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Texas finance chief confirms New Jersey race threatens Austin event

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Texas finance chief confirms New Jersey race threatens Austin event
Nov 15, 2011, 9:10 PM

There is a lot going on behind the scenes in Austin, Texas at the moment with threats from all sides that the 2012 Grand Prix might not take place.

There is a lot going on behind the scenes in Austin, Texas at the moment with threats from all sides that the 2012 Grand Prix might not take place.

And this afternoon Susan Combs, who controls the finances for the State of Texas, has confirmed that the recent announcement of a rival race in New Jersey for 2013 is a "concern" and said that the first $25 million the state had earmarked for the project will no longer be available before the first event has taken place.

This is significant, because the deal agreed with Combs was that she would disburse $25 million a year for 10 years, of money raised from taxes on hotels, drinks and restaurants from out of town visitors to the event. Today she said that the first tranche of this money will be payable only after the first event has taken place, if indeed it does.

"When the United States Grand Prix was formally announced, it was the only Formula 1 race scheduled in the U.S. During the past 18 months, organizers have taken many steps to bring high-profile motor racing to Central Texas, including the development of the Circuit of the Americas, and the announcement of the global MotoGP and V8 Supercar race series starting in 2013, " said Combs' 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."

Only a year from its inaugural race, the project is caught up in a dispute between Tavo Hellmund, the promoter who holds the original contract for the race and a group called Circuit of the Americas, which is building the venue outside Austin. Hellmund is stepping back out of the project and there seem to be problems agreeing the terms of that. In turn, CoA want a direct contract with Ecclestone.

Bernie Ecclestone spoke about this a few times over the weekend, saying that he is waiting for the Circuit of the Americas people to send him back the contract and that the ball is in their court. It is not clear whether the terms and fees due are the same or higher than those in the original deal.

Ecclestone says that the first payment of the sanctioning fee for the race is already due and that if things do not progress, he will call the race off in December, presumably via the FIA World Motor Sport Council meeting.

Today the CoA group confirmed that construction work had been halted at the site pending resolution of the contract dispute. The longer this goes on, the harder it will be to hit the circuit delivery deadline if the dispute is resolved.

Eccleston responded by saying that the deadline for the race taking place in 2012 had passed and it would not be able to take place until 2013.

Ecclestone and Hellmund have been friends for many years and after Combs confirmed recently that the State's $25 million would be paid regardless of who managed the race, Hellmund's position was weakened. It could be that this is a tactic to improve his exit position or it could be more serious than that.

Either way the State government is keen to be seen to be ultra careful with Texas tax payers' money and the intervention of Combs today adds a further blow to the project.

Local observers on the website of the Austin Statesman newspaper question whether it was ever the sport's intention to race in Austin and that it was a tactic to get the prize they really wanted, which was the New Jersey race with the Manhattan skyline as a backdrop.

The JA on F1 2011 limited edition collectors' review of the year "Vettel steals the show" is now ready to pre-order. A large format 240 page paperback, it comes out on December 12th, costs £9-99 plus postage and can be sent anywhere in the world. All copies bought through this site are personally signed by James Allen.

To order your copy, click HERE

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