Understanding the Formula One fallout
It's a business deal that could further cement Austin's global presence. The construction of a world class Formula One track is hitting its fair share of speed bumps. YNN's Sebastian Robertson shows us the big picture behind the vision, and where it took a wrong turn, in the video above.
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Major players in Formula One fallout Compiled by Online Producer Anne Szilagyi
Bernie Ecclestone, Formula One CEO As the head boss of the international racing league, Ecclestone works with the Circuit of the Americas, investors and race promoters on bringing his races to Austin.
His contractual needs and assorted demands must be met in order for Austin to host the U.S. Grand Prix.
Circuit of the Americas
The name of the race site near Elroy in southeast Travis County. Circuit of the Americas is also a group of F1 developers, organizers and investors who are involved in hosting the U.S. Grand Prix in Travis County.
Bobby Epstein, an Austin-based private investor, and race promoter Tavo Hellmund are among COTA’s founding partners.
Hellmund is the president of Full Throttle Productions, the promotion company in charge of marketing the U.S Grand Prix in Central Texas. Hellmund is a longtime family friend of racing mogul Bernie Ecclestone.
While Hellmund maintains his role is content-driven and has nothing to do with money, he blamed financial failures for the current stalemate between race developers and Formula One
He also serves as a founding partner of Circuit of the Americas.
Susan Combs, Texas State Comptroller
Combs is in charge of signing off on the use of Texas’ Major Events Fund to support F1—to the tune of $25 million a year. Recently, Combs told YNN she will use her own “discretion” on whether or not the state will in fact dole out to the racing giant.
The comptroller maintains that she never promised to allocate the $25 million to F1 before the race.
The Austin City Council
Race organizers asked to the council to serve as a “host city” for the U.S. Grand Prix in order to secure the $25 million from the state. After several meetings and public forums over the issue, the council agreed to the host city sponsorship in June of 2011.
The cost of the sponsorship was $4 million a year, a tab eventually picked up by race developers, not city taxpayers.
Mayor Lee Leffingwell
The Austin mayor has always been a strong proponent of Formula One in Austin. When the council voted for more time to mull over the city’s proposed contract with F1, Mayor Lee Leffingwell was the only descending vote.
Council Members Laura Morrison and Kathie Tovo
Morrison and Tovo were the only descending votes against the city’s host-city sponsorship with Formula One.
When construction on the F1 track site in southeast Travis County was postponed indefinitely Nov. 15 2011, Morrison said, ‘"I opposed the city participating in this in the first place. I thought it was a bad deal for the taxpayers then. I think it's an even worse deal for the taxpayers now.”
The Circuit Events Local Organizing Committee, or CELOC
CELOC is the board slated to act on the city’s behalf to secure $25 million in tax dollars from the state’s Major Events Trust Fund to help bring the U.S. Grand Prix to Austin in 2012.
The board serves as a conduit between the City of Austin and the Texas Comptroller, acting as a quasi-governmental agency. Since public dollars are at stake, open meetings laws apply, which allows for some public participation.
The CELOC board members include:
Sam Bryant- Bryant Wealth Investment Group, LLC
Anne Smalling- President - HM International, LLC (HMI)
Stephanie Richmond- Owner - Richmond International Connections
Ford Smith- President and Owner of Texas Enterprises, INC
Wayne Hollingsworth- Attorney- Armbrust & Brown
Aleshire is the attorney representing three Travis County residents who filed a lawsuit in district court, claiming Combs reached a deal with race promoters illegally.
The suit states that in order for the state to use money from the Major Events Fund for a project like the U.S. Grand Prix, there must be a “highly competitive selection process,” an offer for tax incentives and opportunities for public input—conditions the plaintiffs say were never met.
Aleshire said on May 10, 2010, Comptroller Combs sent an email to the owner of F1 racing, certifying state tax dollars to be paid in the amount of $25 million for 10 years. However, it wasn’t until 15 days after the letter that news broke of the tax incentive offer made by the state, not by city council, as required by law.
Dates to remember
Dec. 7, 2011 The deadline for the World Motor Sports Council to approve Formula One’s race calendar for 2012. If contractual woes are not mended between COTA, F1 and Full Throttle by this time, the U.S. Grand Prix may not be in the stars for next year.
Nov. 18, 2012 The scheduled, but not sanctioned, date for the highly contested U.S. Grand Prix in southeast Travis County.