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November 18th, 2011, 03:03 AM   #1
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From Sport Rider http://www.sportrider.com/news/146_1...ubt/index.html







The still-under-construction Circuit of the Americas near Austin, Texas, sent out a press release today stating that it was “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.” After much fanfare back in April of this year in announcing that the circuit had signed a 10-year contract with Dorna to hold a MotoGP race starting in 2013 (with the announcement of a 10-year contract for F1 signed earlier in May 2010), it appears that the circuit is now in jeopardy of completion—nevermind the ability to host a world championship race.

The work suspension on the circuit is apparently due to a management squabble involving promoter Tavo Hellmund and his Full Throttle Productions company, and the owners/investors of the Circuit of the Americas (COTA), led by billionaire Red McCombs and Robert Epstein of the investment firm Prophet Capital Management, Ltd. According to press reports from CultureMap Houston, a disagreement between COTA and Hellmund has resulted in the money behind COTA’s construction (owners/investors) attempting to buy out Hellmund from the F1 contract. The problem is that Hellmund and Full Throttle Productions were the ones with whom F1 supremo Bernie Ecclestone negotiated the contract—not COTA.

Hellmund and Ecclestone have known each other for more than 30 years. Hellmund spent a good amount of time during the ‘80s working in Europe for Ecclestone’s Brabham F1 team, the period when Nelson Piquet won two World F1 Drivers Championships for the team. So it’s fair to say that Ecclestone would be on Hellmund’s side in any dispute. Thus, COTA’s requests for the contract to guarantee them that the F1 race would indeed happen have fallen on deaf ears.







Reports of a work slowdown during the on-going construction of the facility during the summer ignited yet more rumors of trouble on the horizon. Although all the parties involved denied that anything was wrong, and explanations such as “scheduled work was completed, crews are waiting for next start date” rung as hollow as a petrified steer skull, it was a signal that the big money behind COTA was beginning to sour on the deal.

Adding fuel to the increasingly smoldering rumors was Hellmund’s query to the Texas State Comptroller’s Office regarding the state government’s position on the $25 million in state METF (Major Events Trust Fund) money that was promised annually for the duration of the 10-year contract if there was a management change. The METF is a huge slush fund earmarked for assistance with “major sporting events” (NFL Super Bowl, World Series, etc.) that would result in a huge windfall in local retail and tax revenue. When state comptroller Susan Combs replied that a management change wouldn’t nullify the METF funds, Hellmund’s negotiating power was significantly reduced, further backing him into a corner and prolonging the stalemate.

This resulted in the application for the METF funds being withdrawn back in September. Combs released a statement citing that 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.” Combs was a fervent supporter of the COTA F1 deal, and worked to keep the METF funds earmarked for the race despite coming under fire politically for using the money to assist in bringing the race to Austin. Now it appears she’s changed her stance on helping the circuit, even if a new application for the funds is submitted.

“Let me state clearly: We have not paid out any money for the Formula 1 event,” the statement continues. “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.”

Thus, if the Formula One contract never gets signed between COTA and Ecclestone, the chances of the circuit being completed—and the MotoGP races that were slated to be held at the facility starting in 2013—are basically slim and none.





Read more: http://www.sportrider.com/news/146_1...#ixzz1e3e46GDL
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November 18th, 2011, 06:56 AM   #2
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For the record, i had said back then and i'll repeat it here, i'll believe it when i see it.
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November 18th, 2011, 07:14 AM   #3
 
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The poison dwarf (Bernie) was on tv the other day saying he doubted the Texas 2012 F1 was going to happen. He said they were going to do all they can to make it happen but it looked unlikely.

