Markham’s council has greenlit a long-term funding partnership with Destination Markham Corporation (DMC) to support the financing of the Ontario Honda Dealers Indy at Markham. This plan includes $3.4 million from DMC reserves along with money from a higher hotel tax.
The decision made on Jan. 27 backs a motion earlier approved by the DMC board to use $3.4 million from its surplus, plus extra revenue coming from an increase in the city’s Municipal Accommodation Tax (MAT) from four to six percent starting April 1.
“This legislation was passed by the province to allow municipalities to introduce essentially a hotel tax to promote their city,” Mayor Frank Scarpitti stated. “We kept dollars in reserve, knowing that we would probably have to reinvest in infrastructure or invest in new infrastructure to attract tourism.”
He pointed out that no property tax funds are being used for building the temporary street circuit.
The capital expenditures, mainly aimed at one-time upgrades, have gone beyond $12 million, according to the mayor. A lot of that amount has already been spent, with more resurfacing currently taking place.
Since Indy Cars need better pavement standards than regular roads, parts of the road are being milled and repaved. Other improvements include widening a road behind the YMCA, moving light poles, changing curbs and medians, and building a double pit lane – which allows fans in the main grandstand to see all the action directly.
“Normally people have a long pit lane and you can’t really see when a car comes in what’s happening,” said the mayor. “Because of the double pit lane, all of that action will be happening right in front of the stand. That’s a real draw.”
The three-day race is set for Aug. 14-16 and is expected by the city to bring around 140,000 to 150,000 visitors and generate about $50 million in economic activity for the region, including an estimated 19,000 hotel room nights.
The mayor believes that holding it in Markham offers better access compared to where it used to be held in Toronto.
“Seventy-one percent of attendees that go to Indy will actually have an easier commute coming to the City of Markham,” he noted.
This year marks a shift for the event as it moves from its usual July slot into August, closer toward the end of the Indy Car season.
“You’re kind of getting into the championship round,” Scarpitti added. “Drivers will be jockeying for positioning. It’s going to be more exciting.”
If attendance doesn’t meet expectations financially, when asked about risk management regarding this situation, he explained that MAT structure allows recovery over time.
“If it’s a little lower than expected, it just means you take a little longer to put your money back,” he clarified.
The Markham event falls under a five-year agreement between Green Savoree Toronto ULC and Indy Car alongside City Hall with options for renewal down the line.
Scarpitti mentioned that this partnership might continue past its initial term based on comments from officials at Penske Entertainment.
“Your agreement is for five years, but we’re coming up here for decades,” he recalled hearing them say. “That tells me they’re pretty excited.”
Beyond just immediate financial forecasts though; Mayor framed Indy as something that could open doors for future events too.
“You get one huge sporting event like this; you’re probably going to get another one!” he exclaimed!
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