City and state officials are igniting a souped-up effort to draw motorsports-related companies here, and they're enlisting
Hoosier-born NASCAR champ Tony Stewart to help drive their message home.
Stewart is joining what many think will be a winning team in the race to lure motorsports investment here. Gov. Mitch Daniels and Mayor Bart Peterson are on board. So are the Indiana Economic Development Corp., the Indy Partnership, the Indianapolis Convention and Visitors Association and the new Indiana Motorsports Association, formed in 2005.
Observers say it's the first time such a broad collaboration has been orchestrated to try to draw motorsports business to Indiana.
The initiative isn't coming a moment too soon, according to motorsports business experts.
"There's a big battle right now between North Carolina and Indiana to be the motorsports capital of the U.S.," said Dennis Sherman, vice president of marketing for Hoosier Racing Tire, which is in Lakeville, just south of South Bend. "Racing is becoming a more mainstream business, and people are starting to realize the benefits of attracting these types of jobs.
"North Carolina, of course, is huge with NASCAR, and they're offering a lot of benefits to companies willing to locate there."
But Indiana officials think they can emerge victorious using a grab bag of incentives, the state's central location, and its long history in motorsports.
Assault on Orlando
Having a celebrity driver on Indiana's side won't hurt, either.
Stewart, who won the NASCAR title in 2002 and 2005, will assist a 13-person Hoosier delegation that's been assembled to promote the region at the upcoming Performance Racing Industry trade show in Orlando, Fla.
The PRI show, to be held Dec. 14-16, is the nation's largest racing industry trade show, attracting 42,000 attendees from 40 countries. It was held here from 1998 to 2004, but it moved to Orlando last year after running out of space at the Indiana Convention Center.
Local officials hope to lure the show back after the convention center expansion is complete in 2010, but for now they're faced with telling the state's story on someone else's turf.
"We're having to take our show and tell it on the road," said Matt Steward, IEDC director of motorsports development. "Clearly, we're losing out on just being able to tell people to look around. We're not going to have signage in the Orlando airport or restaurants promoting Indiana."
To help compensate, the local contingent will have a booth and host a special reception Dec. 14 for 125 hand-picked representatives of businesses worldwide deemed likely to consider the state for their operations.
And they'll have in their corner race champ Stewart, who happens to be the keynote speaker at this year's PRI gathering.
Stewart will make an appearance at the local delegation's booth and will likely include remarks about the virtues of doing business in Indiana in his keynote address.
"Tony Stewart has a lot of fans, and when people hear someone like that endorse what we're trying to sell, it will encourage people to stop by our booth and learn more," said Gordon Hendry, Indy Partnership's interim CEO.
All of Stewart's 12 racing-related companies are headquartered in central Indiana, and the Columbus resident is building a new facility in Brownsburg to house several of his teams.
Stewart is endorsing Indiana simply as a matter of Hoosier pride, with no compensation expected.
"Being a native Hoosier, I have always been enamored with the history of motorsports in the state and recognized the importance it has had on the culture and local economy," Stewart said.
Rolling out incentives
It's unclear whether Stewart's involvement will extend beyond the trade show appearances, but the state's effort is deeper than relying on a temporary pitchman.
Daniels, the first governor to make growing the motorsports sector part of his primary platform, created a director of motorsports within the IEDC shortly after taking office last year.
While North Carolina has used tax incentives mainly to try to encourage large race teams to expand in and around Charlotte, Indiana officials are extending an olive branch not only to teams and other large operators, but also to midsize and small companies such as fabricators and parts makers.
In addition to tapping the usual cadre of tax abatements and tax increment financing, Indiana officials are promoting several special incentives just for motorsports operations, including no sales tax on race cars or any parts used to make them, except tires.
Daniels has also agreed to extend a tax credit designed for investors in tech companies to motorsports operations.
"These are sales tools we have that no one else is offering," Steward said.
The state's ramped-up effort says something about what's at stake.
A recent study commissioned by local officials showed there are more than 400 motorsports-related companies with a total of 9,000 employees in central Indiana alone. Those employees are bringing in more than $425 million in annual wages, with average earnings 35 percent higher than the region's average. A preliminary study this year by the IEDC showed more than 1,400 motorsports businesses statewide.
"We think right now, that's a conservative number," Steward said.
Steward added that many of the positions are technical, high-paying jobs. "These are the kind of jobs and businesses the state wants," he said.
Indiana has to be serious about offering tax incentives and other enticements if it's going to grow its motorsports business base, said Mel Poole, president of Sponsorlogic, a Charlotte-based motorsports marketing firm.
"North Carolina has a historical base in NASCAR, and local officials are becoming very aggressive in not only retaining and growing what they have, but drawing in related business," Poole said. "Suddenly, this has proven to be a very high-stakes, competitive venture."
But Hendry thinks central Indiana has some strengths that are difficult to replicate. He said the region's central location, low-cost environment, proximity to several colleges with motorsports-related curricula, and access to strong infrastructure, including a crossroads highway system and Fed Express' second-largest hub, are just some of the area's strengths.
"One thing we have that few others can boast is a real diversity of motorsports businesses," Hendry said. "We have businesses related to the Indy Racing League, Champ Car, [National Hot Rod Association] and [United States Auto Club], just to name a few," Hendry said. "That diversification is very important for parts makers and service providers in the racing sector."
Hendry made no secret about local officials' intentions to pursue motorsports companies "on both coasts." There are a large number of drag-racing teams and related companies on the West Coast, and numerous stock-car-related operations on the East Coast.
Tom Weisenbach, who this spring was named the first director of the Indiana Motorsports Association, said his organization is "connecting the dots" between area motorsports companies to create a strong network that fosters financial growth in the industry. He said the IMA is another example of what makes Indiana a strong location for racing companies.
"I'm going to be walking the floor 12 hours a day at the PRI show, making sure people know what this state has to offer," Weisenbach said. "Sometimes, I think we forget how unique this region is, and it's important to keep getting that word out."
Though various cities and states--including Las Vegas and parts of Virginia--are launching efforts to lure motorsports business, the collaboration among Indiana entities could put the region in the pole position.
"This is the biggest collaborative effort on this front we've ever rolled out," Steward said, adding that there's never been this detailed a road map for the initiative.
But Hendry said this effort needs to be just the beginning.
"This is the most aggressive we've ever been," Hendry said. "We think we're really going to create a buzz about the region starting at the PRI show. But that's just the jumping-off point. After the trade show, we know it's time to shift into an even higher gear."