COTA Austin - construction and infrastructure

[hairy_scotsman]

Xcuse my ignorance here, but how does this work, is MotoGP issuing "rights" to one certain individual for every race and if so, what happens if said individual cannot deliver? What if he doesn't have money to promote it, or worse, no track to race on?

Then they declare the individual in breach of contract and write a new one with someone who maybe does have a track.

I don't know how this Schwantz guy is involved, but it sounds like he's attached to Helmund and possibly has some money in the deal or at least has a dream of riches that will be dashed if Tavo isn't able to sell out to CotA.

So, he writes this mildly threatening letter and leaks it to the press. We've seen a lot of that from Tavo's side of all this, haven't we? Leaked letters, sob-story law suits, puppy faced press conferences. At least it's entertaining.

Or maybe the guy with the rights takes the race to a different track.

at the bolded part. Seriously.

[Pup]

Seriously you ask? How many old F1 drivers with opinions for sale are worth listening to?

Or maybe the guy with the rights takes the race to a different track.

Unless the rights are also restricted to a specific venue, or at least region, which they no doubt are.

[hairy_scotsman]

Seriously you ask? How many old F1 drivers with opinions for sale are worth listening to?

Or maybe the guy with the rights takes the race to a different track.

Unless the rights are also attached to a venue, or region, which they probably are.

Nice try.

...and I didn't ask.

[Pup]

Well, there are two other races in the US already, so it's not like they're going to let him run another race too near those. And certainly they retain the right of approval for tracks and dates.

You make it sound like an easy thing to just take the event to another track. Not so easy, I suspect.

[hairy_scotsman]

You make it sound like an easy thing to just take the event to another track.

No I didn't.

I can see this topic has hit a nerve with you. Sorry.

[WhiteBlue]

Pup
Many of the points you are making are not dealing with the case. Whether Comb was authorized or not to give a letter of intend or was within her authority or discretion is a matter of disputed (legal) opinion. The right and wrongs of this would have to be determined before a court if the case wasn't already closed in reality. So your speculation and those of her political opponents will probably never be put to a test. Hence anybodies opinion isn't worth the paper it is printed on. But let's have a look at the substance matter.

A letter of intend is a conditional legal document that becomes binding upon the fulfilment of all conditions. We do know that the letter under discussion here was prohibited to become binding by the actions of Epstein & Co. Nobody at this point has demonstrated that the necessary application by Travis County or by Austin City Council has not been a condition to the letter. So we can assume that Comb knew the law or the statutes and inserted the proper conditions to make it legal and binding. On the other hand we do know that COTA negotiated with Austin and Travis county and received conditions for such an application to be made. The required payment of $4m to Travis county is prove of such negotiations having taken place. Unfortunately COTA did not meet that condition. Comptroller Comb is quite right in saying retrospectively that the letter never reached a binding legal status. But that doesn't mean it wasn't on track to be turned into a binding legal contract in spring and summer 2011. There is sufficient evidence to assume that Comb never overstepped her authority like her political opponents are asserting. Nobody can prove that she ever committed the state to a payment that violated the statutes because according to my knowledge nobody has a copy of that letter of intend. Perhaps the court will shed light on this issue. Until then we can all have our various assumptions.

Equally contrary to all your posting there is not one word in the statutes that an application has to be made each year. The statutes simply say that the economic impact has to be demonstrated each subsequent year by using the receipts of the previous year which is a simple enough condition that can be met with relative ease. The minimum impact is 15m and the estimated impact was 25m. With proper management the business plan would easily reach such a minimum target. If not the whole idea would have been a non starter. Hellmund and those defending him on this board have never asserted that the $250m were granted unconditionally. All I'm saying is that all things going to plan the necessary conditions could have been met with relative ease until the investors screwed up the plan by not providing working capital according to the company schedule.

Btw. where have I ever said that the investors would not be eligible to METF funding in the future. I have simply said that they would not be eligible for the maximum duration of 10 years because their F1 contract does not run over that duration, which is true according to FOM. Whether they would acquire another contract after that unknown period is questionable. And that such potential subsequent contracts would be entitled to METF sponsoring would be in serious doubts because the basic conditions would not be right. There would be no new or major upgraded facility investment that could be used to justify the sponsoring. Other than that I have also pointed out that applying for METF was Hellmund's business idea which he disclosed to the investors. Until it was also disclosed to the public in spring 2010 nobody in Texas had come up with the idea. So it was genuinely Hellmund's intellectual property to claim. As such it went into the valuation of assets he transferred or was supposed to transfer to the company.

Beyond those points I have very little to say other than that we have again come to a point where the discussion is so mired in opposed understanding of the past events that it appears fruitless to continue. After all there will very likely be updates to the legal status soon enough. The judge and the jury will deal with these questions and they will tell us in time who was right. So why should we continue to bore everyone with more disagreement.

[bhall]

A letter of intend is a conditional legal document that becomes binding upon the fulfilment of all conditions.

To be fair, another way to put that would be, "A letter of intent is a conditional legal document that becomes binding upon the coincidental fulfillment of all conditions." That's why it's not a contract.

I might be wrong, but I think Pup's point is that political reality, especially around these parts, dictates that METF funding not be taken for granted. Things have a nasty habit of changing drastically in the blink of an eye and with no warning whatsoever.

It's only prudent then that CotA, and whoever else is involved, move forward under the assumption that METF money doesn't exist and will never exist. Otherwise, you're just building a circuit atop a house of cards.

[Pup]

I might be wrong, but I think Pup's point is that political reality, especially around these parts, dictates that METF funding not be taken for granted. Things have a nasty habit of changing drastically in the blink of an eye and with no warning whatsoever.

Mostly my point is that WB is wrong, but that too.

[xpensive]

Something which interests me is where the investment money for the track really comes from, are Epstein and McCombs
using their own funds or have they other investors behind them, in that case who might that be, local heroes or Wall street?

300 MUSD, if that's what we are talking about, is a tidy sum of money.

[WhiteBlue]

Something which interests me greatly is where the investment money for the track really comes from, are Epstein and McCombs using their own funds or have they other investors behind them, in that case who might that be, local heroes or Wall street?

300 MUSD, if that's what we are talking about, is a tidy sum of money.

No, you have to make difference between the project's first years budget, the company equity and the balance sheet of the company. All of them are entirely different things.

If I were to guess the total company equity (including some intellectual property and good will), leveraged real estate (not only attributed to Epstein and McComb) and cash assets were likely below $30-50m. The majority of the project budget in it's first year was always to come from debt (said to be $190m) raised mainly on the strength of the F1, MotoGp and V8 super car contracts and the state sponsorship (+$20/a). So company balance sheet was probably around $ 260m having no mezzanine capital or supplier's debt.

[xpensive]

And this 190 MUSD debt, where is that money coming from, from the bank across the street?

[FW17]

90 from banks and 100 from private individuals

[WhiteBlue]

And this 190 MUSD debt, where is that money coming from, from the bank across the street?

Good question! I have no clue. You would have to ask Epstein. But one assumes that indeed local banks would provide the non equity capital.

90 from banks and 100 from private individuals

Most likely not! Considering we are talking debt.

[FW17]

90 as Debt

100 as Equity

[WhiteBlue]

90 as Debt

100 as Equity

Not according to the petition.