City boasts second NASCAR street race's increasing economic benefits

NASCAR revved Chicago's economic engine during its second Chicago Street Race this year.

The races held July 6-7 generated $128 million in total economic impact, a 17% increase over last year's races, according to a report commissioned by Chicago's tourism agency, Choose Chicago, and completed by Temple University.

The races saw an even bigger increase in media exposure, valued at $43.6 million, or an 85% increase over last year, due mostly to a rise in international media coverage, according to a separate report.

The media exposure was equivalent to six Super Bowl ads for the city, the report said.

"This is a race without parallel in the world, and I am pleased that the event has generated positive economic impact and supported hundreds of jobs over the last two years," Mayor Brandon Johnson said in the announcement.

The city's economic analysis showed that most metrics improved over last year, except for television ratings and total visitors.

The reports found:

• Total attendance was 74,922 over both days — a decline from last year’s 79,000 total visitors.
• 53,063 unique visitors attended the races, up from 47,405 last year, thanks partly to the introduction of single-day tickets.
• 51% of visitors came from outside Chicago.
• The race generated 38,095 hotel room nights, up 29% from 29,532 hotel room nights in 2023.
• 11% of visitors said it was their first time visiting Chicago, more than twice as many as last year.

The $128 million of "total economic impact" includes money spent by visitors and wages from the 865 jobs — mostly in food, beverage, retail and entertainment — supported by the race.

The report also found the race generated $9.6 million in state and local tax revenue, including sales taxes, personal income taxes and hotel occupancy taxes. Taxes from out-of-towners totaled $3.9 million, according to the report.

NASCAR's second street race in Chicago, part of a three-year deal with the city, was a departure from the racing franchise's typical oval races. Next year's Chicago Street Race race is July 5-6.

NASCAR marketed the Chicago event as an introduction to a mostly untapped racing market and an opportunity for the city to show off itself to a large television audience.

Nielsen ratings, though, show viewership was down this year to 3.8 million viewers from 4.6 million last year. The report found this year's races generated $43.6 million in media value for Chicago, the equivalent of 349 30-second advertisements during the Grant Park 165 on NBC.

After the first race weekend in 2023, critics pointed out that the city shouldered more costs than NASCAR was paying. Chicago's costs included an estimated $3.5 million in police overtime and road construction. Meanwhile, NASCAR paid $620,000 to the Chicago Park District.

Johnson said he negotiated a better deal with NASCAR for this year's race, having the racing franchise pay $2 million to cover those extra costs. It's unclear if the new deal covered all of the city's costs. The city spent more on police overtime this year, an estimated $1.4 million, according to the South Side Weekly.

Scott Niederjohn, a professor of economics at Concordia University Wisconsin, said economic analyses such as this one almost always overestimate the benefits while ignoring taxpayer-financed subsidies and inconveniences to local residents.

"The primary flaw is that such studies count spending that would have occurred anyway as net spending for this event or they fail to account for the local and tourist spending that was crowded out by the event," Niederjohn told the Chicago Sun-Times.

"They also assume, incorrectly, that all of the benefits stay local when, in fact, much goes to out-of-town vendors and suppliers who are there only for the event," he said.