Updated: Thursday, 05 Aug 2010, 6:11 PM CDT
Published : Tuesday, 27 Jul 2010, 9:43 AM CDT
AUSTIN (KXAN) - KXAN Austin News is first to learn businessman Billy Joe “Red” McCombs is the principal investor in the new Formula 1 track to be built in Austin. The newly announced project partner said he dove into this endeavor, knowing its potential to make a huge economic impact on the area and also in his own wallet.
The center is part of McCombs’ UT namesake, the McCombs School of Business . In addition to making Forbes magazine’s top 400 richest Americans since 2005, he was also a former owner of the San Antonio Spurs , Denver Nuggets , and the Minnesota Vikings . Forbes says he is worth $1.3 billion.
The founder of the Red McCombs Automotive Groups and co-founder of Clear Channel Communications joined the man responsible for bringing the track to Austin, Tavo Hellmund, and various Formula 1 officials. Hellmund, a former racer and Austin native, said the city is built for F1 success.
He cited its geographic location, its nightlife for the estimated 200,000 visiting fans, and Austin's willingness to embrace technology as reasons the city will be the first permanent home to F1 in the U.S. in nearly three decades.
"Without a doubt, (this will) make this one of the true great sporting events in the world on an annual basis," Hellmund said.
Hellmund's company, Full Throttle Productions, and McCombs Partners are two of a small handful of investors in the estimated $250 million project. Prophet Capital Management, an Austin-based private investment company founded in 1995, is the third, along with the additional services of MotoGP World Champion Kevin Schwantz.
So far, the private partners have not disclosed their specific stakes. Officials said they will not seek further investors, though McCombs said they still must raise "a lot" of capital. Texas Comptroller Susan Combs, who has been integral on the state level for this project, told KXAN she is confident the group will secure the necessary funding.
"When you have the performers that these guys have, they're going to be able to raise the money," Combs said.
Officials also announced the track's exact location on about 900 acres near Elroy in southeastern Travis County previously meant for a residential development called Wandering Creek.
Speculation surrounding the exact track site began shortly after Formula 1's initial announcement two months ago. Many correctly thought the site to be in the general area just to the east of the Austin-Bergstom International Airport near Elroy and McAngus roads , north of FM 812 and east of State Highway 130 .
The Grand Prix event will be held in Austin between 2012 and 2021. During that time, the event is expected to rake in anywhere from 90,000 to 200,000 people each year.
That could mean an economic impact somewhere between $200 million and 400 million. On the low end alone, that's about the same amount brought in by the Austin City Limits Festival and all the University of Texas football home games for an entire season.
Officials plan to begin construction in December and hope to be complete in early 2012. They said the track will be used for other off-season events and for research into alternative fuels.
Formula 1 also launched a new Web site Tuesday, as well. It is formula1unitedstates.com .