Q&A WITH MARK SPRAGUE
Mark Sprague is a noted and respected expert on the real estate industry and the Austin market, in particular. He is also the Director of Business Development for Mission Mortgage and we are fortunate to have access to his expertise and opinions. Recently, Mark was asked for his views on the proposed Formula 1 race track planned for Southeast Austin. Here are the questions and Mark’s responses:
Question – What are the direct economic impacts of building the F1 track?
Answer – Starting with the engineering and construction of the actual site, we will see added spending on labor in our local market area. When you consider all aspects of the track, it is clear that architects, planners, surveyors, civil engineers, traffic engineers, structural engineers, general contractors, construction firms, HVAC companies, electrical engineers, and many others will be needed to complete the entire site. All of those lead to local jobs paying employees who will spend money in the local economy. Construction alone is expected to account for over 1000 jobs using 17 participating companies.
Once the track is built, the F1 race itself is predicted to generate 120,000 fans spending as much as $270 million in our local area. In addition, other events at the site are estimated to generate as much as $400 million in additional spending every year. MotoGP (the top international motorcycle racing circuit) has already expressed an interest and the facilities are being designed to accommodate large concerts, corporate events, and additional racing or auto-related activities.
Question – What peripheral impacts can we expect from the F1 track?
Answer – Like all real estate, the ‘Circuit of the Americas’ is a real estate development. It is not just about one or two ‘mega races’ but about all the other events and businesses that will be attracted there. Much like a Golf course or a convention center, race tracks recruit new support businesses. Besides the race revenues, we can expect an impact from new resort hotels and convention centers, automobile research centers, real estate services, engineering and construction firms, restaurants, catering, security and general support services.
Question – What non-economic impact will the track have on Austin?
Answer – Primarily, exposure. The track would generate an estimated $200 million in television exposure every year…exposure that the City of Austin does not need to purchase. Remember, F1 is internationally popular, so exposure would extend around the globe. The track will change how Austin is viewed in the global economy. Just last week Austin was mentioned in an article in Sports Illustrated about the F1 track. Advertising in a major circulation periodical like Sports Illustrated is not cheap and being mentioned in the context of an article, rather than an ad, is profoundly more powerful.
According to the U.S. Census Bureau, over 560,000 people are expected to move to the Austin area in the next 10 years. This figure was determined without consideration of the F1 track and it’s impact on the local economy. As the Census Bureau is generally conservative in its predictions, we could see a much higher number when all is said and done.
Question – How does the F1 track help the local community?
Answer – The track will bring jobs. The track will bring tax revenues. The track will attract more people to the area, some of whom will start new businesses and hire local employees. The track will bring greater exposure to our area, which will help boost our position in the world. All of this trickles down to every person in Austin.