Seafair hydroplane race in jeopardy

The future of the Seafair unlimited hydroplane race remained in question Monday after boat owners could not agree whether to accept the latest financial offer from the race's organizers, a package that is less than in previous years.

The 10 owners split 5-5 on the issue, which will now go before the board of H1, the organizing body of unlimited hydroplane racing, on Thursday. If the board votes not to accept Seafair's offer, then the hydroplane race that has been a fixture of Seattle summers for 60 years could be in jeopardy.

"It's shaky right now, let's put it that way," said Ken Muscatel, owner and driver of the U-25, on Monday night.

The dispute is the culmination of financial problems that Seafair has battled since last June when its title sponsor, General Motors, declared bankruptcy.

Knox said GM had a commitment in the "mid-six figures" to Seafair that it was unable to keep.

Seafair is hoping to announce a new title sponsor soon — speculation has centered on Albert Lee as a possibility. But the loss of the GM money has Seafair scrambling to pay past bills and cut costs.

Seafair made an initial offer last month of $100,000 to the boat owners through H1 that was unanimously rejected; in the past, they received $170,000. The money is basically an appearance fee used to pay boat expenses. There is no real prize money, with all of the boats receiving essentially the same amount of money (H1 also takes about a 25 percent cut for its expenses).

After the initial rejection, Seafair upped the offer to $130,000 in cash plus $80,000 in other compensation, such as tickets, according to Seafair president Beth Knox.

"The unlimiteds are important to us, but the bottom line is we don't have an abundance of funds that we can draw from," she said.

Knox confirmed that Seafair was unable to pay $145,000 in permit fees to the Seattle Parks and Recreation Department for last year, but that an agreement has been worked out to pay it off over the next three years.

"We had a very challenging year in 2009," she said. "GM did not meet its financial obligations at all, so it put us in a very difficult position."

The H1 board consists of four boat owners and representatives of each of the four current race sites. If there is a tie, H1 chairman Sam Cole would cast the deciding vote.

Knox is hopeful that the H1 board will approve the new dealThursday. But she said that if it doesn't, Seafair will still go on.

She said that the Blue Angels have already been confirmed and that there could be alternate hydroplane racing, including the limiteds, or possibly an invitational of unlimiteds that would agree to race.

"We certainly hope that that doesn't happen," she said.

Cole, however, said that "some of the owners have been very passionate about not racing for anything less than the full prize money."

Muscatel said that the money has remained the same "for years and years and years, which is why some of the owners feel like they can't take a cut."

This would be the 60th year for unlimited hydroplane racing in Seattle and Muscatel and Cole each said that history could factor into the final decision.

"We've raced in Seattle for 60-plus years and we're not ready to abandon Seattle by any stretch of the imagination," Cole said.

Knox said that despite the current struggles, there shouldn't be a long-term concern about the fate of Seafair, especially if a sponsor can be secured soon.

"Everyone is working hard to regain some of the ground we lost in 2009," she said. "The good news is I think we are on track to doing that, but it will take at least a year to get to that point."

Bob Condotta: 206-515-5699 or bcondotta@seattletimes.com