Short Circuit In Austin

[Steve Cassani]

The road to a US Grand Prix may run-one way-through New Jersey...

Game over for U.S. Grand Prix and Circuit of the Americas - Autoweek

[Steve Cassani]

Susan Combs statement:


A Statement from Comptroller Susan Combs Re: Formula 1
November 15, 2011

It’s no secret that I’ve supported Texas hosting a Formula 1 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 1 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 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. 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 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.
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.

[Steve Cassani]

Susan Combs statement:


A Statement from Comptroller Susan Combs Re: Formula 1
November 15, 2011

It’s no secret that I’ve supported Texas hosting a Formula 1 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 1 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 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. 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 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.

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.

[SwiftDB4]

Thanks for the info Steve. Personally I don't favor state governments funding sporting events at all considering the financial bind most are in. I know we're all gearheads, but laying off teachers to pay $25M/year to Ecclestone just doesn't seem right. I know sporting enterprises claim economic benefits for their locales, but I've never seen real financial proof of that. Look at the Olympic Games. Guess that's why F1 is so heavily into Asian races. Maybe their governments can afford to burn thru insane amounts of cash? If the 2 private investors involved with Austin are billionaires why don't they fund the whole deal?

[Steve Cassani]

I agree, but generally. Even if the reports of economic growth encouraged optimism among investors I would oppose public funding of sporting events. Our economies (city, state) have matured well beyond any rationale for spending public dollars where private investors will not go. Several years ago the citizens of Seattle wisely turned down an offer by the owner of the Seattle Sonics. He and several leading members of the business community advocated public funding of a new arena. If their claims of economic stimulus were to be believed, there was sufficient cash flow to local business to assure a return on their dollars. The fact the business owners wished not to make the investment was to my eye a good reason to deny them access to public funds.

Texas has had good results, advancing local investors the dollars the state would collect in taxes after the event. This time the leaders of the Austin project failed to secure a committment the F1 race would be held. Susan Combs wisely smelled a red herring and turned the state program on its head-no money until you don't need it, at least none to cover the sanctioning fee. After that, drop by the office and apply, right along with dozens of other proposals on her desk.

[Wayne Maybury]

Historically the US has had a difficult time hosting F1 for whatever reason(s). How could two races possibly be feasible? I was very suspicious about the entire Austin situation the second that the New Jersey race was announced. The NJ race makes a lot of sense because it can be held just before, or just after the Canadian Grand Prix in Montreal thereby keeping costs way down, as if anyone in F1 ever worries about the cost of anything.

Wayne