State set to repay circuit for F1 costs
The proposed agreement — it hasn’t been drafted yet, Fireside told the council — mirrors one between the city, the Circuit Events Local Organizing Committee (a nonprofit affiliated with the track owners) and Circuit of the Americas for November’s inaugural Formula One race. Texas Comptroller Susan Combs this week approved paying $29.3 million to the circuit from the Major Events Trust Fund, a similar state economic development fund used to attract events such as Super Bowls and NCAA basketball Final Four tournaments.
That money was meant to reimburse the circuit for a sanctioning fee to Formula One Management, the Englandbased organizer of the international race series, and for other expenses related to the race. Similarly, circuit lawyer Richard Suttle said, state money is needed again to ensure that MotoGP, V8 Supercars, Amer- ican Le Mans and World Endurance Championships would take place next year.
“It is required to lure an event we might or might not get, absent that,” Suttle told the council.
But Council Member Kathie Tovo, who voted against the initiative Thursday, noted that ticket sales have begun for two of the events and said that during the hour-long discussion, she had received an email solicitation for ticket sales to a third race next year.
“These events will go on no matter what we do today,” Tovo said.
Suttle said an economic study of what tax revenue might be generated by the four races, and thus what would be given to the circuit, “is in its infancy.” But he said the rough estimate is that they would spur an additional $3.5 million to $5 million from the various taxes, including the city’s share of the sales tax that wouldn’t go to race organizers.
Critics at the meeting knocked the last-second nature of the proposal, which was added to the council’s agenda Monday, one minute before the deadline for such changes. And Council Member Laura Morrison, the other “no” vote Thursday, said she was uncomfortable giving city staff the authority to negotiate, draft and sign a document that, because of the last-minute nature of the proposal, doesn’t yet exist.
Fireside said the new agreement would be based on the Formula One deal, which last year went through substantial revisions growing from council debate.
Circuit organizers needed the quick approval, Suttle said, because state law requires such applications for money from the event fund at least four months before the event. The MotoGP race, the first of the four races, is scheduled for April 1921. The council will not meet again until Jan. 17.
Council Member Bill Spelman said if he were a state legislator from Wichita Falls, for instance, he would be “shocked and appalled” at such a deal because it redirects tax revenue that otherwise might be spent across the state.
“I don’t think the state is getting a bargain on this,” he said. But as an Austin City Council member, Spelman said that his interest is the Austin taxpayer, and that because the city keeps its added tax revenue from the event he would vote for the agreement.
“The city was better off with F1 in it,” Spelman said, “than it would have been without F1 in it.”