Jun 27, 2011
It seems that staging a successful Formula 1 race in the United States is more challenging than snuffing out Osama bin Laden. Officials of the greenfield track outside of Austin, Texas -- a track that was founded largely on the premise that it would host a revived version of the U.S. Grand Prix -- have made significant progress in persuading Formula 1 organizers to grant them a tentative date for the inaugural race in 2012 and wangling some economic incentives from the state of Texas. But now question marks have popped up after a taxpayer group has sued Texas Comptroller Susan Combs in an effort to prevent tax money from supporting the race.
The lawsuit filed in district court in Travis County, Texas, doesn’t claim that the proposed subsidy was illegal, but instead claims Combs authorized it too soon. Texas has an economic incentive program designed to attract big events that will generate tourism dollars for the state, and Combs authorized $25 million from that fund to support the F1 race. The premise of the program is that the subsidies are seed money that will grow business, create sales tax revenues and thus be essentially self-liquidating, but the taxpayer group questions the economic benefit of the potential race. The comptroller’s office estimates that the race would create a $287 million increase in economic activity in the Austin area. The group behind the lawsuit says that is pie in the sky.
The lawsuit also makes two other charges: It asserts that letters Combs wrote to race organizers and F1 officials certifying the $25 million subsidy were written in violation of the statute that requires the state to not make payment until the event is less than a year off. It also says there was no competitive bidding involved in the process. Formula 1 has put the Austin venue on its 2012 race calendar with June 17 as the date, but all the dates on the calendar are tentative until it makes its final decisions on venues and dates in September.
The Austin F1 race might happen yet, but this latest setback is just one of many in the star-crossed efforts to stage a viable U.S. Grand Prix. After years running at Watkins Glen, N.Y., Formula 1 found a reliable haven in Long Beach, Calif., until escalating sanctioning fees ended that relationship. After Long Beach, there has been nothing but chaos and disaster as Las Vegas and Phoenix both tried to host F1 races that ended in failure. It looked as if F1 might have finally found a proper home when it entered into an agreement with the Indianapolis Motor Speedway, arguably the most famous racecourse in the world, but that eventually ended dismally as well. Now Texas is trying its hand. We’ll see if the Lone Star State can succeed where so many others have failed.
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