Updated 11/16/2011 08:36 AM
Developers freeze F1 construction indefinitely
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Construction is suspended indefinitely on the Circuit of the Americas race track in Southeast Travis County.
The track's developers say the project's Austin-based promotor, Full Throttle Productions, has not met contract deadlines regarding bringing the U.S. Grand Prix to Central Texas. The first race is set for November of next year.
The Circuit of the Americas track near Elgin has been under construction for more than a year.
“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,” Bobby Epstein, founding partner of Circuit of the Americas, said in a statement Tuesday.
In a statement released several hours later, media representatives with Full Throttle Productions said, “After years of effort in getting F1 to Austin, Full Throttle Productions and city, county and state officials have done all we could. It is the responsibility of Circuit of the Americas to bring it across the finish line. For the sake of everyone, we are hopeful that they can reach an agreement with Formula One.”
Investors with Circuit of the Americas secured Austin's blessing in the form of a host-city sponsorship to drive $250 million in state funds into the hands of race officials over the next ten years. The Austin City Council approved the sponsorship in June. However council members Kathie Tovo and Laura Morrison voted against the deal.
"I opposed the city participating in this in the first place,” Morrison said. “I thought it was a bad deal for the taxpayers then. I think it's an even worse deal for the taxpayers now.”
Council Member Mike Martinez was among the sponsorship's supporters. He said Austin residents should understand that no taxpayer money was ever spent on F1, nor ever will be.
Austin attorney Bill Aleshire filed a lawsuit on behalf of several Travis County citizens earlier this year, claiming State Comptroller Susan Combs illegally reached a deal with race promoters regarding state funding for the event. Aleshire said the troubles are just beginning for city leaders.
“The mayor and the council should be embarrassed by what they’ve done so far on this, but it’s not over for them,” he said. “We have yet to see a contract that’s actually signed by Mr. Eccelstone’s Formula One organization, and that’s required in the statue [to authorize state funding] as well."
Monday, Combs voiced her own concerns about the race’s future. She said she has yet to receive an application from F1 officials for state funding for the event. “I am concerned with reports that have come out over the weekend regarding possible problems with the Texas race even taking place," Combs said.
F1 CEO Bernie Ecclestone has harbored his own doubt that his races will ever come to Central Texas. The racing mogul voiced his frustrations in September, claiming there were problems with Texas promoters.
Ecclestone elaborated on those comments this past weekend at a race. He told reporters there appears to be a breakdown in communication between the people building the new track and those promoting it.
More than 300 people were working on the actual race site in southeast Travis County before its closure.
Read the Circuit of the Americas full statement in the box below.
Organizers of Circuit of the Americas, a premier motor sports racing and entertainment venue being developed in Austin, Texas, are suspending further construction of the project 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 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. “We believe the United States is vital for the future of Formula One 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.”
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.