The Year via the Rearview Mirror

As many of us look back on 2011, what stands out as your favorite memory?

From time to time I take a look at what we were writing about on this site at the same time last year. Imagine my surprise to discover it was the aerial photos of the racetrack site, before any construction had begun. From my window seat on a flight into Austin, I was surprised how many times I had flown over the land before and never really noticed it, but honestly, there wasn't too much to stare at in Elroy from an airplane window. However, just a day after our photo release, first signs of work appeared on site as a construction crew met with Tavo Hellmund for a photo-op and official ground-breaking of the site. It wasn't quite the gold shovel event we were hoping it would be, but naysayers and 'boondoggle' speculators were hushed as Tavo showed the world that construction was underway.

Since this announcment, looking back at 2011 has revealed a truth, it's been a fantastic year, both as fans of motorsports and as a team here at AGP, we have constantly been surprised with each of this year's exciting happenings. From early on in the year, the connection we made with Asif Kapadia facilitated the introduction of SENNA at the SXSW film festival, opening up the life of Ayrton Senna for fans and non-fans of motorsports. From my point of view, it truly changed my life, not only seeing the immense technical and competitive war within the sport, but personalities that extended far beyond the track. It opened up the sport to me in a way that even Kevin couldn't explain, and many we talked with as well, were also just so surprised with the way the movie effected them.

Following the SXSW festival, the formal announcment of Circuit of The Americas at the press conference in April came quicker than expected, with the added bonus of MotoGP and growing evidence of major site construction and heavy equipment at the track. The summer's city council meetings along with the MAKE IT HAPPEN campaign we started, helped drive the community to rally to support COTA and the City of Austin to move forward.

During the one month Formula 1 break, the SENNA movie returned to Austin as the hype for Formula 1 grew and getting a chance to speak with viewers of the film just following their experience at Violet Crown Cinema was a real treat. To add icing on the cake, Red Bull Racing and former F1 driver David Coulthard visited Austin for a commercial shoot which roared throught the streets of downtown and the county roads outside. This was a great chance for many to get their first glimpse at an F1 car in person. It was quite a treat and undoubtibly was a great sucess in opening the eyes (and ears) of many curious Austinites.

The final leg of the season segwayed into a downtown watch party location at SIX Lounge, and started a new venue for fans and non-fans to get together and watch, learn, and relax on a Sunday afternoon. Opening up an additional location was critical in our mind to help expand the reach of motorsport to new fans.

As the one year countdown to the innagural race approached, things began to shake up a bit between Bernie Ecclestone and the officals of COTA. Things finally were ironed out just a few weeks later, and on December 7th, the official placement of the Formula 1 race in Austin was secured, along with a revised contract with the officials of COTA and F1. It was an early holiday treat, but a very welcome one as the fate of Austin's race was surely going to effect the fans in the US.

So where are we today? Looking back at this past year and the magnificent things that have happened, it's hard to not be so anxious for 2012 to begin. Only a few hours away and we'll be counting down the days to the first race at COTA and the return of Formula 1 to the U.S. after several years. It should be no surprise that more and more attention will be paid to what's happening here, likely to cause some headaches, but nontheless, we are proud to welcome everything that will be happening in 2012. It's likely to get 300% more exciting, and we at AGP are ready for 2012! Are you?

ALL IN FAVOR, SAY "AYE"

Austin City Council chambers packed with supporters at last Thursday's meeting

The "ayes" have it and the motion is carried.
Austin Approves F1 Project!

The Austin City Council just voted seconds ago to approve the resolutions related to the Agreement between the City of Austin, The Texas Comptroller and the COTA Local Organizing Committee.

Mayor Leffingwell was joined by Council Members Martinez, Riley, Cole and Spelman in approving the measures. Council Members Tovo and Morrison voted in opposition.

