Austin F1 track construction

Circuit of the Americas halts construction in contract dispute

2012 F1 calendar

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Austin F1 track construction
Austin F1 track construction

A dispute over the Circuit of the Americas’ contract to host the 2012 United States Grand Prix may put the race in jeopardy.

The circuit owners released a statement on Tuesday saying construction work had been stopped at the track because they had not received the race contract from Formula One Management, “per a previously agreed upon timetable”.

It added: “While construction at Circuit of The Americas has progressed as scheduled with over 300 workers at the construction site daily, all work will suspend immediately. The delivery of the Formula 1 Grand Prix race contract will allow construction operations to resume.”

Bobby Epstein, founding partner of Circuit of The Americas, said: “We have spent tremendous resources preparing for the Formula One and MotoGP Championship races, but the failure to deliver race contracts gives us great concern.

“We believe the United States is vital for the future of Formula One and its teams and sponsors. Given the purpose-built Tilke design, creating a unique fan experience and iconic challenge for drivers, we hope that Texas will not be left behind. More than 100,000 fans have expressed an interest in purchasing tickets for Formula One alone.”

The race organisers added that its readiness to hold a race in 2012 had not yet been affected by the delay.

2012 United States Grand Prix

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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46 comments on “Circuit of the Americas halts construction in contract dispute”

  1. So this was what bernie was on about…

    1. My exact thoughts! But then, why would he go on talking about them and not simply deliver that contract to them?

      1. Maybe he’s trying to eke out some more money now that his friend Tavo Hellmund and the company that builds the track are falling out of love. Or perhaps he’s just pressuring them to get together again since he already negotiated a contract for them once, but on Hellmund’s name.

  2. Here’s a great article about what’s going on behind the scenes. Still no understanding of what the disagreement is though.

    1. Whoops. Just noticed that this article was already in yesterday’s roundup.

    2. The issue is money, some will have to take a bath, and no one wants to. With Bernie announcing the N.J./N.Y. race, the Texas state government doesn’t see formula 1 as attractive now. They were to put up 25Mil for the sanctioning fee.

  3. So Bernie never actually have them a contract to hold the race then? Was those whole Circuit of the Americas a back up plan for FOM when they couldn’t get a race in New York? And now Mr E has his race in New York, he hardly needs this mucking up his calendar, does he?

    On the flip side, they really need to stop starting work on these circuits 18 months before they’re supposed to be used for the first time.

    1. Full Throttle Productions has the contract, which is Tavo Hellmund, and while he’s a founding member of Circuit of the Americas, it sounds like he’s had a falling out with them, so now you have the track owner and contract holding race promoter no longer will to be in business together. From what the Autoweek article says, COTA is trying to negotiate their own contract now directly with Bernie. It’s really all in their hands at this point as they’re who’ve put out the most money up front so far on track construction, and hence have the most to lose if the whole thing goes belly up.

      1. I read in another place, that the contract with Tavo became void earlier for not making a deadline, probably with paying the up front FOM money.
        And Tavo seems to be holding out for a bigger portion of money than the rest think he deserves. Bernie is supportive of Tavo, Combs seems to be showing the publics interest and COTA are holding out.

        This being F1 and Bernie dealing, I wouldn’t be supprised if they announce that everything is now sorted out next week (remember Bernies wake-up calls to both India and Korea before everything was then “perfect” a few days lager). But it might go bad even before that as well.

  4. Well that puts an end to my troubles Canada it is… if only I woulnd´t have to pay like $100 to at least get the interview… Curse you Canada…

  5. The planning of and organization of an American Grand Prix needs to be flawless or else North-Americans will grow even more frustrated with the sport and be reminded again of why most of them don’t follow it.

  6. This is sad news. F1 won’t succeed in America if F1 keeps mucking them about. The ridiculous Indy race with most of the field not participating is one thing to annoy the potential fanbase, and now if FOM are mucking about a group of decent people working their asses off to get a race (and one which I was looking forward to as they were doing it right) it hardly endears them even further to any future potential race backers. Sad stuff FOM/Bernie, get your act together. Two races in the US would be fantastic, one a cool street circuit, the other on a true European style F1 track…. ahh why do they shoot themselves in the foot. I feel really bad for the organisers of this race after all they’ve gone through so far. Please get this sorted.

  7. I dont think the statement its entirley honest… do you guys really think investors are going to start spending money on a track without having a contract!?!?

    i dont think so

  8. Can’t be worse than Edinburgh Trams. They’ll be fine. Just Bernie making things out to be worse than they are.

  9. The race organisers added that its readiness to hold a race in 2012 had not yet been affected by the delay.

    In other words, this “dispute” is little more than politicking and posturing.

    Tempest in a teapot, as is most “reporting” in the F1 world.

