Leo Hindery Jr. heads the Port Imperial Racing Associates (PIRA) group that Formula One boss Bernie Ecclestone says is in breach of contract.
Formula One boss Bernie Ecclestone has revealed that the organizers of the proposed Grand Prix in New Jersey are in breach of their race contract and have not paid him since signing the agreement in 2011.
Speaking to Autoweek over lunch in London, Ecclestone also said that several groups are considering whether to take over the race from the current management to ensure that it goes ahead.
The race, known as the Grand Prix of America, is planned to run on 3.2-miles of public roads in Port Imperial, a district in the New Jersey towns of West New York and Weehawken. It snakes alongside the Hudson river and would give the Grand Prix a spectacular backdrop of Manhattan's historic skyline.
It was due to debut this year but was cancelled due to a lack of funding. The same roadblock led to it recently being dropped from the provisional 2014 calendar with a slot tentatively scheduled for 2015. “What is amazing with New Jersey is that the people signed a contract,” says Ecclestone. “You have got to assume they knew what they had signed. They should have never made the commitment. We could sue them. They are in breach.”
The organizers, Port Imperial Racing Associates (PIRA), are led by Leo Hindery Jr., a sometime racer and managing partner of private equity fund InterMedia Partners. Hindery is understood to have put more than $10 million of his own money into the New Jersey race project. However, another $100 million is needed to complete work on the track and get the green light. Hindery has appointed investment bank UBS to try to raise the money and PIRA has also borrowed $10 million from the Formula One Group, which runs the race series.
“We gave them money and I have never seen anything from them. We could sue them,” says Ecclestone. He adds that the reason he hasn't taken legal action is that he wants to keep the prospect of the race alive as other groups are considering taking over the contract from Hindery.
“I've kept it going because somebody might come up and there has been two or three people who are interested and are looking into it. If anyone comes in today, they can have it.”
The history of the Grand Prix of America reads like a catalog of errors. The race was announced with great fanfare in October 2011 at a press conference hosted by New Jersey's governor Chris Christie. However, the cracks soon started to appear as in August the following year its president Tom Cotter unexpectedly resigned. The next month saw the exits of Trip Wheeler, the chief marketing officer of the Grand Prix of America, and Michael Cummings, PIRA's chief financial officer.
In September 2012 the race was also listed on the provisional 2013 calendar which caused Hindery to release a statement saying “I am proud that years of hard work have brought us to this point and we look forward to bringing world-class Formula One racing to New Jersey.” It was followed by a statement from Christie who said that he had spoken to Hindery and “asked if he needs any help and he said, 'No.' I am not looking for problems. I heard there may be problems, so I called. And he told me it's not a problem.” In fact there was indeed a problem because the race did not take place in 2013.
The wheels came off it at almost the same time that it was listed on the calendar as Ecclestone revealed that Hindery's 10-year contract had been torn up after he failed to comply with its terms. In May this year, Ecclestone signed a new 15-year contract with PIRA after it agreed to work with experienced street race promoter Chris Pook who founded the Long Beach Grand Prix. It was reported by Reuters that the F1 Group had invested in the New Jersey race but in fact it had simply given PIRA the $10 million loan which is personally guaranteed by Hindery. This still wasn't enough to get the Grand Prix off the grid and it now has the dubious distinction of being the only proposed race in the 63-year history of F1 to be dropped from the calendar twice.
“All it needs is somebody serious to come up and say we will get behind this and make it happen. I have given Hindery too much leeway. I wanted to believe that he would do it,” says Ecclestone. He is still confident that the race will take place in future and adds that the promoter “may not be Hindery. Maybe the venue will be a little bit different.”
With that much uncertainty it looks like there are still many laps left to run before any F1 racing gets under way in New Jersey.
