Editorials, F1 Event News, Official Press Release Posted by phil h. - Friday, May 25, 2012 6:19 - 0 Comments

USGP Austin founder and financiers argue over details and rights to F1 race

It has been a long six months. Anyone that has been following the Austin Formula 1 Project [USGP] knows it has not gone smoothly. 1st came the public outcry about taxes. 2nd wave of criticism came about traffic, hotels and congestion. Cries of “boondoggle” were heard loud and clear – and the PR machine went in to effect. Media and locals fans signed on early, going to bat with a positive outlook for what could be a great addition to central Texas, and the United States. Plans were laid out, designers from Germany and F1 visited the location, developers flew overhead in helicopters, and beautiful renderings of LEED quality building were released along with press conferences about community involvement. The media presentations were met with great enthusiasm and the “Bigger in Texas” attitude charmed all but the most local skeptics. The cries of cronyism and corruption were quickly replaced with a positive spin on international tourism, huge attendance numbers, bigger potential revenue streams, and 300+ days of uses for this new automotive facility.

Tavo Hellmund was a major part of this charismatic charge to bring Austin this grand vision of world class automotive racing. His close relationship with F1 head honcho Bernie Eccelstone brought major credentials to his thin resume – and no one could deny with Benie’s blessing –  most of what Tavo promised could be a reality. Tavo just needed some financing for the facility. Outside of Indianapolis and New Jersey, this new road circuit is a godsend for any US motorsport fan. Everything put forth on the table looked great and the racing community at large was eager to grab a seat at the table. With all the cries of ‘boondoggle’ in the back of their collective consciences, and the announcement of private funding by auto giant Red McCombs – all was well for the USGP.

Who new the ‘boondoggle’ was not with local real estate, politicians or construction, but Tavo himself and his relationship with his financiers?

Where did the dysfunction start? That’s the big question many who have followed the project are wondering. It’s hard to tell, due to the influx of 3rd parties offering their speculative analysis, based on vague, and often contradictory statements coming from the official parties involved. One thing we do know, Tavo is out, Red McCombs is on the sidelines, and Bobby Epstein is calling the shots. The rest of the US open wheel racing community on edge, wondering. Who owns what percentage of the current project and who will dictate its future? How this affects the 2013 USGP and beyond is everyone’s concern. According to he COTA group, construction is on target, the 2012 USGP is go, and ticket sales are fine. Their traffic plan and means of gathering fans to the track was recently released and certainly up for another debate, but highlights their commitment to making the 2012 USGP happen. What COTA would like to put behind, according to their latest press release, is the very public problem where Bobby Epstein felt it was necessary – and at a large financial cost – to drop Hellmund from any involvement in the project. But Why? For any US F1 fan following the debacle, the charge that Tavo had little to do with the initial contract with Bernie and F1 coming to the Austin seems a bit far fetched. Many witnessed the initial concept by Tavo, and the introduction of McCombs as the finances. Even the early stages of design and concept were all attributed to Tavo. How Epstein plans on proving Tavo misrepresented his position should prove interesting in the coming days.

Recent press releases from both sides concerning the ownership/buyout of the Austin Circuit of Americas:

Circuit of The Americas leadership seeks to put an end to Hellmund issues

Circuit Chairman Robert Epstein reiterated the company’s desire to put an end to the dispute with Hellmund and Hellmund’s various entities through binding arbitration, as was agreed to in writing by Hellmund and all parties subject to the Accelerator Holdings company agreement. “Our intent from the beginning has been to resolve this matter efficiently through the agreed-upon binding arbitration process, and we feel that unsealing the court records moves us closer to this goal,” Epstein stated.
Circuit of The America’s attorney Michael Whellan noted that, “We believe the facts made public through today’s filing strongly support our position that Mr. Hellmund’s claims and accusations—and his misrepresentations to Circuit representatives and the public about his ability to assign Formula 1™ race contracts—only serve to undermine his case.

“We believe the tactics Mr. Hellmund and his legal team have employed to date are meant to purposely generate negative public sentiment about Circuit of The Americas in hopes of extracting a large settlement. Unfortunately, we do not expect these tactics to end anytime soon. Nonetheless, we are prepared to arbitrate this dispute as the parties have agreed to do in writing.”

Statement from Tavo Hellmund’s legal team

The following statement was issued in response to a news release distributed by Circuit of the Americas (COTA) earlier today.

“If Bobby Epstein truly desires an efficient resolution of his dispute with Tavo Hellmund, as he now claims, he can simply honor the $18 million buyout agreement that he signed in September of 2011. If not, Tavo is prepared to amend his pleadings to include charges of fraud and other misdeeds, based on newly discovered evidence. We believe this evidence demonstrates that Mr. Epstein intended to force Tavo out of the F1 project from the beginning. As required by the September agreement signed by Mr. Epstein, these new claims will be litigated in the Travis County, Texas courts—not in a secretive arbitration proceeding.”

Please attribute this statement to Eric Wetzel, a spokesman for Tavo Hellmund’s legal team.