On To Vote Again...

Last night Circuit of the Americas ("COTA") announced that Texas music legends Willie Nelson and Lyle Lovett look forward to performing at The Grand Plaza, the expansive outdoor live music space planned for the world class facility currently under construction. Willie said, "I'm looking forward to playing at the F1 track. Sounds like a great new venue" and Lovett added, "Circuit of The Americas sounds like it will be a world class facility in one of the best places in the world for music.” This reminds me of one of Willie's most famous songs:

Willie Nelson and Sheryl Crow "On the Road Again" live 2007 Crossroads (via MoreSherylCrow)

I chose this specific video so you can get an idea of what a completely packed outdoor live music venue looks like. This show, The 2007 Crossroads Guitar Festival, was on July 28, 2007 at Toyota Park in Bridgeview, Illinois. "Tickets were estimated as sold out for the 28,000 capacity park in 22 minutes" (via Wikipedia). This is just a taste of what we can expect from Lyle, Willie and many other talented musicians at The Grand Plaza at Circuit of the Americas. More details in the Press Release.

Bob Varsha (SPEED TV), Steve Sexton (COTA) and Tavo Hellmund (COTA) discuss the live music venue planned for the facility at the April 14, 2011 Press Conference

Enjoy the tune as you continue to prep for today's Austin City Council meeting, hopefully the last, to proceed with the City of Austin's official endorsement as the sponsoring city for COTA to receive funds from the Texas Major Events Trust Fund. Just like Willie sings in "On the Road Again," we are now "On To Vote Again..."

Here is today's City Council Agenda. Note that there does not appear to be time for Public Comment during today's meeting, so it may move faster than last week's seven hour discusson on F1 topics (!).

Watch it LIVE here: http://www.ci.austin.tx.us/channel6/

Alternatively, listen to the live radio feed here: http://tunein.com/tuner/?StationId=31602&

Just like last week, we will continue to update you throughout the day. The most up-to-date news will be shared in 140 characters via our twitter stream:

http://www.twitter.com/AustinGrandPrix

However, if you'd like to share any last minute comments, feel free to do so on our Facebook page:

http://www.facebook.com/AustinGrandPrix

We are very grateful for the support and feedback we receive from YOU - our fans, friends and followers from around the world. We received some really nice and inspiring messages from everyone after last week's meeting. Thank you for your help to MAKE IT HAPPEN!

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.

American Democrazy

Raise your hand if yesterday was the first time you ever watched a City Council meeting? Now raise your other hand if you don't even live in Austin, Texas?

Yesterday was nothing short of a democracy marathon. We were actively watching the live webcast, listening to the radio feed and tweeting the entire time. Kevin was in attendance and he donated his 3 minutes of speaking in favor of the F1 proposal due to other time constraints.

We thought the Austin City Council did a great job allowing both proponents and opponents to have their voices heard at the meeting, which began at 10:00AM with an exit speech from Council Member Randi Shade, broke for Executive Session at noon, reconvened at about 2:00PM and concluded with a vote at 5:00PM. KUT News reported an unconfirmed number of 243 people signed up to speak in favor of the approval of the F1 agenda items, 26 against and 3 neutrals.

Our Will Buxton Video was broadcast for the Council and in front of the maximum capacity of the Chambers. We immediately started receiving messages from people around the world thanking and congratulating Will on his "presence" at the meeting! Will was watching the Austin City Council meeting via the web from the Valencia Street Circuit, where all the F1 teams, crews, reporters, employees and supporters are located for this weekend's European Grand Prix. It was inspiring to hear from our fans from around the world that they were tuning in to watch this American democratic process unfold.

But while listening to the opponents arguments, we received a message from Will that he had further comments to share. We worked our magic and found another F1 proponent who was willing to read Will's letter at the Council meeting. Thank you Scooter!

Scooter Womack, F1 proponent, reading Will Buxton's email at the June 23, 2011 Austin City Council meeting on behalf of The Austin Grand PrixHere is Will's letter in full:

"As I sit here in the media centre at the Valencia Street Circuit, home of the 2011 European Grand Prix, I and many of my colleagues are hanging on every word coming through to us online of today’s events in Austin, Texas.

