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Council to decide on X Games funding application

Wednesday, April 1, 2015 by Jo Clifton

The Austin City Council is considering whether to endorse the application of the Circuit of the Americas for funding from the Texas Major Event Trust Fund for the summer X Games this year and in 2016 and 2017.

The Major Event Trust Fund applies local and state gains in sales and other taxes generated by major sporting championships or events to pay costs incurred from hosting the event. The state uses the fund to cover expenses related to preparing for or conducting the event, such as construction and equipment costs.

The X Games is already eligible for funding from the Event Trust Fund, but the Major Event Trust Fund would provide about $1 million more than a smaller fund, according to Wayne Hollingsworth, a member of the Circuit Events Local Organizing Committee, known as CELOC. Hollingsworth practices corporate and financial law at Armbrust & Brown.

When Council members discussed the matter at Tuesday’s work session, they did not seem to be in a hurry to make a decision about endorsing the X Games application but they did not realize how close the legislation was to final passage.

However, the Texas Senate gave final approval Tuesday to House amendments to SB 293, sending the bill to Gov. Greg Abbott for his signature. The bill allows the X Games to apply to the Major Event Trust Fund for funding. In addition, NASCAR would likewise be able to apply for this funding for races at the Texas Motor Speedway.

Sen. Jane Nelson (R-Flower Mound) sponsored the bill specifically to help the Speedway, which is in her district. The bill cleans up legislation approved in 2013 that was supposed to cover NASCAR and the X Games but did not.

Language in the legislation states that if both houses approve a bill with a greater than two-thirds majority — which they did — the legislation can become law immediately. Thus, Abbott can either sign it or allow the bill to become law without his signature in 10 days. He can also veto the measure, but that seems unlikely. If he did so, the legislature would have the opportunity — and the votes — to override his veto.

Rodney Gonzales, deputy director of the city’s Economic Development Department, told Council that the local organizing committee has until April 16 to apply for funding to the Major Event Trust Fund for this year. Gonzales sits on that organizing committee and assured Council that he has been a very active member. CELOC acted on the city’s behalf in applying for funding and providing follow-up documentation for the Formula One Grand Prix and various other events at Circuit of the Americas.

According to the resolution, the committee has committed to “fully funding the cost of any study, and any amounts determined by the Texas Comptroller … to be due and owing by the city should these events qualify for Texas Event Trust Fund status or Major Event Trust Fund status.”

In effect, Circuit of the Americas pays the city’s share of any funding the state requires from a local entity through CELOC. Gonzales said that last year, the local committee came up with $176,352.

In the past, Council has approved the Circuit of the Americas’ request that the city waive certain fees and in-kind assistance up to $150,000. However, the venue did not request the money.

Gonzales pointed out that the city does bear some direct expenses, such as extra public safety costs and on-site medical services. Other events, such as SXSW and the Fun Fun Fun Fest, generate the same expenses. He said there is no hurry in making a decision about the fee waivers, but the resolution does anticipate that the Circuit of the Americas will request those waivers in the future.

Mayor Pro Tem Kathie Tovo joined the Council in 2011, just in time to vote against the Circuit of the Americas’ request for the city’s endorsement for Major Event Trust Fund money for the first Formula One race in Austin. She was one of only two Council members to oppose it.

To no one’s surprise, Tovo has not changed her position and still opposes the application. She said she was not convinced that the X Games needs the funding. “The purpose of the funds is to attract major events to the state. … Why are we endorsing public support that is designed to recruit an event to the state that is already here?”

Council Member Leslie Pool also expressed her disapproval of the application, indicating that she did not like the idea that an outside entity, the committee, was actually making the application.

Hollingsworth told the Austin Monitor that while CELOC prepares all of the economic information and hands the application over to the city, a city official signs an affidavit affirming the veracity of the data as well as a letter to the comptroller seeking the funding.

Mark Tester, who directs the city’s Convention Center, said that other cities such as Chicago and Denver put together “very aggressive packages” to try to lure the X Games to their cities. He said from the perspective of the city’s major hotels, having the X Games make a four-year commitment is very positive.

Mayor Steve Adler said, “We need to have a long discussion on how we do fee waivers,” as well as a briefing on both of the state’s event trust funds. He indicated that the matter would likely go to committee. However, that does not mean he will not be ready to vote on the immediate question Thursday.

“Generally, if there is state money being made available to the cities, I want to get as much as we can,” Adler said.

The X Games will be in Austin June 4-7. If you want to go to all the events, which include competitions among motorcycles, skateboarders, bicycles and off-road trucks as well as numerous musical acts, you can buy a wristband for $109. The VIP package, at $1,300, includes credentials for all three days, access to air-conditioned viewing areas, food and beverages, the “opportunity for one exclusive athlete meet and greet each of the three days” and a parking pass.

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