As a recap, the measures:

1. Authorized the City Manager to negotiate and execute an Interlocal Agreement with the Texas Comptroller of Public Accounts to: 1) Establish a METF for the F1 US Grand Prix and 2) Set forth the rights and obligations of the parties as required under the METF statute.
2. Authorized the COTA Local Organizing Committee ("CELOC") to act on the city's behalf 1) Establish the parties' authority, rights, and responsibilities with respect to an application to the Texas Comptroller of Public Accounts for creation of a METF in support of the F1 US Grand Prix and 2) establish the parties' authority, rights, and responsibilities with respect to payments to and from the Fund.
3. (Hotel fee waiver ordinance)
4. Discussion and possible action on a term sheet describing environmental standards and expectations regarding the Circuit of the Americas and related parties.

We also enjoyed reading Council Member Bill Spelman's email that he sent in response to all those that emailed him about the F1 vote. He highlights three concerns:

1. There must be no financial risk for the City of Austin or its taxpayers.
2. The City of Austin must be able to terminate all contracts due to non-performance.
3. Circuit of the Americas must meet the sustainability expectations.

You can take a closer look at Mr. Spelman's email by clicking here.

Regarding the sustainibility expectations, The Austin American-Statesman exclusively shared a press release from Council Member Chris Riley's office late yesterday afternoon. Mr. Riley, Council Member Mike Martinez and Austin Mayor Lee Leffingwell all sponsor and support an unprecedented initiative to make Circuit of the Americas a landmark "Green" Formula One facility. This tentative agreement addresses numerous environmental and sustainibility issues. Here are a few points that COTA has tentatively agreed to implement at the one-of-a-kind Circuit of the Americas:

• Provide satellite parking and dedicated lanes for mass transit options
• Build structures to Austin Energy Green Building standards
• Invest in on-site renewable energy
• Embrace aggressive recycling and composting practices
• Invest in local carbon offsets, such as tree plantings and land conservation
• Buy into Austin Energy’s Green Choice program
• Dedicate land for a community garden
• Partner with other organizations, such as Austin Technology Incubator, to support on-site green technology and research and development projects
• Coordinate with local educational institutions such as UT, Texas State , Huston-Tillotson, and Texas A&M to do green racing and transportation research
• Host alternative energy and energy efficient car races, in addition to cycling and foot races

Thanks EVERYONE for your help, tweets, comments, posts; YOU truly helped MAKE IT HAPPEN!

Austin, MAKE IT HAPPEN! from The Austin Grand Prix on Vimeo.

More THANK YOUs to everyone who has ever watched and participated in the past five (yes 5) Austin City Council meetings regarding F1 since November of last year.

Your first beer at the inaugural F1 race at Circuit of the Americas
in 2012 is ON US!

Cheers :)

METF, ETF, SpETF, MSRTF - WTF?

Tomorrow, Wednesday, June 29^th, the Austin City Council will hopefully decide if the city should sponsor the Circuit of the Americas (COTA) request for a 10-year $25M sales tax rebate from the Texas Major Events Trust Fund (METF).  Normally a sponsoring entity like a city or county would commit up front their anticipated share of the sales tax gain, estimated at approximately $4M for Austin, but in this case the F1 event organizers have even committed to put up the $4M for the next 10 years, so there is basically no risk for the city of Austin taxpayers (as frequently repeated by COTA's attorney of record, Richard Suttle).

Events by Category (Click to Enlarge)

I’m not going to debate whether or not this state fund should exist, but I do think it’s important that all Texas taxpayers, and others, be aware of what it is and why it exists.  The Texas legislature created this “series” of funds (METF, ETF, SpETF, & MSRTF) to be funded by incremental sales and use tax proceeds derived from hosting major events within Texas, and yes, many other states/municipalities have similar funds to lure major events to their area, this is nothing new.  It’s actually very similar to the tax abatements offered to companies that decide to locate or re-locate their businesses to a particular city based on the overall positive economic and employment impact on the area. Think Southwestern Bell (SWB) relocating to San Antonio from St. Louis, and then SWB buying AT&T moving to Dallas, etc.  In many cases, cities actually “invest” in the development of the hosting facility itself, for example Arlington, TX contributing $325M towards the construction of the new $1.2B Cowboys Stadium (Dallas Morning News July 11, 2010).

