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Council OKs stadium negotiation and other proposals, with early August deadline

Friday, June 29, 2018 by Chad Swiatecki

Austin will move forward with negotiations on a deal that could bring a Major League Soccer stadium to the McKalla Place property in North Austin, with an early August deadline to reach an agreement.

City Council approved a pair of soccer-related resolutions Friday morning at the meeting that began on Thursday, following more than six months of studies and proposals prompted by the owners of the Columbus Crew SC team’s attempts to relocate the team to Austin.

One proposal, approved 9-0, with Council members Ora Houston and Ellen Troxclair off the dais, instructs the city manager to begin negotiating with Precourt Sports Ventures and outlines preferred objectives such as maximum financial return for the city, responsibility for construction and development costs and minimum design standards for the proposed 20,000-seat stadium.

Item 60, approved 8-1-1 with Council Member Pio Renteria voting in opposition, Council Member Delia Garza abstaining and Troxclair off the dais, instructs the city manager to create a process for the city to accept alternative development proposals for the site, which will be used in evaluating the opportunity costs if the city were to opt for a stadium instead of a more traditional land use.

Council members repeated during discussion time that the votes were a step forward in the process that could result in Austin’s first professional sports team, while emphasizing the need for significant community benefits in a final deal proposal that is expected to be voted on at the Aug. 9 meeting.

PSV’s initial proposal sought a $1-per-year lease on the property and no property tax responsibility.

“We should treat this like any other economic incentives deal,” Mayor Pro Tem Kathie Tovo said. “We have put investment in with our public land and we should treat it like any other economic incentives. Those community benefits really need to outweigh the public investment. We’re going to look very close at this arrangement and have a very clear understanding from our staff about the property taxes that we’d be forgoing.”

Council Member Leslie Pool, who helped craft the resolution to accept alternate development plans, said city staff has clear expectations on the deal points needed for her and other Council members to consider approving a deal after the July recess.

“What’s become clear over the last week is we all want the best deal for the city,” she said. “It’s not a secret that I was less than impressed with PSV’s first offer. I also recognize it is just that, a first offer. Taken together, items 60 and 130 put the city in the best possible negotiating position considering the accelerated timeline.”

The amended version of Item 60 added inclusion of a fully funded MetroRail station with associated infrastructure as a possible alternative development component along with affordable housing, creative space, parkland and mixed-use projects. The resolution instructs the city manager to give Council a status update or recommended action resulting from the submission process by Aug. 9.

A Thursday memo from city staff regarding Item 60 delineated how the city will go about accepting development proposals without opening a full solicitation process. Plans will be accepted through Aug. 3 through the city’s website, with submitted plans made public in their entirety.

PSV announced in October an interest in relocating the team to Austin after failing to secure a deal for a new downtown stadium in Columbus.

The business initially targeted a pair of city parks – Butler Shores and Roy G. Guerrero Colorado River Park – for the stadium site but was met with community resistance and shifted its focus to McKalla after a city report identified that tract as the city-owned property that was most likely able to accommodate a stadium.

Precourt has released a series of studies touting the potential economic and social impact of bringing the team to Austin, with $326 million projected over 25 years. That number includes $234 million in wages, $6.25 million in sourcing to local companies, $4 million in donations to nonprofits and $1.35 million to hospitality operators at the stadium.

On June 1 the city released its initial analysis of McKalla site, finding it to have the appropriate zoning and utility capacity to serve the proposed stadium. Also that day PSV released its formal proposal for the site, which would see a $200 million privately financed stadium built and then given to the city in exchange for a $1-per-year lease and no annual property tax charges for the team.

Community activists in neighborhoods near McKalla have criticized the proposal for lacking significant on-site parking, underutilizing a city asset and bypassing a comprehensive process for other developers or business interests to create proposals for alternative development projects.

Earlier this month a pair of proposals from two Austin development groups were presented at a meeting of the Gracywoods Neighborhood Association, both offering to buy or lease the property to build a mix of retail, office space and affordable and market-rate housing.

One of those proposals was conceived in 2016 when the city appeared to be moving toward opening the McKalla property up for a commercial development project. A city-commissioned audit of the property at that time stated that McKalla Place would be valued at $29.5 million if developed with mixed uses. The former industrial site is valued at $9 million by Travis County in its current unimproved state.

As the issue has moved forward in Austin, PSV has continued to fight a lawsuit filed against the Crew owners by the city of Columbus and state of Ohio. The suit seeks to invoke the “Modell Law” that was passed by Ohio lawmakers to prevent sports teams that use public facilities from moving without giving six months’ notice and giving local interests an opportunity to purchase the team rather than relocating it.

Artist’s rendering courtesy of Precourt Sports Ventures.

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