Is Peak race over the hill?/ With finances shaky, organizers face

The old helmets, trophies and photos are in boxes. The antique race cars are being readied for one last drive to new homes. The gutted race car on the top of the roof has been removed from its lofty perch.

The Pikes Peak Hill Climb Museum has flatlined.

The closure of the fixture on Manitou Avenue and a recent decision by the city to withdraw an annual subsidy has raised the question: Is the race itself, begun by Broadmoor founder Spencer Penrose in 1916, also faltering?

It depends upon whom you ask.

Ted Foltz, a member of the Over the Hill Gang of racers who established the museum in 1989, thinks it's only a matter of time before the Pikes Peak International Hill Climb runs its last.

Springs City Councilman Lionel Rivera, who opposed giving the race its annual $30,000 tax subsidy, said he doesn't want to see the race black-flagged. But he said it's time the event lives or dies on its own.

Two new officials brought on board 18 months ago to revive the race say the museum's closure is not a sign of impending doom for America's second-oldest auto competition.

Shedding the money-losing museum and an associated putt-putt course, they say, has actually put the race on solid financial ground for the first time in years.

They aren't willing to predict it will survive another 78 years - but they say the high, wild sound of 600-horsepower engines will be heard up and down the 14,110-foot mountain well into the 21st century.

How could a race known to motorheads worldwide find itself sputtering like a 1973 Ford Maverick? How could a race that last year attracted 200 drivers from as far away as Japan, New Zealand and Monaco be deep in red ink?

In some ways, say organizers, the very nature of the race has caused problems.

It's run only once a year - but sponsors want to see their logos splashed across TV screens dozens of times a season.

The logistics are daunting - 12.42 miles and more than 150 turns, with course and safety officials needed every couple hundred feet.

It has traditionally been run on July Fourth weekend, when Colorado Springs residents head to the mountains and other events compete for tourists' interest.

Forest Service regulations limit the number of people on the mountain to 10,000, including spectators, race officials, racers and their families, thus limiting ticket sales. In recent years, though, that hasn't been a problem, as attendance has faltered.

Finally - and insiders will say this only obliquely - past managers of the race have typically been racers, not businessmen, and the event has tended to be run like a private club.

Then there was the Hill Climb Museum, created as an educational institution to garner a nonprofit, tax-exempt status. But instead of being a tax shelter, it soaked up cash.

With just two summer months to make money, the museum rarely attracted much more than 10,000 people. And that wasn't enough to cover the $5,000 monthly expense of owning and operating the facility.

All of which led to some shaky finances, said new chief executive Mike Clark.

"Since 1994 - as far back as I could go where the numbers make good sense - we have had only one year, 1997, where we didn't have a deficit at the end of the year," Clark said. "We covered that deficit each year by going to the bank and paying it off with next year's revenue. Imagine conducting your household expenses like that. It caught up to us big time in 1999. We were paying monthly expenses with a credit card."

New chief steward Bill Walters, who runs the show on the mountain, said the new team brought in to rescue the event found it lacking goodwill among the area's power brokers.

"We inherited a program that was 78 years old that was certainly not riding the crest that motor sports in general are riding right now," he said. "Our predecessors left us with a lot of people in the community who weren't really pleased with the race."

Among those were City Council members. In the past, the city allowed the race to use $30,000 in tourism tax to pay for using the city-run highway. And the city absorbed the loss of revenue - estimated to be at least $17,000 - when the highway was shut down on July Fourth, perhaps the biggest tourism weekend of the year.

No more. Councilman Rivera said he and his colleagues look at the financial success of such racing series as NASCAR and wonder why the Pikes Peak Hill Climb has trouble finding sponsors.

"It's a viable industry in the South," Rivera said. "I wonder why it isn't here. Are there other ways to put the race on?"

Then there's the environmental issue posed by the race. The city has agreed, as a result of a lawsuit, to spend $10 million in the next decade to correct environmental problems on Pikes Peak, including severe erosion along the gravel portion of the road.

Race officials have fought paving the road, saying it would ruin the race. But the new management team has decided it's a battle they can't win and say the racers will adapt to whatever road surface snakes up the mountain.

Still, with the expense of paving looming - and other cultural and sports groups in the city clamoring for money - the council decided to switch off the key to future subsidies.

That doesn't sit too well with the new organizers of the race.

Clark said a financial analysis shows the event generates $6.2 million in revenue for city hotels and restaurants. He believes that contribution to the city economy means the race should get back at least $30,000 in tourism tax revenue.

He said the future of the race didn't hinge on the money, but the symbolism of the council action has caused just one more problem.

"I have some explaining to do with current and potential sponsors," he said. "If the city doesn't care a whole lot, why should they?"

Still, said Clark and Walters, they're going continue to make the "tough decisions" they've been making to get the race on solid footing.

Besides closing the money-losing museum, race officials will:

Use the artifacts and cars as traveling exhibits at such events as Springspree, in the hope of enticing young people to become fans.

Aggressively pursue more lucrative sponsors. Race organizers are negotiating with the Adelphia cable company to continue the sponsorship it offered last year. Race organizers also want to expand the number of high-profile sponsorships such as that offered by General Motors.

Capitalize on a contract it recently signed with ESPN to broadcast the race through 2004. The sports cable network aired Hill Climb coverage this year in half-hour and hour programming on a delayed basis at least nine times. The cable giant goes to 56 countries besides the United States.

Move the race to June 30 to free the highway for Fourth of July tourist travelers and a windfall for the city.

Forge alliances with other race series, perhaps featuring off- road trucks and the hugely popular European rally cars.

Keep a tight, businesslike check on revenue and expenses.

Consolidate the myriad divisions of race vehicles to create a more competitive, tightly run race. On Friday, race organizers said they will consolidate the sprint and open-wheel divisions and the super stock truck and high-tech truck divisions.

Clark said he and other organizers really can't look too far forward. They're going to throw maximum effort into making each and every year of the race count. He thinks it's a checkered flag strategy:

"We are ending 2000 technically debt-free," Clark said. "We can go forward without owing anyone a dime - and I think that's a major accomplishment."

Shedding the museum was a wise financial move, said Foltz of the Over the Hill Gang, but it may not be enough.

"They might make it for a couple more years. But I don't see it making it any further than that if they don't get the support of the city."

Chief steward Walters is more optimistic: "Away from Colorado Springs, this is a big event. In Australia, New Zealand, Japan, we have a tremendous interest in this race.

"There is a clear future for the race. The question we wrestle with seriously is: Can we afford to do it?"

- Bill McKeown covers general assignments and may be reached at 636-0197 or mckeown@gazette.com Edited by Bill Vogrin; Headline by Jeanne Davant

Dollars

Hill Climb Chief Steward Bill Walters says the race contributes $6.2 million to the local economy. The city has withdrawn its $30,000 subsidy of the event.

The numbers

Preliminary figures show the 78th running of the Pikes Peak International Hill Climb in July 2000 generated income of $795,000 and expenses of $652,000.

The total income generated by the race and the museum was $981,000, with total expenses of $1,022,000.

Race officials believe the closure of the museum, increased professionalism by race organizers and more sponsorship will put the race on solid ground in the coming years.

Copyright 2000
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