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COTA denied $20 million in state funding for 2018 F1 race


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#41
Cnj

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"The word free in that sentence does not equal free stuff it equals free to choose,free to earn,free to succeed,free to fail."

Exactly! So why should multimillion dollar sports franchises get a government handout?


Sigh. Because they (can and usually do) generate extra tax income, jobs, economic growth for the entire area, improved property values and improved quality of life for the community. It’s perfectly fine to not like some people getting rich in the middle of this - and I’m not insensitive to that reaction, but please tell me what your plan B is to achieve the same goals?

More specifically regarding COTA, please make an effort to understand the numbers before making blanket statements about who is getting rich. The track cost over $400M. Do a calculation on the carry cost of that much money, the operation and maintenance overhead, a reasonable return on investment and compare that with the potential income. No one did this to get rich.

And yes to EricJ, abatement was the wrong word, but the rest of my info was correct as Steve noted.

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#42
Johnny D

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Is it too early to bottom line this ??

Oversight committee.

 

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#43
OrangeCrush86

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Comparing COTA funding with Universal Healthcare is a nonsense argument.


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#44
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"The word free in that sentence does not equal free stuff it equals free to choose,free to earn,free to succeed,free to fail."

Exactly! So why should multimillion dollar sports franchises get a government handout?

COTA is a multi-faceted facility that hosts many more activities than just racing.  However if it goes bankrupt, not only do the residents of Austin\Texas\USA lose the only purpose built F1 track in the country, they lose a huge economic development zone in the region.  The change in the are of the last 7 years has been amazing, so its not just benefiting the rich it is stimulating growth in the region.  

 

The state holding the owner hostage over a missed deadline is silly, if they want to send a message, fine the owners but don't make bankruptcy a real possibility.  If they track cant pay F1 its money it loses F1, if F1 goes away the track will go away.  Talk about wasting taxpayers $$$$.    


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#45
LarryKing

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Am I the only one that sees a $25M/year F1 sanctioning fee as non sustainable? Not just for COTA but for the sport in general. (I'm old - I use to go to the U.S. Grand Prix at Watkins Glen [the original purpose-built F1 track] where a weekend pass cost $35 - that's $135 in 2019 dollars - which won't even buy general admission at COTA for the race)

 

And is a facility that has at the core of its business plan a $20M/year public subsidy really a good investment of public capital? The hospitality and retail businesses benefit but who else? Are the costs of increased public safety officers, sanitation services, and impact on intrastructure during COTA events factored in? Increased property values are great if you're selling a house, not so great if you're a young family priced out of the housing market. Does the guy just trying to get home from work in event traffic experience increased quality of life?

 

Anywho, Mr. Creighton had the definitive answer - COTA had a mechanism to ensure continued subsidy - and blew it. Free to fail, right?

 

I'm sure the whole issue will be worked out, the race will go on, and this entire thread is just blah, blah, blah...


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#46
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Anyone notice all the empty seats at yeaterdays race at Atlanta Motor Speedway? At many of same tracks the reduction in spectators has been ongoing for years. Are they subsidized by cities/government? Road courses are no different. When the newness wears off COTA is it expected the subsidy will grow larger so COTA can stay in business. If all this spewed logic keeps race tracks in business I surly wish the state of WI and the city of West Allis, WI would catch on and understand so the Milwaukee Mile would have races at the oldest oval track in the world. 


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#47
LarryKing

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Ha! NASCAR tracks are tearing down grandstands to improve the optics. In the 90s I had tickets every year for the Brickyard 400 until after 5-6 years I tired of paying triple the standard hotel room rate with a 3-4 day minimum. Talk about killing the goose that laid the golden egg.


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#48
Steve Scheifler

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Ha! NASCAR tracks are tearing down grandstands to improve the optics. In the 90s I had tickets every year for the Brickyard 400 until after 5-6 years I tired of paying triple the standard hotel room rate with a 3-4 day minimum. Talk about killing the goose that laid the golden egg.

You are definitely on to something in terms of total cost to attend pricing many people out of NASCAR. It’s not the organizer’s fault when hotels gouge but it all plays into the decision to go or not. And I think in some ways that form of racing is simply past its peak.

