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Formula 1
F1: State Funding For US GP At Austin Under Threat
Texas State Comptroller Susan Combs says that no state funds will be paid out before the Austin GP...
Austin Formula One CEO Bruce Knox (Left) and construction official Buddy Reed (Right) look over plans at the F1 site in Austin, Texas. (Photo: Mike Hembree, SPEED.com)
The ongoing questions surrounding the US GP in Austin took another turn Tuesday when Texas State Comptroller Susan Combs confirmed that no state funds would be paid out in advance of the event.
The race was built around the expectation that the Major Events Trust Fund would pay an annual sum of $25 million, which would in effect cover the sanctioning fee collected by Bernie Ecclestone. Such payments are always made well in advance of races and thus far none has been made to cover the inaugural Austin event.
Combs, who visited the 2010 British GP and met with Ecclestone, has been a keen supporter of the race, and has fought off any criticism of public money being used to fund a F1 race.
However, in a statement Tuesday she appeared to be back pedaling in terms of that support. She makes it clear that the arrival of the New Jersey race in 2013 will have an impact, and is clearly concerned about the behind the scenes dispute between Tavo Hellmund, the original driving force behind the race, and those involved in running the Circuit of the Americas as a business.
She also says that money would only be paid out after the first race if the economic impact could be demonstrated.
If the $25 million is not forthcoming then the sums do not add up for those behind the Austin race and clearly the whole event could be under threat.
Combs statement reads as follows:
“It’s no secret that I’ve supported Texas hosting a Formula One race since 2008. 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.”
Adam Cooper notched up his 26th season as a racing journalist in 2010. He has written about F1 for SPEED.com since 2005. Follow him on Twitter.
The race was built around the expectation that the Major Events Trust Fund would pay an annual sum of $25 million, which would in effect cover the sanctioning fee collected by Bernie Ecclestone. Such payments are always made well in advance of races and thus far none has been made to cover the inaugural Austin event.
Combs, who visited the 2010 British GP and met with Ecclestone, has been a keen supporter of the race, and has fought off any criticism of public money being used to fund a F1 race.
However, in a statement Tuesday she appeared to be back pedaling in terms of that support. She makes it clear that the arrival of the New Jersey race in 2013 will have an impact, and is clearly concerned about the behind the scenes dispute between Tavo Hellmund, the original driving force behind the race, and those involved in running the Circuit of the Americas as a business.
She also says that money would only be paid out after the first race if the economic impact could be demonstrated.
If the $25 million is not forthcoming then the sums do not add up for those behind the Austin race and clearly the whole event could be under threat.
Combs statement reads as follows:
“It’s no secret that I’ve supported Texas hosting a Formula One race since 2008. 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.”
Adam Cooper notched up his 26th season as a racing journalist in 2010. He has written about F1 for SPEED.com since 2005. Follow him on Twitter.
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