  10. The solution in all of this is simple: the organisers and the owners just need to kiss and make up.

    1. It doesn’t sound like that’s going to happen though. The track owners from what it sounds like, are trying to circumvent Full Throttle Productions and get their own contract directly with Bernie. They aren’t happy with the terms they’re being offered though. Something has to give on one of the three sides of this predicament though or there will be no race.

      1. I think we might just be seeing some really hard boiled dealing going on @US_Peter! Bernie is know for it, the guys on the other side of the table are having a try at besting him. I am not counting on them throwing away some 50-100 million they already invested so far quite yet.
        Let’s wait a couple of weeks and we will know.

        1. @bascb, they may not have a choice but to cut their losses and move on if they can’t come up with the cash they need to secure the line of credit that will secure a contract with FOM for the rights to hold the race. The state obviously won’t be fronting any money any longer despite saying in writing last year that they would. That reversal may be at the root of all of this. If they’d paid by July when they promised to, Tavo’s contract wouldn’t be in breach, and as such wouldn’t have been voided by Bernie. As it stands the only way this will go forward is for the track owners to come up with a huge amount of cash in the next couple weeks that it sounds like they don’t have. If they thought they could sort this out, it’s unlikely that the construction equipment and facilities would be removed from the site (which photos have shown started today). I think it’s over, but I’d be pleasantly surprised if they pulled out a miracle and it happens. This isn’t what F1 needed in America especially after USF1 less than two years ago similarly collapsing at the eleventh hour due to a collapse within the organization.

          1. I find it strange, that they would be able to find a lot of money to buy land and built the track, but not 25 million to pay Bernie upfront (money they will be getting back in a year). I am pretty sure Bernie is pushing for them to pay more than that, now they want Tavo out.

            Sadly this is all too true:

            This isn’t what F1 needed in America especially after USF1 less than two years ago similarly collapsing at the eleventh hour due to a collapse within the organization.

    2. oh, if only this happened.. 99% of troubles would be solved

      1. Exactly my worry too. Look at how long the Team Lotus vs. Group Lotus thing went on (esp. if you consider its history back to the 1990ties); it took courts and then probably changing political tides in Malaysia to sort it out.

  11. If ISC or SMI would’ve taken the helm at building this track it’d be done by now and have multiple racing schools & series running on it…. Of course SMI/ISC would then be arguing with FOM/FIA over who should pay who but atleast the track would be done… haha

    1. HA! Like ISC or SMI would do anything to harm NASCRAP. They would have the USGP as a Thursday race to open for the 3 Nascar races on Friday, Saturday and Sunday.

      1. Thursday Race would probaly get better TV ratings not to mention better attendance anyway, especially if in the fall.

        As of now the UGP will be going head to head with the NFL (which likely means the race will be on Speed & not over the air FOX, so less potential viewers).

        Sunday & Saturday are Pro & College football day in Texas & Friday is Highschool Football and in Texas Highschool Football is like a religion… haha

      2. You say that like it’s a bad thing.

  12. They get all worked up about how many Mars Bars each person involved gets for the great looking Austin track, but something tells me everyone will be happy with their candy for the New Jersey car park circuit.

  13. So is this a power play by the COTA organizers ….against Bernie?

    ……oh we Americans are so silly.

  14. Bernie don’t talk doubt without reason.

    1. There are two parties. One has got a track and is building it, and the other has got the contract. And they forgot to talk to each other

      epic rofl

      1. It doesn’t sound like it’s that complex an issue. The way I understand it, FOM issues two separate contracts: one with the circuit owners, to say that the circuit will be used for the race; and one with the promoters, to say that they will run the event. It’s a separation of powers, probably to stop the promoter from using a contract to take the event elsewhere without warning or approval. It also protects both the circuit owners and the promoters from one another, because they depend on each other. However, from the sounds of things, I’m guessing that the promoters feel that FOM should have issued one contract to them and them alone, giving them the rights to host the event and the use of the circuit. And Bernie, wisely enough, will not issue any contracts until the dispute is resolved.

  15. What was Bernie talking weeks back?? Seems like they aren’t paying him too much for the race so he decide that it’s better not to sign any contract.

    1. This has nothing to do with money, and everything to do with who controls what and when.

  16. I can’t help but feel that something fishy is going on here. No one in their right mind is going to put up hundreds of millions without an army of lawyers making sure contracts are sorted properly.

    In 2 years’ time there will be a surfeit of grands prix; with Mexico, South Africa, Russia, and others all knocking on the door, some of the existing races will have to go. FOM will want to keep the 20 most prestigious and profitable races. Perhaps Austin has simply become a nuisance in the last year, and so some “contractual difficulties” have surfaced as a way of getting out of it. If Tavo Helmund turns up as the promoter of the new Mexican GP well know for sure.

