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COTA to seek millions in additional Texas Taxpayer Funding for MotoGP,


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COTA to seek millions in additional Texas Taxpayer Funding for MotoGP, X Games: https://shar.es/1cM13Z

 

More incentives sought for Circuit of the Americas for XGames, MotoGP

Posted: 6:29 p.m. Monday, Dec. 7, 2015

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By Marty Toohey - American-Statesman Staff



Circuit of the Americas’ tax incentives are once again in the Austin City Council’s lap.

Officials affiliated with the track want to apply for what could be a few million dollars more in state incentives, as a concession for the expense of hosting the MotoGP race and Summer X Games. Earlier this year, state lawmakers endorsed that idea, as long as Circuit of the Americas proves the events are delivering the promised boost to the state economy.

+jwj-2015-X-Games-2500055.jpgJAY JANNER
Tom Schaar takes off from the top off the Big Air ramp at the Summer X Games at Circuit of the ... Read More

But the City Council also has to give its blessing before the incentive application can go forward, according to the city’s economic development office, and that vote is scheduled for Thursday. The agenda posting has generated little buzz at City Hall, but some are hoping the council will revisit the tax incentive issue.

“This is not an appropriate use of taxpayer dollars,” said Council Member Don Zimmerman, a longtime critic of the track’s incentive deals with the state. Zimmerman said that though the money comes from state coffers, not the city’s, “It’s all public money we’re talking about, and I don’t think we should lose sight of that.”

Jason Stanford, a spokesman for Mayor Steve Adler, countered that authorizing the application “doesn’t cost a dime of Austin taxpayer money.”

+jwj-MotoGP-Red-Bull-Grand-Prix-of-the-AmJAY JANNER
Niccolo Antonelli, left, and Ana Carrasco practice in April at the MotoGP Red Bull Grand Prix of the Americas at Circuit ... Read More

“The basic fact is that these two events bring in a great deal of money for the city of Austin,” Stanford said. “This is an easy yes.” (The measure seems likely to pass; Adler will be out of town Thursday but has not requested the vote be postponed so that he can vote.)

The council’s discussion comes as the track’s finances have been making international news, and the additional money could buffer recent cutbacks the state made in its incentive package.

In November, the American-Statesman reported that Gov. Greg Abbott’s administration had decided to reduce the incentive payments to the track for the Formula One race from the roughly $25 million a year state officials had promised to less than $20 million. The governor’s office determined that the F1 race was less beneficial to the state economy than previously believed.

The reduced payments led Circuit of the Americas Chairman Bobby Epstein and F1 CEO Bernie Ecclestone to declare the future of Austin’s F1 race in jeopardy.

If the race were canceled, one of Austin’s most prominent civic features would be without the event (and revenue) for which it was built. The possibility prompted an outpouring on social media in favor of the track, with the #SaveCOTA Twitter hashtag.

In the matter coming to the council this week, track officials want additional incentives from the state’s Major Events Reimbursement Fund, one of Texas’ most high-profile economic development programs. It arranges to pay organizers of large events — the Super Bowl and NCAA Tournament basketball games, for example — a portion of sales, hotel, car rental and alcohol tax revenue generated by out-of-state spectators.

That is the pot from which the F1 money comes. Track officials hope to get more money from it for hosting the MotoGP race and the Summer X Games.

But to be eligible for payments, organizers need explicit permission from state lawmakers to apply for a specific event and an endorsement from a local government.

Lawmakers provided that permission in the spring for both MotoGP and the X Games. That done, a “local organizing committee,” formed in 2012 to work on behalf of the city, can make its case to Abbott that the events have generated economic activity worthy of funding.

It is not clear how much money is at stake. Circuit of the Americas has been receiving payments from a different economic development program, the Events Trust Fund, for the X Games and MotoGP. But that is designed for smaller events and comes with lower incentives. The chairman of the city’s local organizing committee, Wayne Hollingsworth, did not respond to calls and emails requesting comment.

Applying to that fund, the circuit received $1.1 million in state incentives for the 2014 X Games,according to city documents. Local organizers hope that by going through the major events program, they can secure $2.3 million for this year’s event — more than double what the smaller fund provided — according to an application filed with the state.

The track would get one payment for the event per year, either from the larger fund or the smaller one.

In the X Games case, that application is possible because the City Council in May endorsed it. But that was a one-year arrangement; the council would still have to approve applications for the 2016 and 2017 X Games.

No MotoGP application is eligible for the major events program until the council votes its approval. Local officials have already applied for $900,000 from the lesser program, in case the council does not grant that approval, according to the governor’s office.

An application to the larger trust fund has yet to be filed for the MotoGP event, a spokesperson at the governor’s office said, but “hypothetically speaking, there is a potential for more funding” if the required economic impact study backs it.

STATE FUNDING

Officials working on behalf of Circuit of the Americas are hoping to tap Texas’ Major Events Reimbursement Program for additional funding, in exchange for the cost of hosting the Summer X Games and MotoGP. This is how much in state money those events have generated from the less prominent Events Trust Fund:

• 2013 MotoGP: $1.7 million

• 2014 MotoGP: $1.7 million

• 2014 X Games: $1.1 million

• 2015 MotoGP: $906,000*

Local officials are applying for $2.3 million for the 2015 XGames from the Major Events Reimbursement Program.

*Application pending, to be withdrawn if the state grants a larger request for Major Events Reimbursement Program money

What we reported

The American-Statesman has reported extensively on the financial incentives and economic challenges for Circuit of the Americas, including coverage last month about Gov. Greg Abbott’s officereducing the payment for this year’s Formula One race and an in-depth look last year at the reasons tracks often sell for less than they cost to build.

What we reported

The American-Statesman has reported extensively on the financial incentives and economic challenges for Circuit of the Americas, including coverage last month about Gov. Greg Abbott’s officereducing the payment for this year’s Formula One race and an in-depth look last year at the reasons tracks often sell for less than they cost to build.

 

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