over 22 street events
over the last 6 years. EMG has partnered with local developers Creosote Partners to
provide the local support and develop links with numerous Palm Springs community
entities, which are critical to any successful street entertainment event promotion.
Indy Racing League ("IRL") is the owner of the Indianapolis Motor Speedway and the
world-renowned Indianapolis 500 race. IRL currently operates and conducts a 16 race
schedule in the U.S., Japan and Canada.
Economic Benefits
Part of the promotional package proposed by the Organizers is that ABC and ESPN will
provide worldwide coverage of the race live from Palm Springs, totaling approximately 6
hours of international TV coverage over three days. In addition, there would be
worldwide media coverage created by the attendance of the international sports media.
The athletes themselves will also promote the race and will help provide international
coverage of this event. These professionals will make significant appearances months
ahead of the actual event and the racing series cross-promotes its events. For
example, IRL and EMG will use the Indy 500 as a special promotional opportunity for
the Palm Springs event. The Palm Springs Grand Prix will also have more past winners
of the Indy 500 in attendance then any other street race event in history.
Another significant factor in IRL racing is the participation of Fortune 500 domestic and
international corporations which sponsor the racing teams. These corporations
schedule numerous corporate meetings and hospitality events prior to and during the
actual racing event.
Palm Springs Grand Prix Letter of Intent
January 17,2007
Page 3
EMG will provide economic benefit surveys and research data from 12 other municipal
entities demonstrating the significant economic spending that will be generated by this
event. Long Beach is entering its 37th year of conducting the Grand Prix. Cleveland,
Montreal, Mexico City, Denver and others have repeatedly experienced significant
positive economic impacts for their respective cities" involvement.
Palm Springs, as an internationally recognized final destination attraction in the large
Southern California market, will enjoy significant attendance for this event and should
rank in the upper 3 IRL cities in attendance in Year One of the event. EMG estimates
that over 135,000 will attend the four days of race events.
A major benefit, like many professional sports, is the charitable work of the Organizers
and participants. In many cities the drivers visit hospital rooms and work on charity fund
raising events, as well as school promotional events and programs. This activity is a
foundation of the success and image of the event in the community.
Event Schedule
The actual Palm Springs Grand Prix will be conducted over a four-day period of time.
However, there are numerous events that will be conducted as officially sanctioned
events of the Grand Prix throughout the year. These events could include a Charity
Ball, a Pro-Am golf tournament, a tennis tournament, a poker contest, several music
concerts, Hispanic entertainment events, an ESPN boxing event, and a beauty contest.
There could also be Casino-oriented entertainment events that would be conducted
year-round in support of the race event.
During the actual race week, in addition to the Indy car race the Palm Springs Grand
Prix will also have a Celebrity Auto Racing event together as well as an International
Vintage Car racing event.
The average stay of those attending races is 5.6 days. The Organizers believe that they
can structure a marketing plan for this event that will create a 7-day package for those
attending. This would be also the last race of the IRL series and the season ending
Annual Champions IRL Ball, seen live on ESPN, will be held on the Monday night after
the Sunday race. This ball is to honor all the participants in the season's racing
schedule. It is attended by all sponsors as well as all the promoters from events in all
the other cities that stage these IRL races.
A major attraction during this entertainment event is the incorporation of the Palm
Springs Convention Center as the location for a major automobile show, which would
feature new cars, vintage cars, race cars, and the major domestic and foreign car
manufacturers.
Palm Springs Grand Prix Letter W Intent
January 17,2007
Page 4
City Participation
The Organizers have requested that the City provide services to the event in the
following areas: streets, sanitation, engineering, police and fire, administrative,
emergency medical and others. At this time those costs are not known but will be
refined during the 145 day due diligence period.
From the community, this event will need several hundred volunteers to provide the
guest relation services.
Track Location. Construction and design
The race is a street race, similar to the Vintage Auto Racing Association races held in
Palm Springs in the 1990's, though longer in distance. The City would work with the
Organizers of this event as it relates to the actual racetrack design and its construction
and maintenance requirements. The design of the racetrack and the associated cost
would be negotiated. The race track itself needs to be approximately 2.1 to 2.4 miles in
distance (the vintage track was about 1.2 miles). It will require a competitive design in
order to challenge the drivers and excite the fans and the media. This will require
creativity as well as economic assistance.
The track itself must meet FIA racing and design configuration criteria. Staff and the
Organizers have reviewed several race sites and believe this goal can be
accomplished. The Organizers and City staff have located three potential race sites
that meet the criteria described below.
