Formula 1 crashing in Texas
Austin Formula 1 is falling apart: The U.S. Grand Prix withdraws theirapplication as Texas withdraws financial support
- Susan Combs, Texas State Comptroller, Hermann Tilke and Tavo Hellmund
- Bernie Ecclestone, Suzanne Combs, and Tavo Hellmund at the British Grand PrixJune, 2011
The State of Texas has withdrawn its commitment to help pay for Austin’s Formula 1 U.S. Grand Prix. Further, even if the State wanted to help, there is not current application for funding on file. The application submitted by Circuit of the Americas back in July for $25 million of the state's Major Events Trust Fund (METF) was withdrawn in September.
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's Full Throttle Productions and the investor group funding the Circuit of the Americas track.
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.”
No money will be committed before the race happens. This is a complete change from what had been discussed by the COTA and the State Comptroller’s office just 5 months ago.
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.
Again according to 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. This 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 Major Events Trust Fund (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 CEO Steve Sexton, appears to be working to move Tavo Hellmund out. Hellmund, however, is the main connection COTA has with Formula 1 boss Bernie Ecclestone. Tavo and Bernie are life-long friends.
The U.S. Grand Prix is now in deep trouble and may not happen at all.