Formula 1 racing is coming to Austin. The City Council is currently wrestling with a vote that would provide or deny their support for state-level assistance, but dirt is already being moved at the southeast Austin. While it seems from the dialogue that City Council approval is necessary, activity at the track site suggests otherwise. The track, when built, will be known as the Circuit of the Americas.
EXPLORE THE NEW WEBSITE
A new website has recently been posted providing information about F1 racing, the track design, and the current state of construction. The site states that F1 is ranked number 1 in economic impact for sporting events, surpassing the Super Bowl and Olympics. It is regarded throughout the world as among the top three most prestigious events, with the Olympics and World Cup Soccer, according to the site.
The site also says that 600 million TV viewers in 190 countries will watch Formula 1 racing this year. The economic impact from the positive coverage for Austin would be the equivalent of $200 million in television exposure. The website also claims that there would be no cost to city or local taxpayers, which may be interpreted as a stretch of the truth since they are asking for $25 million from the state of Texas. While that may not impact the city’s budget, that is money that ultimately comes at the expense of all taxpayers in the state, albeit indirectly.
For more photos of the track, visit their facebook page by clicking here.
Other events at the track would bring in an additional $400 million, according to the website. Motocross has already expressed an interest in having a race in Austin on the new track and a concert venue has been discussed, which would bring larger crowds to see big-name acts that otherwise have no suitable venue in Austin to play. At other track locations around the world, numerous car companies have set up shop to use the track for testing new vehicles, although no formal agreements of this type have been announced for Austin as of yet.
AUSTIN CITY COUNCIL APPROVAL NEEDED
According to a recent Austin American-Statesman article, some members of the Austin City Council, including newly-elected Kathie Tovo, have expressed concerns about approving the state level incentive of $25 million to Formula 1 for a sanctioning fee. Event organizers state predictions of 120,000 fans spending up to $270 million, which would more than make up for the fee. The trickle effect of the spending during race week would help improve the local economy for a wide variety of citizens.
Construction alone is said to account for over 1000 jobs from 17 participating companies. The construction is being completed entirely with private money. The only money being asked for from the state is for the sanctioning fee. Once the track is up and running, additional jobs in sales, marketing, customer service, administration and support would be needed on site.
F1 IMPACT ON THE LOCAL HOUSING MARKET
How would this impact the housing market? Mostly indirectly, says Mark Sprague, but that indirect impact could be significant. New construction in an area provides a dollar bounce of 7 to 9 times, according to Sprague. That is, when something new is built, the dollars paid to employees passes through 7 to 9 hands in the local economy, helping numerous companies and individuals along the way. Construction workers are paid, then spend their money at local shops and restaurants. Owners and employees at those shops then spend the money at grocery stores, dry cleaners, and other restaurants. In addition, the construction companies require many suppliers to complete their work. Those suppliers have employees who also spend their money in our local economy. Any economic activity of this level would bring jobs and confidence that would in turn lead some to purchase homes, whether they are first time or move up buyers. Mark fully supports the F1 track and hopes to see a huge impact on our local economy, including the housing market.