But, you still seem to completely disregard the notion that $20M+ doesn’t come out of existing tax revenue, and until you concede that all of your arguments on that topic have no basis in fact.
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#49
LarryKing

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So Austin gives back $20M because, after all, the track earned it. So who pays for all the public services costs incurred by Austin because of COTA events. Did COTA pay for road improvements to the track? To put it another way, should Uncle Sam give you back all the taxes you paid last year because, after all, if you didn't work they wouldn't have that money anyway? And you plan to put it back in the economy?
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#50
LarryKing

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The article is about sports stadiums, but you get the gist. https://research.stl...ports-stadiums/
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#51
Cnj

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So Austin gives back $20M because, after all, the track earned it. So who pays for all the public services costs incurred by Austin because of COTA events. Did COTA pay for road improvements to the track? To put it another way, should Uncle Sam give you back all the taxes you paid last year because, after all, if you didn't work they wouldn't have that money anyway? And you plan to put it back in the economy?


Ok. Is there some reason that you think that city officials are financially stupid? Of course stadiums (and COTA) cover many costs. Everything is a long financial negotiation and cities (with tight budgets) want every penny they can get from stadiums and their owners. If you think that wealthy team/stadium owners are the only ones who play financial hard ball, then you have not sat in some of those meetings. You have painted this as a binary issue and it’s not. Either you don’t know this, which is fine, or you simply continue to enjoy being obtuse about it.

With respect to the article you quoted, I’ve read that article before. It’s been a topic of decades of debate as to the veracity of that argument. Again, like your argument, it’s a simplistic article. Many “subsidies” are voted in by the voters themselves not money spent by some politician. Many/most of the subsidies are then paid for by an increase in tax on hotel room, rental cars, etc. So who do you think pays those taxes? Locals?

Entire sports campuses, convention centers and other city attractions are often paid for by visitors and not the locals. In the Dallas area this includes the convention center adds and the Rangers stadiums (both the last one and the new one).

As to city impact, go visit Detroit and come and make the argument that the new sports facilities (along with all the associated mixed use space and restaurants) is not rapidly and impressively dragging that city back from a bad place.

I’m done.

CNJ
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#52
Steve Scheifler

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The article is about sports stadiums, but you get the gist. https://research.stl...ports-stadiums/


Stadiums are a notorious example, and in some cases probably a very bad deal (ours for the Rams was no bargain). Worse by far I suspect is the typical Olympic games, which is the king of gambles often gone bad. That doesn’t make every deal a bad one. I don’t know all the details of the COTA deal and the big event kickback may be only part of what made it feasible. As I’ve said, with what little I know it does seem very generous but it is also different than many deals in that it pays only after the fact for (estimated) performance rather than lofty projections years in advance. Give someone credit for that at least. And I gather that the program is available to any large event bringing people from out of state. It would be interesting to know whether that program originated or changed as part of the negotiations to build COTA, or already existed in its current form and they counted on it from inception.

But the bottom line is that if you think most major cities can prosper these days without a variety of tax incentive deals then you are completely out of touch. And that would be fine, not everyone needs to understand the details or agree with evey deal, and that’s why we have elected officials. If you think it’s all bad then you know what to do.
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#53
LarryKing

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The majority of economists believe that publicly supported sports facilities are a bad deal.
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#54
Steve Scheifler

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The majority of economists believe that publicly supported sports facilities are a bad deal.


So is an upscale new car, or any new car for that matter. Likewise almost any luxury brand ANYTHING.
Most economists do not take into account what people (tax payers and voters) WANT. Face it, the economy thrives on lousy economic decisions.
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#55
LarryKing

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Face it, the economy thrives on lousy economic decisions.

 

Hence the $22 trillion national debt.

 

PS: COTA is privately owned and does not release their financial reports. To me, if the public has skin in the game they have the right to know this information.


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#56
Ron Alan

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Hence the $22 trillion national debt.

 

PS: COTA is privately owned and does not release their financial reports. To me, if the public has skin in the game they have the right to know this information.

Kind of like email servers and personal tax records? Or should we hold some stock in the definition of private? After 8 wives you of all people I would think values that word? :) 

All in fun Larry...avoid the word majority...you sound like a president or a talk show host! 50.1% is still a coin toss in the majority of peoples eyes  :duck:


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#57
Jim Drago

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PS: COTA is privately owned and does not release their financial reports. To me, if the public has skin in the game they have the right to know this information.

this part I agree with


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