Austin City Council members heard a presentation today on Formula One Austin, that asks the city to contribute $4 million per year to a fund that would be managed by the group. The money would come from additional tax revenues generated by people visiting Austin for F1 events.
The Circuit Events Local Organizing Committee, which announced its formation yesterday, says it would pay $4 million out of its own pocket for the first year into a new Major Events Trust Fund. The fund could be used to finance costs related to F1 events.
One of the big questions is whether the city would generate enough sales tax, hotel tax, and other revenue from F1 events to meet a $4 million annual obligation. Council members have requested that any contract clarify the city is not liable to cover the difference if the $4 million threshold is not met.
The city is supposed to contribute the annual $4 million to secure $25 million in annual funding from the Texas Comptroller for Austin’s F1 track, the Circuit of the Americas. The city could opt to renegotiate the amount it contributes and receive less from the Comptroller in turn, but F1 officials warned that such a scenario may result in not enough government funds being contributed for the project to succeed.
The Circuit Events Local Organizing Committee reminded council members that the deal would bring up to $300 million in private investment to construct what would essentially be a multipurpose facility. The Circuit of the Americas could host other races besides F1 and could also serve as a music venue, for example.
City council members are scheduled to vote on an agreement on June 23 that would create the Major Events Trust Fund.