Formula 1 Facility Construction to Have Substantial Economic Impact on the Region
Study Releases Benefits of World-Class Venue on Local and State-Wide Economy
Austin, Texas 0x2212 February 1, 2011 -- A recent study conducted by Dr. Don Hoyte, principal of TexasEconomicImpact.com, determined that construction of the Formula 1 United States Grand Prix track will have an enormously positive economic impact on the local Austin area, as well as on the state-wide economy. The proposed facility is expected to significantly increase direct and indirect sales activity, consumption-based tax gains and construction related jobs.
Through rigorous, objective economic analysis, Dr. Hoyte determined that the Formula 1 track facility construction is expected to increase sales activity in Texas from approximately $11.4 million in 2010 to a peak of $255 million in 2011 before leveling off to $132 million as construction activity winds down in 2012. Overall, state-wide economic activity is expected to increase by approximately $400 million during construction.
Due to the demanding construction schedule, 2011 will serve as the peak construction year. During 2011, the project is expected to spend approximately $144.9 million, of which more than $68.4 million would represent wages injected into the Austin area economy. These wages could be earned by as many as 1,320 local workers. In regards to the increase in jobs across the state, Dr. Hoyte determined that direct expenditures in the peak year could exceed $146 million leading to as many as 1,330 new jobs. The incredible influx of potential new jobs during peak construction year alone could potentially drop the unemployment rate in the Austin metro area from 7.3 to 7.1 percent.
In addition to job, wage and sales gains expected to occur, the state of Texas will experience a considerable increase in tax gains. In particular, activity-based taxes, such as sales and hotel occupancy tax, will generate revenues directly related to construction. During the 18-month construction period, gains in state and local sales and hotel taxes should exceed $6.5 million.
"In coming on board we knew this project would be a world-class facility that will draw visitors to the area from all over the globe," said William McAdoo, senior vice president and general partner of Austin Commercial, the general contractor selected for the project. "This study reinforces what our team is so looking forward to experiencing through this process. It will be an economic transformation for Austin and for Texas, unlike any that the area has ever experienced."
According to Dr. Hoyte's study, the proposed facility is expected to cost between $215 and $242 million. With construction expected to conclude by mid-2012, time is certainly of the essence. Formula 1 facilities worldwide are built specifically for the rigors of the sport, and many new recent facilities have been completed in less than 18 months. Formula 1 has undergone international transformation during the last three decades, from the more vigorous construction of purpose-built tracks to the sport's increasing global popularity.
"While we have heard some concern over our accelerated construction schedule, we have continued to stay on track," said Tavo Hellmund, chairman of the Formula 1 United States Grand Prix. "The Shanghai Circuit was completed in less than 18 months, Bahrain in less than 16 months. We understand the impact that this will have on Austin as well as the state of Texas, and we are looking forward to the first race in 2012."