Nuerburgring branches out
July 24, 2009
The top series in world motorsport moves on from Germany to Hungary this week, but the site of the German Grand Prix isn't standing still.
The Nuerburgring race track is in the process of becoming a year-round tourist destination, an entertainment and conference center.
It's a project upon which the government of the state of Rhineland-Palatinate has pinned huge expectations. But the project's public financing has also stirred up an equal dose of controversy.
Finishing touches
Up a set of stairs from the road which bounds the Nuerburgring racetrack, inside a glass-and-steel promenade behind a brand new grandstand, builders are putting up frames for a new set of shops and displays.
The new Nuerburgring complex will have restaurants and bars, high-end shops selling gear from the likes of Ferrari and Aston Martin, a German racing museum, and a small amusement park complete with the world's fastest roller coaster running through the new grandstand.
Most of the complex won't be open until mid-August, but a number of tourists have already arrived to take a look.
"It's nice, very nice," says one young man from Holland.
His friend adds, "I'm sure we'll come back, we've been coming for the past three years to drive the Nordschleife and this is a good extra. We are waiting for the roller coaster to open."
These two guys - and at the Nuerburgring it is mostly guys you meet - are here to drive the Nordschleife, the northern loop of the old race course.
The Nordschleife is no longer used in races today – after a number of severe crashes it was deemed unsafe for racing by the FIA, motorsport's governing body. But motor-mad tourists flock to it, paying about 20 euros to do a lap in their own, rather slower, cars.
Tens of thousands take up the track's offer every year, and it's this kind of year-round business that the Nuerburgring has begun to emphasize.
Keeping busy
"We are the busiest track in the world," said Nuerburgring CEO Walter Kafitz during an interview in his trackside office.
"We have one hundred races, and two hundred other events a year beyond motorsport. Rock concerts, conferences, product presentations, advertising. Things like Formula 1, the 24 hours race, the 1000 km race…are to show our history of 82 years," he said.
Grand Prix weekend, which traditionally comes to the Nuerburgring every other year, draws well over 100,000 fans, making it the track's biggest single event. But the Nuerburgring pulls in 2 million visitors over the course of each year, says Kafitz. With the new development, "we're looking to add another 500,000."
But Kafitz envisions the new Nuerburgring as bringing about more than just a 25 percent rise in attendance. He'd like to see people who come to the track anyway - to drive the Nordschleife or see a race - to stay longer and spend more money.
A necessity
"Every promoter of Formula 1 Grand Prix loses money on the race," he says. "because the fee that is to be paid to F1's management company is so high."
The fee, contractually, cannot be disclosed. But some have estimated that the Nuerburgring and other tracks like it lose more than 10 million euros on each race.
"We can't just add that into the price of a ticket," says Kafitz, keeping in mind the current state of the economy. The decision, he says, to diversify even further, even at a cost of more than 280 million euros, was one the track had to make.
The stakeholders
Investment in the future is good for any business, but the Nuerburgring is publicly owned, which has complicated the situation.
The capital outlay to complete the project is 100 percent taxpayer money, nine tenths from Rhineland-Palatinate, the state where the track is located; and one tenth from Landkreis Ahrweiler, its administrative district.
The circuit had originally secured private investors from Switzerland and the US to provide almost 50 million euros of capital for the New Nuerburgring's operation, but they both pulled out just weeks before the opening date.
That the investors could do that without breaching their contracts has cost the state finance minister Ingolf Deubel his job, and local government is now on the hook for the success or failure of the project.
A good impression
Across the street from the track, near a parking lot, is another pair of car enthusiasts here to drive the Nordschleife – this time, from France.
They are just the kind of folks the new Nuerburgring would like to see open up their wallets a little wider in order for the project to be a winner. Their judgement is positive.
"It's really, really cool," one says, in heavily accented German.
"Before the end of August, we're coming back. This place opens up on the 15th, and we'll be back before the end of the month."
The taxpayers of Rhineland Palatinate are likely to say "Merci."
Author: Matt Hermann
Editor: Neil King