A contentious lawsuit has erupted between the two companies that put on Louisiana’s first IndyCar racing event this year in Avondale.
The dispute could put a question mark next to an event that local officials hoped would become a regular attraction and spur development on the West Bank of Jefferson Parish.
A subsidiary of Andretti Sports Marketing, an event promoter based in Indianapolis, filed a federal lawsuit Tuesday against NOLA Motorsports Park, the company owned by Laney Chouest that built the $75 million track where the race was held in April.
Andretti, which is under contract to organize the Indy Grand Prix of Louisiana through 2017, claims it had gotten assurances from NOLA Motorsports that there would be enough state grant money to help compensate the company for its services.
That turned out not to be the case, according to the lawsuit, which alleges that the nonprofit entity set up by NOLA Motorsports to collect the grant money is now “nearly insolvent” and has prioritized paying off vendors who might be able to place liens on the track, rather than Andretti.
NOLA Motorsports Park President Kristen Engeron did not immediately respond to a request for comment Wednesday.
At this point, it’s not clear what impact the litigation might have on future Indy Grand Prix races in Louisiana.
Jefferson Parish officials have hoped the new event would spark an economic boom for a mostly undeveloped, 13-square-mile area at the West Bank end of the newly expanded Huey P. Long Bridge.
Joseph Bruno Sr., a lawyer representing the NOLA Motorsports Host Committee, the nonprofit entity ensnared in the lawsuit, insisted that the dispute would not halt future races. He said another organizer could be brought in if necessary.
“We ... believe that this is a great racing venue and have high hopes that we can do it again,” Bruno said Wednesday. “We trust that this will have no impact on future racing ... at the track.”
Last year, the track negotiated for Andretti to bring a full-fledged IndyCar race to Louisiana for the first time. As part of their agreement, NOLA Motorsports created the nonprofit group to receive $4.5 million from the state to fund improvements at the track.
Andretti signed a three-year contract to organize the Grand Prix beginning in 2015; the agreement said only $2.6 million of the state money would be used on track upgrades. Andretti said it was assured there would be enough money left over to compensate it for all of its services.
Instead, the lawsuit claims, $3.4 million of the state grant ended up being spent on improvements, leaving Andretti and other vendors short.
The lawsuit adds that Andretti had to put up with undue meddling from Chouest and “horrific” weather to successfully pull off this year’s race, which drew several thousand spectators on the same weekend as the popular French Quarter Festival in New Orleans.
Andretti said that as of Tuesday, the company was still owed $645,000 by track officials, a sum that doesn’t include future amounts due under the organizer’s contract. Andretti said it also has not been reimbursed for $206,000 worth of expenses approved by track officials.
The company said it met with Michael Sherman, a representative for NOLA Motorsports, on April 29 but was told “categorically that no further payments under the agreement” would be forthcoming.
According to the lawsuit, Sherman said the nonprofit holding the grant money was “nearly insolvent, and that any remaining capital would be used to pay vendors who could potentially place a lien” on the track.
Andretti’s lawsuit accuses officials of NOLA Motorsports Park of various misdeeds, including breach of contract, fraud, unjust enrichment and unfair trade practices. The organizer seeks both incurred and future damages.
Andretti President John Lopes did not immediately respond to a request for comment Wednesday.
Bruno said this isn’t the first dispute with Andretti. Prior to the race, the Host Committee sought an injunction against the company, which was withholding ticket-sale receipts, Bruno said.
“We resolved it amicably and are frankly a little surprised” at the new lawsuit, he said.