City Council Holds Special Meeting on Austin MLS Stadium Plan

Austin MLS stadium McKalla Place rendering 3

The Austin City Council held a special meeting Wednesday on an Austin MLS stadium plan, beginning a crucial series of discussions about the proposal. 

Precourt Sports Ventures is attempting to move Columbus Crew SC to Austin, and is negotiating a plan for a new stadium with city officials. Crew investor-operator Anthony Precourt would privately finance a $200 million stadium at McKalla Place, a 24-acre city-owned parcel in North Austin. The city would maintain control of the land, meaning that PSV would not pay property taxes. However, PSV would lease the land for $550,000 annually after year five, or $8.25 million over the initial 20-year agreement. In addition, the group would pay for site preparation and any cost overruns.

A discussion about the stadium took place at Wednesday’s special meeting of the city council, which is also expected to debate the plan again on August 7 and potentially vote on August 9. A few councilmembers showed some reservations Wednesday, including questions over funding for a potential new rail station. In addition, councilmember Leslie Pool–whose district includes McKalla Place–raised concerns that PSV is not contributing enough toward a capital improvements fund. More from the Austin Monitor:

The biggest monetary ask on Wednesday came in the morning session when Council Member Delia Garza reviewed her new proposal that would ask Precourt Sports Ventures – owners of the Columbus Crew team that may relocate to Austin – to contribute $3 million and a $1 transit fee on each game ticket to the Capital Metropolitan Transportation Authority to pay for construction of a rail station next to the McKalla Place property that is owned by the city.

Council’s discussion covered everything from asking for a list of the city’s costs of risks and liabilities in the proposed agreement, to questions about how the city and PSV split responsibility for traffic impacts and safety costs on game days, how the affordable housing complex Council pushed for on the property will be realized, and what specific community benefits will be included in the final stadium agreements that will largely be finalized between the two sides in private.

A presentation led by city Chief Financial Officer Greg Canally and Frank Jones, a partner with the Greenberg Traurig consulting firm that helped the city negotiate the term sheet, pointed out that the $200 million stadium is one of only three recent Major League Soccer stadiums with no public financing.

Pushing back against the statement that the team’s annualized rent of $412,500 – or $550,000 for the final 15 years of the 20-year lease – would be one of the higher rents in the league, Council Member Leslie Pool suggested that the team should also contribute more annually toward a capital improvements fund to cover repair costs at the stadium, which will be given to the city in a move to absolve the team of property tax payments.

Over the coming stretch of discussions, the finances will be a major area of focus. The fact that PSV would not pay property taxes under the proposal has prompted criticism in some circles, and questions have lingered about whether the city could negotiate a better agreement with the group or pursue another development plan all together for McKalla Place.

Chris Dunlavey from Brailsford and Dunlavey, a firm advising the city in negotiations, commented on the proposal during Wednesday’s meeting. He believed that the city had negotiated a favorable deal for itself, given the commitments that PSV could stand to agree to. More from the Austin American-Statesman:

“All around, I don’t know how it could get characterized as favorable to (Precourt Sports Ventures),” Chris Dunlavey, president of Brailsford and Dunlavey, the sports development firm advising the city in negotiations, told the American-Statesman. “I think the city of Austin has negotiated this to as favorable for a city as PSV could stand to do.”…

If the deal is signed, PSV would be guaranteeing all of the financial requirements in the lease, leaving the city without risk of having to pick up the bill. If PSV were to abandon the project, they would have to pay back the city for any money spent and return the site to construction ready.

“We think there’s every potential that (PSV) can succeed here, but they are definitely taking the risk for the amount of capital they’re committing to finance this thing,” Dunlavey told the Statesman.

“But one they’re willing to take,” added Greg Canally, the city’s chief financial officer.

In late June, the city council approved two resolutions relating to McKalla Place prior to taking a summer break. That included a resolution directing the city manager to analyze the proposal and undertake negotiations with PSV while soliciting community engagement, along with another that allows staff to receive other proposals for McKalla Place.

PSV is seeking to move the Crew to Austin in time for the 2019 MLS season, and have the club play two seasons at an existing venue in the area before the new stadium opens in 2021. However, no firm plans for relocation have been finalized. For now, the group is pushing for a council vote on August 9 to approve the term sheet and allow for negotiation and execution of a final agreement based on the term sheet.

Rendering courtesy Gensler Sports Practice.

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