COTA Austin - construction and infrastructure

[PNSD]

And thats the very reason why a new track is being built.

We have Road America, Road Atlanta, Watkins Glen, Sonoma...

All great tracks, and many more.. but they are not F1 standard, and to be made F1 standard would be expensive. Track owners might not want that expense, and besides that, these tracks need to remain as they are and not get destroyed by F1 saftey standards etc.

I would rather a new track than see one of those beauts get mutilated !

[cooper-climax]

deleted for more research.

[WhiteBlue]

It appears that the deal is based on the successful aquisition of state and federal financed subsidies.

A state tax-incentive programme – known as the Texas Major Events Trust Fund – was revised last year by State Senator Kirk Watson. This return portions of state tax revenue generated by an event to the city or county hosting the event. Senate Bill 1515 opened the fund to all municipalities and counties regardless of population and shifted the focus of the fund away from athletic competitions and specifically mentioned a United States Grand Prix.

In addition to the promoter Full Throttle Productions, the event seems to enjoy some backing from state government, possibly along the lines of the “shared risk” business model which has worked well in Singapore where a local government works alongside a promoter and underwrites the major expenses, to the point at which it becomes profitable.

It looks like Texas will pay Ecclestone's hosting fees or at least a guaranteed part of those in exchange for the committment to bring the 100 mil $ event to Austin for ten years. This leaves the promoters with the task to get a race track build but all the big entrepreneurial and finance risks will be resolved.

One head ache could be finding the right location without spending too much money on it. But such problems have been resolved in the past by taking a land owner into the business and exchanging equity for the land. If I would think about a venue I would look at old gravel quarries. They are disused brown land sites which will be very cheap. The place will already offer heavy elevation changes which could be used to make a dramatic race track and the pit could be made into a recreational lake.

Luckily the hotel and infrastructure seems to be sorted in Austin which leaves our new GP promoters with the investment of 100-150 mil $ for the track and the necessary buildings. I would not exclude the possibility that Bernie himself will be involved in financing this venture. He is extremely keen to have a purpose build facility in the US which would give him long term stability in the US market. Contrary to his usual PR bubbles he knows very well how important the market is, but he does not want to be seen to give it away. So if he officially takes in big hosting fees but accepts a small return for other investments he has fended off another opportunity of a cheap race.

[flynfrog]

And thats the very reason why a new track is being built.

We have Road America, Road Atlanta, Watkins Glen, Sonoma...

All great tracks, and many more.. but they are not F1 standard, and to be made F1 standard would be expensive. Track owners might not want that expense, and besides that, these tracks need to remain as they are and not get destroyed by F1 saftey standards etc.

I would rather a new track than see one of those beauts get mutilated !

Id much rather watch F1 at Road America than any of the new tracks that have been built to house F1 in the last few years. Do they really need shiny garages?

[donskar]

According to this morning's Houston Chronicle, the Austin track will be at least 3 miles long and will be within 10 miles of the Austin airport.

[donskar]

I don't understand this, why build a whole new track !!!! Their are some awesome tracks in the states, why not upgrade those. I just hope Tilke does not build a flat piece of rubbish...look at spa hermann what adds to it's greatness? It's the gradient changes!

Another F1-standard track in the US? That can't be a bad thing. (This would make two permanent F1-standard tracks, with Indy?)
IF it happens . . .

[bill shoe]

After a day of perspective I have become more skeptical of the plan (like most others here). The announcement seems to be the F1 equivalent of vaporware.

I assume Bernie was happy to sell the "rights" to the promoter for a modest upfront fee. If the promoter doesn't come through then Bernie happily keeps the cash and sells the rights to the next optimistic promoter in line. Bernie surely knew Donnington didn't have much chance, but hey, when an optimist wants to give you money...

Joe Saward mentions the tax rebate thing. Basic optimistic math: If 100,000 people attend, and spend $2000 per person on taxable things (hotel, food, etc), and the local tax rate is 10%, then the event has raised $200 per person in taxes for a total of $20 million. This is roughly in line with what Bernie charges for a race. Let's say this is at least a plausible way to pay the sanction fees.

The elephant in the room is the facility cost. Texas Motor Speedway says their facility cost $250 million and seats ~100,000. The new Dallas Cowboys stadium seats less than 100,000 and cost, what, $500 million? Both of these facilities took longer than 2 years from pushing the buttons until their first event. The 2 year rush for the F1 track will make it more expensive. But let's be optimistic and assume the facility is $200 million. The promoter does not have the money so he hopes to borrow it, but again let's be optimistic and assume 0% interest. That means ticket prices must average $200 per person for 10 years with 100,000 spectators every year. The Indianapolis Motor Speedway didn't come close to this over their 10-year contract.

I think the promoter will only be loaned money to construct the track if the Texas state government guarantees the loan. This in turn is scary because the government could only guarantee the loan if they made unrealistic assumptions about ticket sales over the 10-year contract. The unrealistic government assumptions are kind of by definition-- if realistic assumptions were enough to get a loan then a government guarantee wouldn't be needed.

So to be clear my prediction is-

The race will not happen unless the government issues or guarantees the facility debt. If the government does this then their projections that justify the guarantee will be too optimistic and the government will be on the hook for more money than they initially said it would cost.

[WhiteBlue]

According to this morning's Houston Chronicle, the Austin track will be at least 3 miles long...

http://argent.fia.com/web/fia-public.ns ... 010%20.pdf

The specification calls for a track length north of 3.5 km. So 3 miles is a reasonable assumption when you look at other tracks.

The elephant in the room is the facility cost. Texas Motor Speedway says their facility cost $250 million and seats ~100,000. The new Dallas Cowboys stadium seats less than 100,000 and cost, what, $500 million?

So to be clear my prediction is-

The race will not happen unless the government issues or guarantees the facility debt. If the government does this then their projections that justify the guarantee will be too optimistic and the government will be on the hook for more money than they initially said it would cost.

The cost for a reasonable F1 track in hilly terrain was something like 140 mil $ for Istanbul Park in 2005. I do not see a reason why Austin should pay more. The trick is getting the land almost free and picking a spot that will not take a lot of earth movement. The more expensive tracks have been build on artificially reclaimed land on Yas Marina island and Shanghai. The Arabian tracks even had to import the rock fraction for the asphalt from England by ship. All this isn't necessary in Texas. With some monetary prudence they could build a top facility for a lot less than the Speedway has cost.

[Rob01]

Texas Motor Speedway holds 191K. Plus the infield. In addition Eddie G said they made 22Mil off the first Nascar race held at TMS.

[strad]

The weather in Austin sux

[WhiteBlue]

The weather in Austin sux

In October/November?

[xpensive]

What are you guys talking about anyway, Austin is way south of the Mason-Dixon line? As if anyone of guys would have any idea of what that means...

[donskar]

The weather in Austin sux

Not true at all.

It is hot in May, very hot June, July, August. Sometimes cold (freezing at night only) in Dec and Jan.

Acceptable to excellent weather Sept, Oct, Nov, Feb, March, April, and May.

And since when did heat disallow an F1 race?

[WhiteBlue]

The weather in Austin sux

Not true at all.

Acceptable to excellent weather Sept, Oct, Nov, Feb, March, April, and May.

Perfect to team it with Brazil or even run it in February alone instead of testing.

[xpensive]

Any which way you slice it, there has to be a USGP, problem is to find a venue of course. Phoenix and Dallas didn't work, we know that. Are all the classic tracks out of the question?