EDMONTON — The Edmonton Indy, this city's signature summer auto racing event, has turned its last wheel and turnstile.

Three sources familiar with negotiations between the City of Edmonton and race promoters Octane Management of Montreal confirmed Tuesday evening the July event will be taken off the Indy Racing League schedule immediately.

The race lost $9.2 million in its first two years and an estimated $3 million in 2010.

"It is tremendously disappointing, particularly after the fanfare of welcoming Octane to the fold and having the press conference with the mayor (in July)," said Terry Angstadt, president of the IRL's commercial division, who isn't hopeful of a return to Edmonton in the foreseeable future.

"Just in terms of the way it has happened, it doesn't make you feel terribly welcome. We always say that we need places that want us to be there. We thought we had that in Edmonton. To have this come down and not receive a call is a little shocking."

Octane and the city reached a three-year agreement last July to hold IRL races on the western side of the City Centre Airport through 2013. However, one of the facility's two runways was closed permanently in August and later that month the city asked Octane to move the race to the northeast side of the airfield, a shift that would leave the one remaining runway open year-round. A source said Octane agreed to the move but wanted the city to cover the increased costs associated with it, most notably paving.

"I was told our promoters had the new track laid out and estimated the improvements required. I think it was maybe in the $2-million to $3-million range," Angstadt said.

"But our promoter got a call and was told it was voted out."

Octane spokesman Normand Prieur declined to comment Tuesday. But Ward 2 Councillor Kim Krushell confirmed negotiations with Octane had broken down, and the city's chief financial officer, Lorna Rosen, said the race will not be held here in 2011.

Rosen said the $5.5 million council approved July 21 as its three-year contribution to the event was just not enough to keep the race going.

"We worked really hard to see if we could make this work," Rosen said. "Council gave us a reasonable mandate. It just wasn't possible within the cost structure I had."

Krushell agreed that it was purely a financial decision.

"It all comes down to money," she said. "When you consider that the fixed costs for this race are significant, it's a real challenge to make a profit, and that's a big issue."

Krushell said she was unsure of what the city's next steps will be.

"It's unfortunate," she said. "I wish we could have made the Indy work. But in terms of cash, we heard loud and clear from citizens that they didn't want us to continue to support it."

The Indy race had previously been promoted by Edmonton Northlands and lost $9.2 million in the first two years, and was expected to lose about $3 million more in 2010. That figure has not been released yet.

To lighten the massive financial burden on Edmonton taxpayers, city council removed Northlands as race promoter just prior to the 2010 event, put the promotion in private hands and on July 21 agreed to contribute $5.5 million to the event over the next three years as a major sponsor.

That deal did not remain intact through the summer and Octane was unable to proceed with its plans to market the event, due to the uncertain financial conditions relating to the potential track relocation. A source said Octane grew frustrated with the delays and declared last Friday as a deadline for a new deal, as the company was anxious to begin marketing the race and selling ticket packages to take advantage of the Christmas sales period.

Angstadt said he believes Octane president Francois Dumontier will work hard to find another venue for the race, perhaps as early as 2011. If not, the two sides will work toward 2012.

"He is actively pursuing that," said Angstadt.

dbarnes@edmontonjournal.com

cpierse@edmontonjournal.com