There have been some salient points made, but there have been a number of falsities and some scaremongering, which I feel it only correct to address, particularly in light of an ill informed article by Dutch Mandel in AutoWeek, which those who have displayed an argument against the race today, have almost all referenced.

Bernie Ecclestone has become a rich man through his control of Formula 1. Of that there is no question. But this is a man who was almost single handedly responsible for turning this sport from a ragtag operation into the single most watched regular sporting event on earth. Only the Olympic Games and the Soccer World Cup get more viewers globally, and they happen only once every four years. This sport happens every other weekend. If you’d come up with the idea, you’d probably feel you were entitled to a cut, wouldn’t you? Of course you would.

But the anti lobby seems to believe that he and he alone will take the race hosting fee and run away with it. But Bernie Ecclestone, although still in charge of this sport politically, has for a long time not owned this sport. He is a minority shareholder. He is responsible for ensuring that the sport remains profitable for its current owners (a private equity firm)

But that fee doesn’t even go purely into the equity firm’s pocket either. This sport takes the money, divides it between teams to aid with their transport costs year on year, pays out to those who score well in the world championship and races. The sport does not run on breadcrumbs. It never has. It never will. No business can.

It is the highest form of racing spectacle on earth. Last season over 500 million people worldwide watched Formula 1.

Why, as AutoWeek suggests you do, would you wish to run away from that kind of exposure?

It is exposure which national governments have decided is worthy of investment to promote their country and host city for international tourists.

In the case of Austin it has taken individuals and entrepeneurs to take the decision and personal financial risk to build a track that, in most other nations on earth, would have been funded by national governments. Circuit of the Americas are doing this because they have a dream. And this dream is one which can only serve the people and the city of Austin, Texas.

As I sit here in this paddock, I am surrounded by hundreds of fellow journalists. In the paddock beneath me are hundreds of people who work for the Formula 1 teams and put these cars on track. There are hundreds of people working in hospitality. Around the track are hundreds of local people acting in their roles at the circuit, be it promotional, be it trackside, be it operational.

Hundreds of thousands of race fans will attend this race.

Every one of them needs a hotel room. Every one of them needs to eat. Every one of them wants to have a cold beer at the end of the day. And if every one of them has a good time, how likely will they be to return, not just for the race but simply to visit? And how many of their friends would wish to visit the city based on the recommendation of those who have attended?

This is one race. Formula 1 is one circus. MotoGP, Nascar, Indycar. They all operate similar numbers. They all bring an influx of funds to the cities and surrounding area in which they race. Year on year.

Two weeks ago in Montreal, the centre of the town became one big F1 party.  Every shop front carried chequered flags. Every shop was full. Everyone you passed carried bags of purchases. Day after day. Business boomed. As it does, every single year.

Again, to reference the autoweek article, what part of that is something that Austin would wish to run away from?

A ten year promise to pay $25 million a year is by no means a small investment on face value.

But the revenue from those who attend, the exposure that the city will receive, will dwarf the initial outlay.

But that depends on Austin. If the city embraces this sport, if it is welcomed with open arms, Formula 1 will open itself to you.

Make it happen.

This sport cannot wait to return to America. And to its new home, in Austin, Texas."

The outcome of the meeting was a 6-1 vote in favor of postponing the decision of the Austin City Council to vote on Agenda Items 20, 21 and 101. That will take place next Wednesday, June 23. The City of Austin has created a Formula One page which includes in-depth materials related to the matter. You can access the page here.

Thank you to all our fans. It is truly amazing to hear from people around the world, telling us that they have never been to a city council meeting, nonetheless in a city they don't even live in. We even got a message that a fan in Dubai was glued to their computer until 11:00PM watching the webcast. Amazing.

More info to come about next week's City Council meeting. Please share your thoughts in the Comments section below or on our Facebook page.

Thank you and MAKE IT HAPPEN!