I had already read Tuesday’s Jon Fleischman Commentary by the time the FlashReport publisher called me later in the day to ask if the San Bernardino County Board of Supervisors had, as he had urged, rejected a proposal to "subsidize" to the tune of $700,000 the for-profit California Speedway.  The proposal he spoke of was in the form of an agreement for title sponsorship of a new raceway venue and some upcoming NASCAR races.

I told Jon the Board had not rejected the proposal, and in fact approved it.  Now I’ll start off by saying Jon is right to point out that San Bernardino County is a red county, and that its Board is dominated by a Republican super-majority.  In fact, I believe the Board’s decision on the sponsorship package was justified based on some very sound and not un-conservative reasoning.  There may be times when conservative pro-business principles seem to run counter to conservative anti-tax, limited government principles.  But I don’t think this is necessarily one of those cases.  After taking some ribbing from Jon I told him I would post some thoughts in response to his column, and he welcomed it in the spirit of good debate.

First, I want to say that the sponsorship is not really a "subsidy" of the speedway.  The California Speedway doesn’t need the County’s $700,000 nearly as much as the county needs the national and international exposure the sponsorship provides.  Second, I need to provide clarification relating to one aspect of Jon’s criticism that was based on the way the issue was covered by the San Bernardino County Sun (and its sister paper the Daily Bulletin).  Jon had admittedly relied on the Sun’s coverage of the issue when he penned his piece Tuesday morning.  I need to clarify that the newspaper coverage implying that the county’s new sponsorship agreement and its receipt of 1,000 NASCAR tickets are related items was not an accurate representation.  In reality, those tickets are part of the county’s already existing contract between the speedway and the County’s Redevelopment Agency (California Speedway is part of a massive County Redevelopment project).  The purpose of the county’s allocation of tickets is mainly to support efforts to bring potential new employers to the area, providing them with an entertaining introduction to the region and the benefits of locating here.  Further, extrapolating the value of those tickets from $700,000 (the cost of the three-year sponsorship) and the number of tickets, in this case 1,000, is not a mathematical process of long division.  I guess Jon did this math with tongue firmly planted in cheek, but I still will need to get on the record that those tickets absolutely don’t cost $700 each, and the sponsorship agreement approved by the Board of Supervisors is not related to those tickets.

Third, it’s understandable that there may be a perception that the county’s sponsorship is intended to provide not much more than, as Jon called it, "’PR value’ for … county government".  If that were the case I would agree that it wouldn’t be an appropriate use of taxpayer dollars.  But in this case, I have to argue that it’s not PR value for County Government — it’s PR value for San Bernardino County as a region, and the California Speedway is too big an asset for San Bernardino County not to take full advantage of in this regard.  Fourth, that speedway is part of a county Redevelopment project.  The success of the track results in more tax dollars in the Redevelopment agency, which can be used to help build infrastructure and attract new employers and industries to the area. 

Races, especially NASCAR races, are very good for the county’s economy.  Two years ago an economic study estimated the Speedway’s total positive economic impact to the Inland Empire to be $220 million.  This figure was derived from related economic activity and household earnings, including increased business for hotels, restaurants and gas stations.  This kind of economic activity results in more tax dollars for government as well as profit and jobs in the private sector. 

In addition to buying into the economic benefit the speedway provides the region, the county’s new sponsorship agreement is part of an overall effort to step-up the county’s marketing promotion plan.  That plan is consistent with a strategy authored by the area’s most respected economist.  Upcoming events at the speedway will serve as the public launch of the County’s new economic development program.  Developers, institutional investors and CEOs will be invited to the events to learn about the myriad opportunities in the County. 

There are two major objectives of the County’s economic development program.  One of them is to provide economic development leadership to all 24 cities in the County.  The County is providing leadership, training and cooperative marketing opportunities supporting our cities in an environment that has recently become increasingly characterized by a faltering regional economic development effort.  The second major objective of the program is to very quickly put the County of San Bernardino on the consideration lists of site selectors, tenant representatives, consultants and VPs of real estate.  Increasing marketing promotions, particularly using county-related facilities and themes, is intended to let corporate America as well as entrepreneurs and potential residents know that San Bernardino County is a place they should consider living and working.  Our County, unlike many others, is directly in the path of growth and development.  The County can either sit back and be controlled by events or it can take an active role in shaping its future. 

San Bernardino County’s newly reorganized and revitalized Economic Development Agency, formed under the leadership of Board Chairman Bill Postmus (my boss), has made job creation its focus to ensure that our county isn’t just a bedroom community with housing and service industry jobs, but rather that the region also includes higher-paying industrial and professional jobs that help further grow the wealth of the region, also resulting in increased tax base.  This development of wealth and tax base is what will ensure that infrastructure, law enforcement and other public necessities will be adequately funded to improve the quality of life in the area into the future.

Another reason the Speedway sponsorship makes sense is that our region has had to struggle to overcome image problems.  Part of that image problem is associated with our blue-collar and housing-boom past, the decline of which culminated catastrophically with the closure of three Air Force bases in the 1990s, killing thousands of jobs and depressing real estate values for over a decade.  And while we’ve recovered significantly, we continue to live in the shadow of Los Angeles and Orange Counties economically and when it comes to our relative image as a county.  For example, a year or two ago a NASCAR race at California Speedway (near Fontana) was advertised nationally on television to the theme music of Randy Newman’s "I Love L.A." and was billed as "NASCAR Coming to L.A."  This basically told the country that any other region near L.A. doesn’t matter ("L.A./Anaheim Angels" Fans, take note).  San Bernardino County can help dispel the mistaken notion that San Bernardino County (with 2 million residents and an exploding economy) is just the backyard of L.A. by having our identify differentiated in a very visible way through title sponsorships at the Speedway.

The California Speedway is the Inland Empire’s premiere sporting facility, and its new FanZone midway venue is extremely unique.  It’s a large outdoor family entertainment area anchored by a Wolfgang Puck restaurant called APEX.  It includes stages, water features, grass areas and retail, and it will attract thousands of additional visitors.  Being a Title Sponsor will guarantee significant live television exposure on the day of the NASCAR Sony HD 500 race on Labor Day, as well as related radio, magazine, and newspaper advertisements.  This, along with the NASCAR Craftsman Truck Series sponsorship in February 2007, will give the County national exposure in both electronic and print media during prime-time national telecasts.  The county’s sponsorship includes naming rights for the FanZone, and major signage, including permanent signs, television and the JumboTron.  Also included is exhibition space where county representatives will provide information about county services and 15 computer kiosks where fans can get information about the county or even look for a job or find out how to get information about how to move a business here.  The sponsorship also gives the county rights to hold events there promoting the County for site locators and corporate executives looking to relocate their businesses.

Finally, to help ensure the taxpayers’ investment in the sponsorship is sound, up to 70 percent of the cost of the sponsorship will be reimbursed to the County by the Redevelopment Agency, and the county reserves the right to scale back some of its participation early if it deems the taxpayers aren’t getting their money’s worth.

This entry was posted on Tuesday, August 8th, 2006 at 12:00 am and is filed under Blog Posts.