Business

Detroit's Lexus Velodrome In the Red after First Year

February 14, 2019, 8:09 AM


Bubble as seen from the highway.
(Photo: Facebook, Lexus Velodrome)

The indoor cycling track known to many as nothing more than a curious bubble along I-75 isn't doing so hot.

The Lexus Velodrome — just the second racetrack of its kind in the U.S. — is in the red after its first year, according to a new report by Crain's.  

The velodrome designer-turned businessman has learned the difference between chasing dreams and paying bills. Operating a $4.5 million, 64,000-square-foot venue solely with the support of niche bicycle racing fans just isn't viable.

"You have hopes and dreams, then you have what you consider the reality," said [Dale] Hughes, 69, of Rochester Hills, who is executive director of the Detroit Fitness Foundation, the nonprofit operator of the velodrome. "We've done more than what we actually thought was gonna be our first year."

The reality is that from a financial standpoint, the velodrome fell short of expectations. The goal was $1 million in revenue. It achieved around $900,000, with operating costs totaling $950,000. So, it fell about $50,000 in the red — not ideal, but not unusual for a new business, especially as unique as a velodrome.

Though the track is popular among the fans it caters to and has drawn people from all over the world, moving into the black will require marketing it to the masses, Crain's says. The plan includes holding corporate events, private parties, and other sports and activities.


Read more:  Crain's Detroit Business


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