U.S. might have to wait for Formula One; Texas project is idled

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The fate of the 2012 United States Grand Prix appears to be in limbo.

A $300-million effort to bring international Formula One auto racing to the Texas capital of Austin was placed on hold this week amid disputes about financing the project.

Investors in the Circuit of the Americas project told the Austin American-Statesman on Tuesday that they were suspending construction of a new 3.4-mile racetrack southeast of Austin, idling about 300 workers. Work on the track had slowed in recent months, but sped up in recent days, according to the Statesman.

The project was supposed to mark the return of Formula One to the U.S. after a five-year absence. The last Formula One race on a U.S. track was in Indianapolis in 2007. Before that, Phoenix hosted three Grand Prix races from 1989 to 1991, and Watkins Glen in upstate New York hosted from 1961 to 1980.

But circuit investors, including San Antonio billionaire Red McCombs and local businessman Bobby Epstein, told the Statesman this week that construction stopped because they were still waiting for the rights for the Formula One race from promoter Tavo Hellmund, a former driver and longtime associate of Formula One boss Bernie Ecclestone.

When asked last week about the progress of the Austin project, Ecclestone told the Associated Press: ‘There are two parties. One is building a track, the other has the contract, and they’ve forgotten to talk to each other.’

Epstein posted a statement on the investors group’s website Tuesday and told the Statesman, ‘I don’t know why Formula One would want to kill this race. The money is in place; the project is on time. All COTA needs is for Formula One to convey the original contracts that were in place for a long time.’

‘Construction has to resume in the very near future,’ he added.

The track was designed to accommodate 120,000 fans and a three-day weekend of racing might attract as many as 300,000 people, organizers project. That could bring as much as $288 million a year to Austin. The projected revenue had led state officials to approve an annual subsidy of $25 million for 10 years from the state’s Major Events Trust Fund. By law, that payment could be made in coming days.

However, Texas Comptroller Susan Combs announced Tuesday that the incentive payments would not start until after the first Formula One race, scheduled for Nov. 18, 2012.

She cited ‘recently publicized disagreements between the race right holders and the circuit developers,’ slowdowns at the construction site and a potentially competiting Formula One race recently awarded to New Jersey as cause for concern.

Developers have maintained that they were on target with construction. Paving of the track on the 1,100-acre property was scheduled to begin next year, and permits from Travis County were obtained two weeks ago for the construction of five buildings, including the main grandstand, according to the Statesman.

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-- Molly Hennessy-Fiske in Houston

Video: Construction was underway in August on a Formula One track in Austin, Texas, but was on hold this week, investors announced, with state incentive payments in limbo. Credit: Autovoce