Events by Location (Click to Enlarge)

Despite the rumors and false statements circulating that this money takes away funds from education or other state programs, which by law is impossible, these funds are designed to be self-supporting due to the anticipated incremental revenue the state receives from additional sales taxes collected during these events.  However, I do concede that if these funds did not exist, and if the events came to Texas without the “subsidy,” then that additional revenue would be available for other public funding.  But if that was the case, how many of these large events would have decided to go somewhere else where some type public funding is available?  This the primary reason these funds exist, and if the opponents are successful in eliminating these rebates for F1, then in fairness, all METF/ETF funding should be revoked, which only the state legislature can enact at this point in time.  And before you cry about the $25M for 10 years, please understand that the only “apples to apples” comparison with other METF events is the Super Bowl, which received $31M in funding last year.  This is because it shares similar attributes with F1 as the only class of event that draws tens of thousands of visitors from outside the state of Texas, and many internationally.  Remember, the key word is “incremental” revenue to the city and state.

Funding by Category (Click To Enlarge)Therefore, the real question is why would anyone oppose this funding?  I suspect if the request involved hosting the BCS Championship Bowl series at Texas Stadium for the next 10 years, not many Austinites would even bat an eye; in fact, most would bend over backwards in support.  Or if it was NASCAR or Indy Cars or the NCAA Final Four, most of the opposition wouldn’t exist.  Formula 1 and MotoGP, for that matter, are lesser known events to many folks in the U.S., and the “trial” street F1 races in Dallas, Detroit, and Los Angeles were simply one-time races on temporary street circuits.  Yes, F1 was successful at Watkins Glen, NY for twenty consecutive years and at Indianapolis Motor Speedway from 2000-2007, despite negotiations and conflict over the effective promotion of the sport, in 2008, both F1 and Indy mutually agreed to terminate their contract; that’s just business, as Trump would say.

Funding by Location (Click to Enlarge)

In an effort to give you an appreciation for the proliferation of how these funds are used, and for what types of events, I have provided this Comptroller document that lists the actual or anticipated approved expenditures since the fund creation in FY04, through FY11 (to date).  I created summary pie charts for those who are too busy to look at the data (although I highly recommend it, after all, the devil is in the details).  Please take note of a few interesting observations derived from this list.  How many of these events are organized for the benefit of private enterprise?  How many are medical group related?  How many are horse/livestock shows? NCAA or other special interest events?  Almost all of them.  Now how many were held in Austin?  Houston, Dallas/Fort Worth, San Antonio?  Maybe Austin should take a few lessons from their neighbors to the southwest; they obviously know how to "work the system.”  Bottom line if you want to debate the effectiveness or use of these funds, you should call your State Representative or Senator, not oppose the efforts to bring these events to the Austin area which will only strengthen the local economy and provide needed jobs for many.   

Formula One is the pinnacle of motorsports worldwide and it draws the attention of 600 million television viewers each year!  This is where the money is!  Only the Olympics and World Cup Soccer draw more fans, and they only occur every 4 years.  If you would have attended the Canadian Grand Prix in Montreal, as we did a few weeks back, I guarantee you would have a much greater appreciation for the economic impact of these events.  As an alternative, read about why local Montreal businesses and residents alike petitioned the city of Montreal to re-instate the race after a two-year hiatus attributed to similar questions regarding the high cost of F1 sanction fees.  It is just business; but that’s what sustains life as we know it.

If you’re still not convinced, read Will Buxton’s letter from last week to the Austin City Council again.  Or just imagine what the INTERNATIONAL television exposure could mean to Austin businesses, especially to companies like Dell, AMD, and many others that desire to expand their business globally.