Austin's Formula One race is falling apart: Construction halted on the track, financial support withdrawn
By imah
on
Sunday, November 20, 2011
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Circuit of the Americas (COTA) has suspended construction of the Formula 1 track being built in Elroy, just southeast of Austin.
A press release sent Tuesday afternoon makes it clear that Circuit of the Americas and Formula 1 have reached a road block in agreeing to a contract. "We have spent tremendous resources preparing for the Formula One 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.
According to COTA, the track and Formula 1 agreed to a contract timetable which has not been met. Without a contract with Formula 1, there can be no race. Despite plans for MotoGP and concerts, without Formula 1, the track has no chance.
 Formula One Heiress Tamara Ecclestone |
In a statement issued at noon Tuesday, State Comptroller Susan Combs cites the high-profile and very public disagreement that has emerged between Tavo Hellmund and his Full Throttle Productions on one side and the investor group funding the Circuit of the Americas track on the other.
According to the State Comptroller’s statement: “The recent announcement of an annual Formula 1 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.”
This is the first public acknowledgement that Austin’s U.S. Grand Prix is in great jeopardy. And it’s led Combs to change the state’s stance on a commitment to helping the track financially — even if a new application is submitted.
Combs continues in the statement: “Let me state clearly: We have not paid out any money for the Formula 1 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.”
That means no money will be committed before the race happens, which is a complete change from what had been discussed by the COTA and the State Comptroller’s office just five months ago.
Combs has been a vocal proponent of Austin’s Formula 1 deal and was one of the first to support it publicly. Her commitment to the race came in the form of a promise to pay $25 million dollars per year for 10 years out of the state’s METF. The money was to be used to help pay the Formula 1 license fee and could be paid as early as one year before the race was held.
The METF money comes from tax revenue collected from those who attend big events around the state. Their hotel stays and sales taxes go into the fund.
As reported by CultureMap on Monday, the investor group, led by president Steve Sexton, appears to be working to move Hellmund out. Hellmund, however, is the main connection COTA has with Formula 1 boss Bernie Ecclestone. Hellmund and Ecclestone are lifelong friends.
Suffice it to say this: The U.S. Grand Prix is now in deep trouble and may not happen at all.
source: houston.culturemap.com
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Category: Breaking News
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