The questions about the planned United States GP in Austin, raised by remarks made by Bernie Ecclestone in Abu Dhabi, have resulted in some interesting public revelations in Texas. The state Comptroller Susan Combs confirmed that no state funds would be paid out in advance of the event. The plan had been for the first year payment to be made before the event and then money coming in would offset the investment. It seems that this is also part of a dispute between the Circuit of the Americas and Tavo Hellmund, who holds the contract to run the race.
“It’s no secret that I’ve supported Texas hosting a Formula One race since 2008,” she said. “I believe a well-organized event of this magnitude can be a tremendous benefit to Texas if done right. Investors, businesses and event organizers want to come to Texas because we’ve developed an economic climate that is attractive, our state is a great location for events, and we’ve got space and potential to grow. A tool for recruiting large events to the state is the Major Events Trust Fund (METF), which was created by the Texas Legislature in 2003. In the past two years, eligible METF recipients have included the NFL Super Bowl XLV, the NBA All-Star Game and the NCAA Men’s and Women’s Final Four tournaments. The support provided by the METF comes from sales, hotel, beverage and other tax revenue generated by out-of-state visitors who attend the event. When the United States Grand Prix was formally announced, it was the only Formula One race scheduled in the U.S. During the past 18 months, organizers have taken many steps to bring high-profile motor racing to Central Texas, including the development of the Circuit of the Americas, and the announcement of the global MotoGP and V8 Supercar race series starting in 2013. The recent announcement of an annual Formula One race in New Jersey is a concern, as additional races have the potential to reduce the number of attendees to a Texas race, thereby decreasing the economic impact. Additionally, the reports of a slowdown in construction at the Circuit of the Americas, and recently publicized disagreements between the race rights-holder and the circuit developers have prompted speculation about whether the Austin race will even occur. The ongoing controversies are a concern and we will continue to monitor them. Let me state clearly: We have not paid out any money for the Formula One event. The only dollars that can be spent on the United States Grand Prix are tax revenues attributable to the successful running of a race. The state of Texas will not be paying any funds in advance of the event. Further, as is the case with all METF events, each application will be reviewed and analyzed for its likely economic impact and only after the race occurs would any funds be disbursed. If an METF application is submitted, it will be thoroughly vetted and economic impact data scrutinized based on the actual circumstances for that event. Ultimately, I am responsible for protecting the interests of Texas taxpayers, first and foremost. I will not allow taxpayer dollars to be placed at risk. My position on that has not changed.”
Blaming the New Jersey event sounds like a politician looking for excuses, as it is clear that the intention of having more than one race in the US is intended to help both. They are so far apart that ticket sales will barely be affected and the fact that there are two events will create more buzz. Thus, one must conclude that Combs is trying to force the issue, probably to get Hellmund to sign over the race contract to the circuit owners. The fact is that both sides need the other. Hellmund is committed to paying Ecclestone for the race; but he needs a circuit on which to run the race. The circuit owners have sunk large sums into construction and are not going to walk away. The way forward is thus to sort out the mess by getting the circuit and the contract under the control of the same person.
Combs’ statement has been followed by an announcement that construction of the project is suspended “until a contract assuring the Formula 1 United States Grand Prix will be held at Circuit of The Americas in 2012 is complete. The race contract between Formula One and Circuit of The Americas has not been conveyed to Circuit of The Americas per a previously agreed upon timetable”.
While construction at Circuit of The Americas has progressed as scheduled with over 300 workers at the construction site daily, all work will suspend immediately. The delivery of the Formula One Grand Prix race contract will allow construction operations to resume.
“We have spent tremendous resources preparing for the F1 and MotoGP Championship races, but the failure to deliver race contracts gives us great concern,” said Bobby Epstein, founding partner of Circuit of The Americas. “We believe the United States is vital for the future of F1 and its teams and sponsors. Given the purpose-built Tilke design, creating a unique fan experience and iconic challenge for drivers, we hope that Texas will not be left behind. More than 100,000 fans have expressed an interest in purchasing tickets for Formula One alone.”
“It is in the best interest of all parties to reach a timely resolution,” said Red McCombs, chairman of McCombs Enterprises and founding partner of Circuit of The Americas. “Local businesses, fans and the State of Texas are counting on us.”