Some of the design needs are as follows: The race track should be 50-60 feet wide to
maximize the amount of passing, as passing is what makes the race interesting; the "Pit
Lane" should be two lanes, each 12.5 feet wide; each "Pit Box" should be 45 feet deep
and 18 feet wide per team (24 cars); each 'Team Pit Box" should be 15 feet deep and
15 feet wide per team (24 teams); the "Paddock Area" should be 90 feet deep by 40 feet
wide per team; and, the "Team Hospitality" area should be 55 feet deep by 25 feet wide.
Summary
The Organizers feel that no other city in the U.S. can offer the complete final race
destination attributes that are inherent in Palm Springs: world famous golf resorts;
popular casinos; unequalled weather; celebrity popularity via the Hollywood connection
to Palm Springs; unique shopping opportunities; world-class hotel and resort
accommodations; and, finally, the expertise and creative capabilities of the City.
The Organizers' mission is to create an event entertainment zone/district that can
challenge the drivers' skills, provide the spectacular vistas for international television,
impress the Fortune 500 corporations, open the city to the international media and
I
Palm Springs Grand Prix Letter of Intent
January 17.2007
Page 5
Provide an entertainment value-driven product that the community and all the visitors
would endorse.
EMG has the most experienced management team in open wheel racing; the IRL is the
most important open wheel racing series with the most popular drivers; and, the IRL has
the largest number of Fortune 500 corporations as sponsors. In addition, the
Organizers have brought ABC Sports and LSPN as their TV partners. Palm Springs is
one of the most recognizable destination and entertainment cities in the U.S. This
event could expand the City's national and international exposure and add another
event to its diverse annual events calendar.
FISCAL IMPACT : 0(,
The costs andgbentits of the Ci y participating in the avent are still being d fined.
Joh ymirector of Tom Wilson
Co m 'ity & mic Development Assistant City Manager
David H. Ready,
City Manager
Attachments:
1. Minute Order
2. Letter of Exclusive Intent
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David H. Ready, City Manager
3200 C' F.Tah uric Canyon Way Palm Springs, California 92262"� p 9 Y Y ' Prm K
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February 7, 2007
Mr. Joseph Heitzler
Chairman/Chief Executive Officer
Events Management Group
405 Via Corta
Palos Verdes Estates, California 90274
RE: LETTER OF EXCLUSIVE INTENT TO NEGOTIATE WITH EVENT
MANAGEMENT GROUP FOR STAGING THE PALM SPRINGS GRAND PRIX IN
SEPTEMBER, 2008
Dear Mr. Heitzler:
By action at its February 7, 2007 meeting, the City Council has approved this Exclusive
Letter of Intent for Event Management Group (EMG) for the purpose of negotiating and
exploring the feasibility of staging the Palm Springs Grand Prix with the Indy Racing
League (IRL) in the City of Palm Springs in September, 2008. During the ensuing 145
day negotiation period, EMG and City staff will work to refine the total event costs and
economic benefits, public participation, community support, and feasible courses for the
race itself.
While special events are certainly an important component to the tourism economy of
the City, this letter does not bind nor obligate the City or the City Council to approve an
agreement to host this event. However, after this 145 day period of negotiation and
information gathering, Event Management Group will have an opportunity to present
findings and recommendations to the City Council during a regularly scheduled Meeting
or Study Session. City staff looks forward to discussing the possibility of such an event
for Palm Springs. Thank you for your interest in our City.
Sincerely,
David H. Ready, Esq., Ph.D.
City Manager
Post Office Box 2743 0 Palm Springs, California 92263-2743
EVENT MANAGEMENT GROUP
October 19,2006
Mr. David H. Ready
Chief Executive Officer / City Manager Palm Springs
Palm Springs City Hall
3200 E. Tahquitz Canyon Way
Palm Springs, California
Subject: Palm Springs Gran Prix Entertainment Event
September 2008
Dear Mr. Ready,
Thank you very much for the time and overview you and your
associates have provided to date relative to conducting a Palm
Springs Gran Prix Entertainment event for September of 2008 -
September 2017.
On behalf of the management entities that will produce and
operate this entertainment event, EMG and the Indy Racing
League and the Vintage Racing League. I would like to provide a
general summary of this proposed event together with the goals
and objectives of this letter of communication.
Our mission is to secure the cities economic and logistical and
promotional participation in this entertainment event as well as to
provide information to the community that will allow those
constituents to support the initiatives as necessary for an event
of this magnitude.
