With the Newcastle 500 postponed because of COVID-related concerns, the newly elected council has an opportunity to negotiate a better deal with Supercars for city residents and businesses.
Last year, the council voted unanimously to "require any changes to the current agreement with Supercars in relation to the timing, staging, access or other aspects of the 2022 Newcastle 500 event be reviewed and approved by the elected council prior to approval".
The first matter that needs re-negotiating is the hitherto secret services deed; a document that sets out the council's on-going legal obligations to provide expensive in-kind services, including extensive road resurfacing and Foreshore Park modifications as required by Supercars.
Last July, a variation to this agreement was signed to shift the event date to March 2022 but the council's obligations to provide services for Supercars were not eased. They were made more onerous.
Apart from a minor reduction in bump-in time, a freedom of information request reveals that the variation resulted in an additional costly item: "Removing, storing, and replacing traffic management devices (roundabouts, speed bumps, pedestrian thresholds)". Why did the council agree to this extra cost?
How will pedestrian safety be assured in the interim when the 11 raised pedestrian crossings around the circuit, put in place to ensure safety and help prevent hooning, have already been removed? For how long will pedestrian safety be jeopardised?
Councillors would be justified in requiring clear and transparent costing of the generous services the council provides for Supercars, so ratepayers know their on-going commitment.
The list should include all services provided for each event, including the extensive roadworks and the significant intrusions to park infrastructure, maintenance, and rehabilitation. These costs have largely been hidden, appearing in the budget under the general classifications of road and park maintenance.
Councillors should also require clarity on the supposed benefits of the Supercars event to ratepayers.
Supercars' CEO Shane Howard recently said on their website that "as a street circuit built in the heart of the CBD, the event provides enormous economic benefits to the region" - a claim that has never been verified. Neither Supercars nor City of Newcastle has ever held a survey of CBD and adjacent area businesses to ascertain whether the event is indeed a cost benefit to them.
Business owner Neil Slater said of Supercars in November: "They're like a vacuum cleaner. They hoover up every dollar available". His comments are consistent with the results of a survey carried out on behalf of Newcastle East Residents Group immediately after the first event of 243 businesses within and immediately adjacent to the race precinct.
Notably, the majority in both groups reported a significant economic downturn over all stages of the event, including bump-in and bump-out. While there was an increase in trading for some hotels and accommodation businesses, cafes, restaurants, and kiosks adjacent to the circuit during the three days of the event, those away from the circuit suffered persistent economic downturn throughout.
Supercars bring in their own food and merchandise vendors, as well as numerous liquor outlets. Spectators mostly spend their money within the compound and Supercars takes a percentage.
Council contracted the Hunter Research Foundation Centre (HRFC) to provide an economic impact assessment rather than require the full cost /benefit analysis favoured by the Auditor-General and Treasury. There was no survey of businesses conducted nor any costing. Yet it turns out that the data provided to the HRFC proves beyond doubt that Supercars ticketing information is unreliable.
The HRFC used data supplied by Telstra to estimate that 192,400 people were in Cooks Hill and Newcastle during the three-day event.
However, this was not the event attendance number, since the estimated number of people who were in the same area during a "normal" weekend had to be subtracted - giving a visitor uplift of 77,800 persons. This is the figure likely to be close to the real number of people attending the event, though even this figure is inflated because the council and Telstra chose a cold snap weekend in May as the comparable weekend that was 70 per cent below an average weekend.
Yet Supercars claims the almost identical number 192,242 as their official attendance figure, a huge discrepancy noted in the Herald (NH 16/11/20.)
Despite being aware of this mismatch, the council's latest commissioned assessment of benefits by EY uses Supercars' grossly inflated attendance figures to calculate the event's benefits.
Clear answers to these questions will help the new councillors separate the facts from the hyperbole, self-interest and voodoo economics that cloud the enduring question ratepayers deserve to have answered.
Who really does benefit from this event?