We have another year to get things sorted for our sport so keep your fingers crossed.
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November 18th, 2011, 10:56 AM   #4
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Good on her for demanding the event stand on its on feet. A small percentage of the population are actual race fans that could care less if the event comes off, if it means them having to subsidize it with tax revenue..
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November 18th, 2011, 11:51 AM   #5
 
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Quote:
Originally Posted by povol View Post
Good on her for demanding the event stand on its on feet. A small percentage of the population are actual race fans that could care less if the event comes off, if it means them having to subsidize it with tax revenue..
But local business and the economy in that city stand to make money. It's not new for tax payers money to be used to stimulate economy through tourism and a major sporting event that brings people from far and wide must be classed as tourism, surley ?
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November 18th, 2011, 12:45 PM   #6
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Quote:
Originally Posted by chopperman View Post
But local business and the economy in that city stand to make money. It's not new for tax payers money to be used to stimulate economy through tourism and a major sporting event that brings people from far and wide must be classed as tourism, surley ?
each application will be reviewed and analyzed for its likely economic impact and only after the race occurs would any funds be disbursed.”



When your own money is riding on the outcome, you tend to do things differently than when your playing with someones else's money. F1 and GP, is not the World Series and Super Bowl here in America. They are a crap shoot at best.
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November 18th, 2011, 01:59 PM   #7
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Quote:
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Good on her for demanding the event stand on its on feet. A small percentage of the population are actual race fans that could care less if the event comes off, if it means them having to subsidize it with tax revenue..


If only....



METF is an extraordinarily complicated economic development plan, and its impact is immeasurable. The economic models they use to show "self-sufficiency" are laughable, and claims of self-sufficiency flirt with outright deception.



The pretend F1 is sustainable by measuring Austin tax revenues now, with Austin tax revenues during the event. The marginal increase in revenues is attributed to F1. What's the problem? Most of the additional tax revenue is generated by Texans who would have spent elsewhere in Texas. Using their METF model, F1 will not even be close to sustainable if you subtracted expenditures by Texas citizens. Why do they use METF? b/c they hope that F1 will make businesses more likely to relocate to Texas. They hope visitors will return for more trips to the hill country. They hope people will choose Texas as an affordable retirement location. Those kinds of economic benefits don't show up on paper so they concoct the insulting self-sufficiency test to justify their riverboat gambling and crony capitalism.



Personally, I don't mind a bit of riverboat gambling with government funds, but there is nothing more miserable than pretending that such speculation is part of a conservative agenda. They are skirting the Constitution and risking millions of taxpayer dollars b/c Texas Republicans believe interstate competition is the key to rehabilitate the entire US. I agree, but the constant political chicanery drives me insane, and it keeps people in the dark about economics. As a behavioral ethos, economics affords more freedom than bipartisan politics; therefore, I would like more people to know about economics.



Regarding the Texas track, I'm not surprised. F1 deals never make sense. It is impossible to organize an orderly trip down the road to perdition.
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November 30th, 2011, 03:42 AM   #8
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Just checked out some computer generated pics of the track. Man I hope this happens, looks like this track could provide thrilling racing like no other track world wide. Except maybe Bathurst but that ain't never gonna happen for moto GP.
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November 30th, 2011, 07:53 AM   #9
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I've not followed the deal as closely as I should, but I heard the track organizers are playing hardball with F1. This track needs to be a success for Texas, and it's not like F1 don't need more presence in the Americas. Anything they can do to avoid a Turkey-scenario is fine with me.



BTW, Pov, my faith in Combs has been somewhat restored. She originally agreed to advance the money by 364 days which was a ridiculous thing to do for a project that is already teetering on the brink of crony capitalism. She has withheld payment until F1 make some concessions.
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November 30th, 2011, 08:16 AM   #10
 
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Quote:
Originally Posted by barbedwirebiker View Post
Just checked out some computer generated pics of the track. Man I hope this happens, looks like this track could provide thrilling racing like no other track world wide. Except maybe Bathurst but that ain't never gonna happen for moto GP.


I have to admit that the long 'S' section looks interesting. Other than that, I don't see what you're seeing. There are way too many chickenshit 1st / 2nd gear corners - typical Tilkedrome / EffWun crap.



Looks like it's a dead duck anyway. Probably for the best, IMO.
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