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Circuit of the Americas gets another $29 million state subsidy


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http://www.statesman.com/news/news/local/circuit-of-the-americas-receives-29-million-in-sta/nc84z/

 

Sorry, it's behind the Statesman's paywall, but you get the idea...

 

FWIW, we heard some time back that the comptroller paid COTA these funds weeks ago, shortly after the USGP. Don't know why it's just now going public.

 

 



 

Circuit of the Americas receives $29 million in state funds for Formula 1

The state comptroller’s office this week paid Circuit of the Americas about $29 million from the Major Events Trust Fund for November’s Formula One race.

That’s down slightly from what Susan Combs’ office paid out for the 2012 inaugural race and slightly less than what organizers had requested.

This story continues on our new premium website for subscribers, MyStatesman.com. ...

 

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I was thinking about it a little more, and that makes more than $62 Million in state subsidies that COTA has received from the METF for 2 USGPs, 1 Moto GP race, 1 V8SC, 1 ALMS race, & 1 WEC race. They applied for & got paid for WEC & ALMS separately even though the events were held concurrently on the same racing weekend.
You can read the whole article here:

 


...The payment, made on Monday, is based in large part on an estimate of the expected tax revenue brought in by out-of-state fans for the race.
The circuit’s economic impact report, submitted months before the race and the basis of the request for state money, assumed attendance on race day would be 120,000, with 68,000 coming from outside of Texas. Race-day attendance turned out to be about 113,000, but circuit officials after the race told the comptroller’s office that 73,000 were from out of state.
The Circuit Events Local Organizing Committee applied for $32.4 million in September. The application included the economic impact report that estimated attendance, spending on hotel rooms, food, drinks, merchandise and more.
Most of the money, about $23 million, will be used to pay a sanctioning fee to Formula One Management for the rights to host the race.
The rest will cover other expenses such as rental and management of temporary bleachers and seats, staffing and managing shuttle buses and temporary off-site parking.
State incentives paid to the circuit have been a divisive issue in the four years since Formula One officials announced Austin as a race site. Critics have claimed that state money should not go toward a private event while supporters say it helped bring the race, international recognition and millions of dollars to the city.
The Major Events Trust Fund has been used to attract large events, including the Super Bowl and NCAA basketball Final Four.
To qualify for the fund, organizers must prove that their event will generate at least the same amount of money in “extra” sales, alcohol, hotel and car rental taxes. Generally, economic impact studies arrive at that by counting the anticipated number of out-of-state attendees. Then, using past large event surveys as a guide, the studies estimate how much money each fan will spend on lodging, food and alcohol and then multiply that figure by the tax rate to arrive at the state’s take.
The comptroller’s office then pays the money after the event and by law must produce a post-event analysis within 10 months that compares estimates with attendance figures.
“If the actual attendance figures are significantly lower than the estimated attendance numbers, the comptroller may reduce the amount of a disbursement for an endorsing entity under the Major Events Trust Fund in proportion to the discrepancy,” the law states.
However, the law allows the comptroller’s office to determine what is considered significant, which is still being determined, comptroller’s office spokeswoman Lauren Willis said.
Don Hoyte, who has authored each economic impact report submitted on behalf of Circuit of the Americas, said it’s next to impossible to precisely calculate how much each visitor spent while in the Austin area.
“Some people expect that we will be able to tell down to the last human being that showed up exactly where they came from and how long they stayed in Austin and down to the penny what they spent. Nobody knows that. Nobody will ever know that,” said Hoyte, a former economist for the comptroller’s office who now runs a company that produces economic impact studies and advises trust fund applicants on how to secure money through the state program.
Craig Depken, an associate professor of economics at the University of North Carolina-Charlotte who studies the impact of large sporting events on cities, called Hoyte’s report “pretty reasonable,” but he said it doesn’t take into account locals who didn’t shop or eat at restaurants or who went out of town and spent money elsewhere.
“Both would tend to reduce the total impact of the F1 race,” he said.
The comptroller’s post-race analysis of the 2012 event compared fourth-quarter sales tax receipts in the five-county Austin area from 2002 through 2012. By looking at the difference in the fourth quarter of 2012, and taking into account factors such as population growth, the report concluded that the $29.3 million paid to the event was justified.
The comptroller’s office hasn’t yet completed a post-event analysis for November’s race.
“I hope that the impact has every bit met or exceeded expectations,” circuit chairman Bobby Epstein said. “You have to realize that without F1 being the catalyst to build the track we wouldn’t have the X Games, we wouldn’t have a world-class amphitheater and the global awareness that increases tourism to Austin wouldn’t be the same.”
Circuit organizers have applied for state funds for four other races — MotoGP, Australian V8 Supercars, American Le Mans Series and the World Endurance Championships. Those races are eligible for the Event Trust Fund, a fund for smaller events. Although economic impact reports are required to receive those funds, the comptroller’s office is not required to do its own analysis, and therefore has not done so.
...

 

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Our tax dollars hard at work!

Haha, yep. Sigh.

 

With F1, MotoGP, WEC/Tudor, Red Fest, and the X Games, I could see them topping the $100 Million subsidy mark by the end of 2014.

 

I wonder if their doors would even be open now without all that help from the state.

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  • 2 weeks later...

Both WEC and TUSC have COTA on their calendars for September, but COTA's calendar doesn't show them at all. Something weird maybe going on there. Seems almost like COTA's trying to run off all the good racing except F1 & MotoGP. Too bad for all those expensive PSL-holders who were told there would be 5 or more major race weekends per season.

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  • 2 months later...

Reb: I posted elsewhere on the CotA Forum -

The late Dick Conole, owner of Texas World Speedway, would have had a highly successful track if state grant subsidies like CotA receives would have ever been donated to TWS by any governmental body to pay his bills.

In that day the only money that was handled between TWS and the state of Texas and the U.S. Government were plenty of tax payments from Texas World Speedway to the county, College Station, state of Texas and the IRS.

How time has changed everything!


Neil Upchurch
Former Race Director at Texas World Speedway

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Jeff Foxworthy and Circuit of the Americas to Donate 6,000 RedFest Tickets to Central TX Military Members

http://www.musicnewsnashville.com/jeff-foxworthy-circuit-americas-donate-6000-redfest-tickets-central-tx-military-members/

 

I put this in this thread because we've been hearing for some time that RedFest ticket sales have been going very poorly. This, imho, is likely an effort by COTA to boost attendance numbers, trying to justify their METF subsidy. It won't surprise me in the least if they count every one these 6000 tickets as a person who attended (whether they actually do or not), and count them 3 times, as they're 3-day tickets. 18K in attendance from 6K unsold tickets + some good PR to boot. Gotta stay sneaky to keep getting that free cash.

 

 

Circuit of The Americas (COTA) and Jeff Foxworthy are teaming up to give entertainment seekers a fantastic new way to spend Memorial Day weekend in Central Texas through RedFest presented by Natty Light, a celebration of country music, comedy and the great outdoors. A big focus of the entire weekend will be paying tribute to U.S. military members and their families and honoring the sacrifices they’ve made in service of their country.

HONORING THOSE WHO SERVE…

Memorial Day was created to remember the men and women who died serving their country in the U.S. Armed Forces. To recognize those who are still serving today, COTA and team Foxworthy are donating 6,000 three-day tickets to RedFest presented by Natty Light to Texas-based military members and their families based at Camp Mabry in Austin and Fort Hood in Killeen. The tickets donation, valued at approximately $700,000, means thousands of local service personnel and their families can enjoy this massive, three-day holiday celebration of music and all-American activities free of charge.

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