City Hall Hustle: Skid Marks on the Dais

When the smoke cleared yesterday, Formula One was in the winners circle.

By an initially uncertain but finally unsurprising margin, City Council approved, on a 5-2 vote, a suite of F1-related items at its special called meeting Wednesday, June 29: 1) opening up the state's Major Events Trust Fund sponsoring the event, 2) naming Circuit of the Americas track promoters the local organizing committee (CELOC, or Circuit Events Local Organizing Committee) that would pitch in the $4 million required to trigger the state's $25 million contribution, and 3) discussing an item from Council Member Chris Riley adopting a "term sheet" of environmental standards for the track. (The F1 vote followed an almost equally contentious decision to enable fee waivers for a new Congress Avenue convention hotel; for that report, see "Tovo Takes Up (White) Lodging.") With the large crowd predictably polarized over the project, few paid heed to Mayor Lee Leffingwell's somewhat hapless suggestion – floated by Laura Morrison during last week's debate – that speakers restrict themselves to discussing the actual contracts, not the merits or drawbacks of the event itself. Parsing the contract language line by line (as she did at the previous council meeting) was Liveable City board vice chair (and wife of Chronicle Publisher Nick Barbaro) Susan Moffat. Of several concerns she raised, the primary one was a lack of "enforceable financial assurances for the city ... to ensure CELOC's commitment to cover the city's tax increment for the length of the contract. ... The city does not have a viable recourse if CELOC defaults on the contract," Moffat said, though city attorneys claimed that in such a case, the city would not be liable.

Midway through the afternoon, Bill Spelman seemed to hit on a solution to that hypothetical, directing staff to add contract language making the Circuit of the Americas team additional guarantors of the $4 million, in what he called the "extremely unlikely" event that CELOC flakes and Texas Comptroller Susan Combs comes to Austin for the money. Similarly finessed were Riley's environmental terms, which received a thorough layout from Chief Sustainability Officer Lucia Athens, among the negotiators, though they were not included in the actual contracts.

Last Week's Turn

The down-to-the-wire finish was no surprise, considering the twists and turns in council's F1 discussion last Thursday. Follow­ing hours of impassioned testimony, lawyerly parsing from the dais, and more City Council "discomfort" with the deal than a hemorrhoid commercial casting call, council had postponed action on tapping into the state's trust fund.

Leading the public opposition to making the decision that day was Moffat. "This is not about whether you love racing or you don't," Moffat said. "It's about whether this is an appropriate expenditure of a large amount of public funds over a long period of time to prop up a single private, for-profit enterprise, and it's about whether we have had enough time to actually understand the contracts that we are signing." Moffat cited several problems with the draft contracts – down-the-road liabilities for the city hidden in the verbal underbrush.

Considering the contracts hadn't yet been finalized, it's hard to see how postponement wasn't in the city's best interest. But as Spelman put it to F1 attorney Richard Suttle: "Some of those people are never going to be reconciled to a race. They're just plain against the race, and some of them are stalling for time." Indeed, the obstructionist view was on display from Austin Sierra Club Vice Chair Roy Waley, whose organization declined to co-sign a letter of recommendations from fellow greenies Environ­ment Texas, Environ­mental Defense Fund, and Public Citizen, since, as he put it: "We just disagree that this event can be greened in any way. You can't greenwash it. Putting curly fluorescent lightbulbs in the low-flush toilet bathrooms does not green up one, and nothing will."

Equally unhelpful was the somewhat hilarious prediction of doom from Suttle that any delay could kibosh the entire multimillion-dollar deal ... by interfering with the local F1 crew's Fourth of July plans. (For a quarter-billion dollars, I think I could work around my weenie roast.) Ultimately, only Leffingwell agreed with Suttle's dire prediction, announcing that he would vote against the delay. "I think it is fraught with risk," he said. "This potentially could kill this deal for the city of Austin. I think we've already created a great deal of uncertainty. We've had deliberations on this and gone into the fine details of legal contracts to a degree in my experience unprecedented on this council." Fraught or not, Morrison's motion to delay passed 6-1, Leffingwell the only nay.

This Week's Finish

Fast-forward to Wednesday's special called meeting. Morri­son and the newly elected Kathie Tovo were always solid "no" votes, with City Hall scuttlebutt putting their seeming allies – Spelman and new Mayor Pro Tem Sheryl Cole – as potential swing votes. However, the quartet that had partied together over Tovo's election victory parted ways on their first big vote, with Spelman and Cole siding with Riley, Martinez, and Leffingwell. Riley even deployed the "better inside the tent pissing out" logic: that the deal gives the city leverage over the development – leverage that would have vaporized if another entity, like Elroy, Travis County, or even San Antonio, had signed up as sponsor. How much traction that argument gains with the anti-racing lobby remains to be seen.

---

Additional reporting by Richard Whittaker. Follow the pace car at www.twitter.com/cityhallhustle.