405 Via Corta, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzier@mac.com
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EVENT MANAGEMENT GROUP
The most important requirement that we as an organizing entity
will need after your review of this presentation is a letter of
intent from the city that will allow our organization to be the
exclusive presenter of this entertainment concept. Realizing that
we will have many issues to be discussed and resolved to the
mutual satisfaction of all participating entities we would
recommend and require that we identify a specific period of time
in which to finalize all the details and to sign a binding letter of
agreement. During that period of time we would exclusively
negotiate with only these stated entities.
We look forward to securing your letter of intent and will work
extremely hard to resolve all the details and complete a binding
letter of agreement within 145 days of receipt of a letter of
exclusive intent.
I hope that the following overview properly conveys our
excitement that this event would be the most heavily attended
and watched auto racing street entertainment event in the USA.
Palm Springs would create an excitement unmatched in USA auto
racing.
Strate is Information/ Palm Springs Gran Prix Event
A.) Event Management Group - has managerial expertise in
specialty street entertainment auto racing event
management. EMG management has conducted and
produced over 22 street events over the last 6 years. Its
405 Via Corta, Palos Verdes Estates, CA 90274
310-165-1978 310-465-1968
iheitzler@mac.com
EVENT MANAGEMENT GROUP
most recent events were in Mexico and one race had in
excess of 430,000 in attendance.
B.) Creosote Partners - EMC approached Creosote Partners
to provide the important initiatives from the numerous
Palm Springs community entities, which are critical to any
successful street entertainment event promotion.
C.) IRL. Indy Racing League - The owners of the Indianapolis
Motor Speedway and the Indianapolis 500 race which is
world-renowned. Presently operates and conducts a 16
race schedule in the USA and Japan and Canada.
D.) ABC/ESPN will provide worldwide coverage of this race
live from Palm Springs. A total of approximately 6 hours
of international TV coverage.
E.) Worldwide media coverage will be created by the
attendance of the international sports media.
F.) World wide recognized professional athletes will promote
the race and will provide international coverage of this
event. These professionals will have significant in market
appearances months ahead of the actual event.
6.) Fortune 500 Domestic / International Corporations who
sponsor the racing teams will schedule numerous
corporate meetings and hospitality events prior to and
during this event.
H.) Palm Springs Community leaders as well as promotion
winners will attend the INDY 500 as special VIP's and
members of the official IRL racing promoter family.
Additionally we will use the INDY 500 as a special
promotional opportunity for the Palm Springs
entertainment event.
405 Via Corta, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzler@mac.com
EVENT MANAGEMENT GROUP
I.) EMG can provide economic benefit surveys and research
data from 12 other municipal entities demonstrating the
significant economic spending that will be generated by
this event. Long Beach is entering its 37th year of
conducting the Gran Prix. Cleveland, Montreal, Mexico
City, Denver and several others have repeatedly provided
excellent economic development trends that more than
justify the respective cities involvement.
J.) Palm Springs as an internationally recognized final
destination attraction will enjoy a significant attendance
record by virtue of conducting this event. It will rank in
the upper 3 IRL cities in attendance in year one of the
event. We estimate that over 135,000 will attend the
race events
K.) The Palm Springs Gran Prix will be conducted over a four-
day period of time. However we will have numerous events
that will be conducted as officially sanctioned events of
the Gran Prix through the entire year.
L.) The following are a few of these events: Charity Fund
Ball, Pro Am golf tournament, tennis tournament, poker
contest, several music concerts, Hispanic entertainment
events, ESPN boxing event, beauty contest. Also Casino
oriented entertainment events will be conducted year
round in support of the race event.
M.) Palm Springs Grin Prix will also have a celebrity auto-
racing event together with an international Vintage car-
racing event.
N.) This event will need volunteers to provide the guest
relation services and numerous other critical community
oriented details.
405 Via Corte, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzler@mac.com
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EVENT MANAGEMENT GROUP
O.) The average stay of those attending races is 5.6 days.
We believe that we can structure a marketing plan for
this event that will create a 7-day package for those
attending. This would be the last race of the series and
the season ending Annual Champions IRL Ball, seen live on
ESPN; will be held on the Monday night after the Sunday
race. This ball is to honor all the participants in the
seasons racing schedule. It is attended by all sponsors as
well as all the promoters from events in all the other
cities that stage these IRL races.
P.) The entire success of this event is centered on the
ability of the organizing entities to convey the emotional
ownership of the event to the entire Palm Springs
community. The drivers attending hospital rooms as well
as our charity fund raising capabilities together with
school promotional events and programs is essential.
