Through a decision made on Tuesday, Travis County commissioners left the door open for a legal challenge to the Austin MLS stadium proposal’s tax-exempt status.
After considerable debate, the Austin City Council voted last week to approve the term sheet for a McKalla Place land lease, clearing the way for Anthony Precourt to finance a $200 million MLS stadium for relocating Columbus Crew SC. Although several amendments were made before final approval, the agreement between Austin and Precourt Sports Ventures still calls for the city to retain ownership of McKalla Place. This means that the stadium and surrounding amenities on the site will not be subject to property tax, but that the city will instead collect rent from PSV through a lease agreement.
The issue for Travis County is whether the agreement prevents it and other taxing entities from collecting property tax on the project. On Tuesday, the commissioners voted “authorize the county attorney to preserve the county’s right to challenge the tax-exempt status of the stadium company’s use of city property,” and ““pursue negotiations with the city and other local taxing entities on expectations for preserving taxable value in the redevelopment of publicly owned real estate.”
It remains to be determined whether this leads to a legal challenge from the county attorney, but there are concerns that the proposal does not fit state law requiring that property tax-exempt development on publicly owned land serve a public purpose. Thought the agreement between PSV and the city tries to emphasize public benefits from the proposal, some Travis County commissioners are skeptical that it meets the criteria. More from the Austin American-Statesman:
“The Stadium will be owned by the City and used for the enjoyment, health, comfort, and welfare of the public,” the term sheet states under a section on property taxes.
The terms also say the city will “reasonably cooperate” with Precourt in asserting its right to the tax-exemption and acknowledges the possibility of a challenge.
It states the company and affiliates have the right to “assert, insist upon, continue, and restate this intent in any agency, forum, or court having jurisdiction and at which the question may arise or be presented.”
Commissioner Brigid Shea, in whose precinct the stadium would be built, said she first raised the issue because she believes tax exemptions should only be offered in rare circumstances when a development has a clear public benefit, such as affordable housing.
Last week’s vote by the Austin City Council approved the term sheet, but it is still up to city staff to turn that term sheet into a final lease. The city is not on the hook for any part of the stadium construction; Precourt will finance it privately.
Rendering courtesy Gensler Sports Practice.
RELATED STORIES: Austin Approves McKalla Place Lease for New MLS Stadium; On Eve of Austin MLS Vote, Mark Wahlberg Expresses Interest in Crew; Why the Austin MLS Decision Matters; Austin MLS Stadium Vote Delayed; Councilmembers Call for Revised Austin MLS Stadium Terms; Save The Crew Unveils Proposed Columbus Crew SC Stadium; McKalla Place Development Proposals Unveiled; City Council Holds Special Meeting on Austin MLS Stadium Plan; Mayor Backs Austin MLS Stadium Proposal; Revised Austin MLS Stadium Proposal Terms Released; City Council Could Discuss Austin MLS Stadium Proposal Next Week; Group Eyes Public Vote; Austin MLS Stadium Information Session to be Held This Week; Austin City Council Passes McKalla Place Resolutions; Affordable Housing Added to Austin MLS Stadium Proposal; Thursday Important Day for Austin MLS Stadium Proposal; PSV: Columbus Crew SC Move to Austin Could be Jeopardized by McKalla Resolution; Austin City Council Debates McKalla Place MLS Stadium Pitch; Offer Made for McKalla Place Development; Austin MLS Stadium Plans Unveiled; New Information Surfacing on Austin MLS Stadium Pitch; Who Should Pay for Light Rail at New Austin MLS Stadium?; Site Concept Unveiled for Austin MLS Stadium at McKalla Place; Judge Sets 90-Day Toll in Columbus Crew SC Lawsuit