F1: Track Location, Projected Cost & Impact on Austin Real Estate
The $250 million dollar Formula 1 project is one of the most ambitious sports & entertainment venues built in the state of Texas.
Updated April 26, 2011
Where will the Formula 1 Track be built in Austin, Texas?
Austin’s F1 track is named The Circuit Of The Americas (COTA).
In an official press release, COTA outlined their plans for a race track and more:
- 5,400 sq. ft. medical building is being built for year-round use as a training facility for area emergency care professionals and medical school students. During races, the building will serve as a trauma care location for driver-athletes who may be injured in competition.
- Paddock building also serves as a 500-person banquet hall for private or corporate dinners and nonprofit fund-raising galas.
- Luxury suites can be used for business entertaining with a capacity of nearly 750 people, commercial kitchen and cafe.
- 14 Suites, each 3,600 sq. ft. will be outfitted with the latest A/V gear and high-speed Internet to serve as business suites for up to 75 people each. During race weekends, teams and sponsors will use the suites for meetings and hospitality.
- World-class performers will be at COTA during race and non-race weekends. Performers can entertain thousands of people.
Source: Official COTA Press Release
How much money will Formula 1 bring to Austin?
Past Grand Prix events generated big money for local economies.
In 2008, Grand Prix events generated approximately $221 million in Malaysia and $394 million in Bahrain. The Texas Comptroller’s office projects an economic impact of around $300 million annually for Austin — a larger windfall than that of South by Southwest and an entire season of UT football home games combined.
That figure takes into account only the track itself. Often, tracks around the world become development hubs for nearby growth, including condos, amusement parks, driving schools, concert venues and technology centers.
Source: Community Impact News, June 23, 2010.
Two of Austin’s highest-profile business tenants, Freescale Semiconductor and Advanced Micro Devices, have deep ties to Formula One, as does IBM, which has major Austin-area operations.”
Source: Austin Business Journal, June 6, 2010
How many jobs will Formula 1 bring to Austin, Texas?
Construction of COTA brings jobs to Austin and boosts local businesses.
Experts project the construction of COTA will bring as many as 2,000 jobs paying $176.2 million in wages. They also predict COTA will generate about $850,000 in Austin sales and hotel taxes.
Source: Austin Business Journal, March 8, 2011
How will F1 impact Austin real estate?
To understand the impact of F1 on Austin real estate, we’ll consider broader, city-wide factors impacting appreciation values.
- 2,000 Jobs – Formula 1 is expected to create up to 2,000 job opportunities in Austin. Jobs increase the desirability to live in Austin, thereby increasing population and demand for real estate. Demand drives up real estate prices. Austin homeowners know they are in a good spot for equity growth.
- Mortgage Rates – F1 will not have an impact on mortgage rates, but interest rates remain at all-time lows, providing opportunities to homebuyers, increasing demand and home appreciation values.
- Population Changes – F1 will bring 90,000-200,000 people to Austin each year ($200-400M in revenue). To compare, SXSW brings in an estimated 100,000 people to Austin each year ($95M in revenue). COTA will seat 90,000-200,000 people and host F1 and MotoGP racing events. New visitors to Austin decide to relocate, driving up demand for real estate.
- Proximity to Recreation – F1 adds new entertainment to Austin, placing homeowners close to high-speed racing and even more live music. In their reasons for choosing Austin, F1 cited the close proximity of hotels, downtown, F1 circuit and airport.
Formula 1 is one more reason the Austin area continues to thrive and grow. One thing has remained steady for Austin real estate and that’s price appreciation.
Source: Austin Board of REALTORS® Releases March 2011 Real Estate Statistics & Community Impact News, July 23, 2010.
Bernie Ecclestone, President and CEO of the Formula One Group
“For the first time in the history of Formula One in the United States, a world-class facility will be purpose-built to host the event. It was thirty years ago that the Formula 1 United States Grand Prix™ was last held on a purpose-built permanent road course circuit in Watkins Glen, NY (1961-1980), which enjoyed great success. Since then, Formula One has been hosted by Long Beach, Las Vegas, Detroit, Dallas and Phoenix all on temporary street circuits. Indianapolis joined the ranks of host cities in 2000 when they added a road course inside the famed oval. Lewis Hamilton won the last Formula 1 United States Grand Prix™ in 2007, signalling the end to eight years at Indianapolis Motor Speedway. This however, will be the first time a facility is constructed from the ground up specifically for Formula One in the US.”
Why Formula 1 Chose Austin, TX
- State of Texas is the 11th strongest economy in the world;
- Texas has more Fortune 500 company headquarters than any other state;
- State capital nicknamed ‘Silicon Hills’ for being one of the most important regions in the US for the Technology Industry;
- USA’s 15th largest city and is located 145 miles from Houston (4th largest US city), 70 miles from San Antonio (7th largest US city), and 180 miles from Dallas (8th largest US city), population in this triangle is over 22 million;
- Perfectly located geographically for North, South and Central American visitors;
- Over 130 daily departing international flights within 180 miles;
- Over 250,000 hotel rooms within 180 miles;
- Desirable year-round climate, with an average annual temperature of 68 degrees Fahrenheit (20 Celsius);
- Geographically located in the Texas Hill Country, easily the most beautiful city in the State, and considered one of the most in the US;
- Hotels/downtown/Formula 1 circuit/airport located within close proximity of each other, which is nearly impossible for any other large city in the US;
- World class night life entertainment along renowned ‘Sixth Street’; and
- Large film industry presence – many movies filmed in the area.
Formula 1 Notes Austin’s National Recognition
- Known as “The Live Music Capital of the World”
- Voted “Greenest City in America” (MSN)
- Voted “Least Stressful Large Metro” in the United States (Forbes)
- Voted Top Two “Best Cities” in the United States (Money Magazine)
- Voted Top Three “Hippest Cities” in the United States (Forbes)
- Voted Top Five “Safest Cities” in the United States (Forbes)
- Voted Top Ten “Sports & Fitness Cities” in the USA (Sports Business Journal)
Sources: Formula1.com, “Formula One returns to the United States,” May 25, 2010. KVUE Austin “Formula One track to be built within 10 miles of ABIA,” May 26, 2010.
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