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AUSTIN, Texas – Embattled promoter Tavo Hellmund has admitted that organizers of the Formula One United States Grand Prix in Austin, Texas, are in breach of contract over “multiple issues,” specifically a $25-million sanctioning fee due for the inaugural event scheduled for Nov. 18, 2012.

Hellmund addressed a number of issues surrounding the status of Circuit of The Americas, the $300-million facility under construction in southeastern Travis County, during a hastily arranged news conference downtown Thursday afternoon.

The Texas project is fronted by Hellmund, chairman of Formula 1 United States and managing partner of Full Throttle Productions LP. Hellmund has signed a 10-year agreement to host the United States Grand Prix beginning next year with Bernie Ecclestone, president/CEO of Formula One Management and Formula One Administration.

COTA organizers halted construction on the facility Tuesday, claiming they had not received a contract from Formula One. Ecclestone, in turn, cited infighting among the organizers and the fact that the sanctioning fee had not been paid. On Thursday, Ecclestone gave organizers one week to agree upon a contract and produce a letter of credit guaranteeing payment.

Here is an edited transcript of the news conference, as originally printed by RACER.com:

TAVO HELLMUND: The real reason we’re having this press conference today, and not for a sponsor although I hope we can announce a big sponsor in a couple weeks, is that we don’t have a contract. The reason is as a project, we have failed many times over to fulfill our financial obligations to Formula 1. It literally is that simple.

I was encouraged today to see some news reports that the door is still open for us to be able to fix that, and I’ve also been encouraged in recent days to see that apparently all the funding’s in place. And so with that being said I’m really optimistic and hopeful that we’re going to get this done and we’re going to have a grand prix next year. The only thing up-front is that I have been very circumspect in my comments to this point, because I didn’t want to do or say anything that hurts the project long-term. Any of you who have known me know I’m a little worried, but I’m hopeful because this project means the world to me.

Personally, I have been bothered by the rumors, when it’s reported that “Tavo is holding out for money.” One thing said that I walked away from $39-million. I’m not money-oriented. If I had even a fraction of that, I’d be in Tahiti working on my tan. I’ve spent six or seven years on this project, and have earned a decent salary on one of them. But I don’t want anyone to question my motives. Right now we should be praising Mr. Ecclestone. We were in breach on multiple issues since as late as May. He sent numerous requests and letters that we were all aware of, of how to fix it, and we failed to do that.

The final point I want to make is that there’s been a misrepresentation picked up in the media. Maybe it’s been expressed wrong, but some people said there hasn’t been an assurance of where it would be held. That couldn’t be further the truth. Every contract is site-specific, you can’t move it somewhere else. Maybe the move was going to be to Houston or Dallas? That couldn’t be further from the truth. There have been 18 months of assurance for F1 to receive its money. The FIA has the listing as Austin, Texas. There’s no other place in the world it could be held but Austin.

Although I’m extremely worried, as (fellow-investors) Red (McCombs) is and Bobby (Epstein) is, I’m hopeful. We keep getting bombarded from media. But if we make good with F1, we can do it.

Q: Why hasn’t Bernie Ecclestone been paid the sanctioning fee?

TAVO HELLMUND: To be perfectly honest, the money part has never been my role. I wouldn’t have been willing to give up 18 months of my life on this.

Q: Who should be paying the fee, then?

TAVO HELLMUND: The partners of COTA (Circuit of The Americas).

Q: Might you be dropping out of the project?

TAVO HELLMUND: I think what I offered to do, a while back, was that there was a different philosophy of direction. We asked if we could buy my partners out. For whatever reason they chose to decline that. Instead they offered a buyout for me. That has been in an ongoing negotiation. But that doesn’t deal with whether they bring the circus (the race). It was hard for me to agree to, as this has been my baby, but there’s no one who wants to see F1 at COTA more than me. Red and Bobby specifically have spent a ton of money on this. It’s not anyone’s fault. The project has been underfunded, but hasn’t been done intentionally or maliciously…but maybe that’s not the case now.

Q: How does a project like this get off the ground, and then where does the money go?

TAVO HELLMUND: Like any project, there have been a lot of hurdles. Things like gas lines on the property, soil conditions…so many things that no one anticipated.

Q: Is the full money there to secure the event for 2012?

TAVO HELLMUND: I just know what I’ve read in the last few days.

Q: Did you agree to a buyout?

TAVO HELLMUND: I agreed to one (Hellmund’s attorney interjected to say negotiations have been ongoing for weeks but no resolution has been reached).

I’m willing to do whatever it takes for the project going forward. If I need to step out, I can. Everyone involved wants this project to happen. The truth here, this project needs to meet its financial obligations with Formula 1. It’s just that simple. The project has been underfunded. That’s not a surprise to anyone.

Although my relationship with Bernie is strained and tested now, he had allowed us that flexibility. But when they ask you for payments, and you don’t do it repeatedly then we got the publicized meeting of two to three weeks ago. It was, “You can pay this now and we’ll continue with the contract, or tear it up and draw up a new one, or cancel altogether.” We didn’t choose to remedy the one in place. So he pulled the plug.

Q: So who were in the negotiations at that meeting?

TAVO HELLMUND: Me, and Bobby and a couple of other reps from COTA. Steve (Sexton, COTA president) was there. There were a bunch of attorneys.

Q: If you’re the promotional F1 expert, what would your removal mean?

TAVO HELLMUND: I think you’d need to ask the others. I know this, and I think Red and Bobby know this. If it’s all agreed upon that one needs to part, I’m happy to part. It goes back to a difference in philosophy. Lots of families have bickering. I’m hopeful all three of us want to see the project happen.

Q: When the race date was changed (from July to November 2012), why wasn’t the date for the $25- million pushed back as well?

TAVO HELLMUND: One of the reasons was that we were way behind on construction. The race date was always going to be combined with Montreal. (Ecclestone) understood we had some challenges and moved the date. At the end of the day, the dates moved. We had a window with the major events trust fund, probably two to three weeks.

I don’t know that it soured. Everyone has their own idea of the way something should go. You have to know how to get along and work the best you can. I think, even though the press has been bad in the last week, there’s a lot of hope. Track is halfway built.

If Bernie and FOM get their money, (the race can go ahead). It’s that simple.

Q: So how much money are we talking?

TAVO HELLMUND: I can only speak for the contract I had, the $25-million. I have no idea if it’s gone up.

Q: How much are you short?

TAVO HELLMUND: I have no idea. Truly, when I say things, it’s not posturing. I had no idea about the finances. I’d heard it looked good.

Q: As the face of the project, how can you not know?

TAVO HELLMUND: It’s not my role. Ideally, it would be nice to think someone needs to jump on a plane, get this done and make him (Ecclestone) happy.

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