Q.) A major attraction during this entertainment event is the
incorporation of the Palm Springs Convention Center as
the location for a major automobile show. New cars,
Vintage cars, race cars as well as the major domestic and
international car manufacturers.
R.) The city will have to provide services in the following
areas; sanitation, engineering, police and fire,
administrative, emergency medical and others.
S.) The city will need to work with the promoters of this
event as it relates to the actual racetrack design and its
construction and maintenance requirements. The design
of the racetrack and the associated cost will have to be
negotiated. The race track itself needs to be
approximately 1,7 to 2.4 miles in distance. It will require
405 Via Corta, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzler@mac,com
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EVENT MANAGEMENT GROUP
a competitive design in order to excite the drivers as well
as the fans and the media. This may require creatitivity
as well as economic assistance.
T.) The track itself has to meet FIA racing and design
configuration criteria. We have reviewed several race
sites and believe we can accomplish this goal.
U.) Some of the design needs are as follows: Race track
should be 50-60 foot wide to allow for excessive passing;
Pit Lane should be two lane each 12.5 foot wide; Pit Box
should be 45 foot deep and 18 foot wide per team (24
cars); Team Pit Box should be 15 foot deep and 15 foot
wide per team (24 teams); Paddock Area should be 90
foot deep by 40 foot wide per team, Team Hospitality
should be 55 foot deep by 25 foot wide.
V.) EMG together with Creosote Partners and several city
departments have located three race sites that meet the
above criteria. Please see attached aerials of those sites.
W.) EMG would like to suggest that the city entertain
discussions relative to a special event tax that can
provide significant revenues for the cost of this event.
EMG recently participated in preparation of a tax
initiative for the state of Texas which provides a racing
tax provision to support the infrastructure of auto racing
throughout the state.
I trust that you can now see why we believe that the City of
Palm Springs will enjoy significant benefits from participation
in this International event. No other city in the U5A can offer
the complete final destination attributes that are inherent in
Palm Springs. World popular golf resorts, world popular
405 Via Corta, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzler@mac.com
EVENT MANAGEMENT GROUP
casinos, weather unequalled anywhere, celebrity popularity via
Hollywood's love of Palm Springs, unique world class shopping
opportunities, world-class hotel and resort accommodations
and finally the expertise and creative capabilities of the city
and its city management and city leaders.
Our mission as a team is to create a event entertainment
zone/district that can challenge the drivers skills, provide the
spectacular vistas for International Television, impress the
Fortune 500 corporations, open the city to the international
media and provide an entertainment value driven product that
the community and all the visitors would adopt as there
creation.
We would like to meet with the honorable Mayor Ron Oden as
well as those city council members that you feel would be
interested in going to the next step in the process of securing
approval for conducting this event for at least the next nine
years.
We have the most experienced management team. We have the
most popular open wheel racing series in the IRL. We have the
most popular drivers. The IRL has the most number of Fortune
500 corporations as sponsors in open wheel racing in the USA.
We have ABS Sport and FSPN as our TV partners. We have
one of the most recognizable cities in the USA as the site for
this event. We have a city that is creative and innovative in its
thinking and has the expertise to assist in the production of
this event. We have a community that supports its events as
405 Via Corta, Palos Verdes Estates, CA 90274
310.465-1978 310-465-1968
jheitzler@mac.com
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EVENT MANAGEMENT GROUP
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well as contributes their time to worthy causes. We have a
' respected community citizen, Creosote Partners, as our
partners. We want this to be a significant charity oriented
event. I believe we have the critical ingredients to make this
event as successful as our collective energies will allow. We will
have more past winners of the INDY 500 in attendance then
any other street race event in history. We have it all. We need
to do this event together as a team. We need to move to the
next step and we hope that you will provide the direction and
guidance to accomplish the remaining tasks at hand.
Thank you for this opportunity and T will await your response
to this communication.
Sincerely,
Joseph F. Heitz r
Chairman / Chief Executive Officer EMG
Cc: Mr.Tony George, Chairman Indianapolis Motor Speedway
Mr. Stephen Page, Chairman Vintage Racing League
Mr. John Raymond, Director Economic Development
City of Palm Springs
Mr. Thomas Wilson, Assistant City Manager Development
Services, City of Palm Springs
405 Via Corta, Palos Verdes Estates, CA 90274
310-465-1978 310-465-1968
jheitzler@mac.com