    What this shows is that F1, like some other sports, cannot continue as a secret, private business run more like a black market operation than a global business. It must be more open and transparent. If nothing else, the court case going on in Germany will spook sponsors and they will demand higher standards of probity in future.

  17. Shabby by Bernie (as usual) rsp123 is right I think and Bernie has New York GP so who cares about Austin??? Can see maybe the rights for the GP being given to another country (Mexico and Carlos Slim?!) because it is now no longer needed. Stuff everyone else – its all about money… One more race to go before the dreaded SKY deal anyway…..

    1. Actually, for once, I don’t blame Bernie. He has been talking about a GP with the NY skyline as a background for ages. In the absence of that, his longtime friend Hellmund brought him a doable deal for a GP in Texas that could also play well in Mexico, and Bernie gave him a friends and family fee deal to move it along. Sounds like Bobby Epstein is suddenly seeing money to be made (and influence to be had) and isn’t happy with Tavo getting what he views as the lion’s share of it since he didn’t put up any money (never mind that he brought the deal, MotoGP, V8 Supercars, etc and all the personal contacts needed). But in America monetary risk is viewed superior to intellectual capital, and Epstein likely wants disproportionate return to match his disproportionate (financial) investment. Thus he wants to nix the original deal and get a new deal directly from Bernie. But Bernie won’t give him the same terms he gave longtime friend Hellmund (and why would he, when others are willing to pay $10 M more for a sanctioning fee?). Bernie’s got his NY GP now (because he is a good businessman) so Texas is no longer his problem. Epstein better swallow his ego and stick with the original deal and make some money, because all the lawyers in the world won’t be able to get his sunk money back if there is no event.

      1. Bernie’s got his NY GP now

        Let’s not get ahead of ourselves. Ecclestone’s only “got” a New York race in the same sense that he had an Austin race 12 months ago.

        1. Agree with you technically, just trying to convey a sense of where Bernie might be mentally right now. At the same time, the energy in the NY area is already exploding, projects are starting, and from Bernie’s comments, it sounds to me that he has a lot more faith in this one panning out. I would tend to trust his business/people instincts. Any GP is a huge undertaking and thus vulnerable to a multitude of challenges that can end up being deal-breakers. For a taste of the local New Jersey flavor, street-level photos of the proposed course, and how much the local community could benefit, please visit this thread on my home forum (current and ex amateur and pro racers and instructors) with many members in the NY area for a taste of the local flavor:

  18. Well, I hope they get it sorted. This circuit looks promising, if only for the elevation change.

  19. i’ll be really ****** off if these chuckleheads flush the whole thing down the toilet. i’d be disappointed as an f1 fan, and embarrassed as an american that our most “can-do” state flounders on an international level where “emerging markets” that lack a century of industry and sport have succeeded.

    time to stop ******* around, you clowns. the aborted usf1 is still fresh in memory. don’t do this to us again.

    1. To a fellow Yank I must say that it is only our misconceived American exceptionalism that keeps us from seeing how fundamentally the world has changed. We continue to use the term “emerging markets” when these markets have been “emerged” for at least a decade. The Indian middle class has been larger than the entire population of the US since 2000. In India ONE company (a cement conglomerate) put up BOTH the sanctioning fee AND built the circuit– they didn’t need this committee approach, and NO public funds were used. Here in the US we are trying to piecemeal this thing together, and it’s not working because of the egos involved. “Can-do” may have been a concept of American origin, but it depends on a subordination of personal ego to a greater good, and I fear that aspect of the American character has waned, while the rest of the world has learned well from our previous success.

      1. i was thinking “can-do” not so much in effort, but in texas’ very pro-business history. here in massachusetts, bernie’s $25M wouldn’t even cover the preliminary environmental studies.

    2. Meanwhile I agree with all your other sentiments. :)

    3. It is just not going to happen, there are governments around the world that are willing to throw in a large amount of money to get the prestige that F1 brings. The U.S. has way too much compeition for the sporting dollar. If F1 couldn’t make it work at Indy, it will never work in the U.S. It is about the money, period.

  20. I hope this is sorted soon. As in yesterday….

    It’s frustrating when you make reservations for June, just to cancel and reschedule for November (which they just verified to me as having my reservations) and now that date is in jeopardy.

    On top of that, I have 5 people in our party going to a Formula 1 race for the first time. Not good PR at all for F1 in the USA if this event is cancelled. The Indy fiasco with Michelin is finally in the past and basically forgotten by US fans, but I have a hunch it’s going to be news again if Circuit of the Americas event is cancelled. It seems F1 is not wanting to have any fan base in the USA.

    1. The 6 car race at Indy will never be forgotten. If F1 can’t make it work at Indy, it will never make it work in the U.S.
      Way too much competition for the sporting dollar in the U.S.!!

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