Formula One on the Brink?
Work stopped while F1 factions feud
Austin's inaugural Formula One race – officially scheduled to take place next fall – may be in peril, as construction on the new Circuit of the Americas track near Elroy has been suspended. Sources close to the matter say that the planning has become a game of brinkmanship between the two firms at the heart of the project.
While outsiders see a single track in development, there are actually two companies involved in the overall project. On one side is Full Throttle Productions LP, under former race car driver and project creator Tavo Hellmund. On the other is the Circuit of the Americas itself, headed up by chief investors Bobby Epstein and Red McCombs. Full Throttle effectively holds the contracts for the race, while COTA owns the track. The two had publicly worked hand in hand, but now they seem divided over finances. On Nov. 15, Epstein announced that construction has halted until COTA has the F1 contract signed, sealed, and delivered. With millions already sunk into the project and three international race series – F1, MotoGP, and V8 Supercars – scheduled for the track, Epstein said, "We have spent tremendous resources preparing for the [races], but the failure to deliver race contracts gives us great concern." Full Throttle fired back that it and the city had done everything possible to start the project and that "it is the responsibility of Circuit of the Americas to bring it across the finish line."
Rumors have circulated for much of the summer about tension at the track site in southeast Travis County, especially after the announcement of another Grand Prix race in the U.S. – to be held in the New York City area, and without any government funding. The first real public sign of trouble came in early November, when the city of Austin announced that it was temporarily suspending discussions about annexing the facility area, currently in the city's extraterritorial jurisdiction. Then, at last weekend's Abu Dhabi Grand Prix, Formula One CEO Bernie Ecclestone reportedly said the first Austin race may not happen in 2012 because the two sides have "forgotten to talk to each other." Initially, that statement was being interpreted by local insiders as the sport's head honcho putting the screws to Epstein on behalf of his old friend Hellmund. However, on Nov. 16, Ecclestone was reported as saying that the current deal with Hellmund is off, meaning a new deal would have to be struck with the circuit; COTA was contacted but declined to comment.
The current dispute reduces the conflict to a fight that is increasingly about private cash. Beyond a commitment to reimburse the developers for building water utilities out to the area, the city has no financial commitment to the track. On Nov. 15, Comptroller Susan Combs made a public statement that her office will "continue to monitor" the situation and that the slowdown – combined with the Oct. 25 announcement of the second U.S.-based F1 event – may endanger any application to the state's Major Events Trust Fund. She also declared that she would not commit those funds (promised at an annual incremental sales tax reimbursement of $25 million for 10 years) prior to an actual race, a shift from earlier suggestions that the state money would be available in advance to prepay the event's sanctioning fee to F1. Off the record, optimistic insiders say they're interpreting Combs' statement as her office applying leverage for McCombs and Epstein.