Bernie Ecclestone will be getting his government money, as he always likes.
The Austin American-Statesman is reporting that the first year’s sanctioning fee, a cool $25 million, will come from that state “trust fund” that got plenty of mention during the initial round of stories on the surprise USGP pick.
Contrary to earlier assertions, Texas taxpayers are putting up the first $25 million in a deal aimed at luring Formula One racing to Austin.
And the money, to be deposited in the state’s Major Event Trust Fund, would pay the sanctioning fee London-based Formula One Group charges for the privilege of hosting the first of 10 annual F1 races planned for Austin beginning in 2012. Austin resident Tavo Hellmund would organize and promote the races.
Last week, state officials said money from the fund would not go to the promoter but to local governments to reimburse them for costs incurred in hosting such large sporting events. Previously, the fund, which has been used to cover costs associated with hosting the Super Bowl and baseball and basketball all-star games, has been generated from sales taxes and other tax receipts in host communities that are attributable to spending at the event.
Starting in the second year of the contract, proceeds from extra tax revenue attributable to the previous year’s event would cover the fee. In theory, in the final year of the 10-year contract with Formula One, the state would be repaid the initial $25 million seed money.
State officials stressed that the money is an investment that will be more than returned to taxpayers in the millions of dollars that would flow back to Texas when several hundred thousand race fans flock to Austin for three days to watch the event.
“I’m just thrilled that (Hellmund) is trying to do this,” Texas Comptroller Susan Combs said Tuesday. “It’s going to be wonderful for the state. If folks in Malaysia and Turkey start thinking about Texas in ways not previously thought and want to invest here and come here because of this, that’s a wonderful development.”
I know what you’re expecting me to say, and, well, I can’t deny you:
Hey, Texas, are you new to F1?
Do any of us think that Texas, Austin or whichever county the race ends up in (if it ends up there at all) will actually make money off this venture? Did they check into Silverstone, Spa, etc.?
Not to go all “Star Wars” on you but, I’ve got a bad feeling about this.
On the plus side, I’m absolutely in love with the last quote from the comptroller. Malaysia and Turkey, huh? That’s definitely the “bounce” Texas needs.
In the additional-bad-feeling-about-this department, there’s also this tidbit, which seems to be a setback in how far advanced the planning for this race seemed to be:
Hellmund has said he already has secured a site for a new racetrack, most likely east of Austin-Bergstrom International Airport, but he has declined to reveal the precise location. Planners for the City of Austin, as well as Travis and Bastrop counties, said they have yet to receive any filings related to a racetrack.
For those not amused by the Star Wars reference, I’ll go with Hitchhiker’s Guide for you: Don’t panic!
(I’m kidding. I think we should be panicking.)
I suppose the one saving grace… at least right now… is that private money is still supposed to pay for construction of the facility. But do you think that might change?