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Questions of timing, community benefits linger over stadium negotiations

Friday, July 6, 2018 by Chad Swiatecki

With little more than a month before City Council is expected to formally consider an agreement to possibly provide city land for the construction of a professional soccer stadium, it seems one of the most important considerations is what constitutes a “community benefit.”

That was the term used repeatedly by Council members during a work session and full meeting at the end of June, the last of which saw Council vote 9-0 to have city staff and appointed legal help begin negotiations with Precourt Sports Ventures. The two sides are expected to reach an agreement in time for the Aug. 9 Council meeting, with PSV pointing out that it needs to know by early August if it can move ahead with its attempt to relocate the Columbus Crew team to Austin.

Community benefits mentioned by Council included scholarships and other support programs for local youth soccer teams, some component of affordable housing on the McKalla Place parcel in North Austin, and contributions to local nonprofits. Other possible considerations include a deal that would see PSV responsible for paying some amount of property taxes, a point that is avoided in the land use proposal it submitted to the city on June 1.

Multiple Council members said in meetings that they weren’t impressed with PSV’s starting proposal, setting the stage for negotiations with a tight clock and high expectations.

“They say it’s not enough, and my guys say it was a really good offer,” Richard Suttle, an Austin attorney representing PSV’s local interests, told the Austin Monitor. “I’m sure there’s somewhere in the middle where we’ll end, but we’re gonna have to sit down and identify what’s important to everybody. The clock is ticking, because in order to be playing in a new stadium here in March of ’21, and get started in a temporary stadium in March of ’19, … we’ve got to get going with getting the site locked up, get the engineering and designs started. The city doesn’t have to move forward (but should) unless they don’t want (Major League Soccer). Anthony (Precourt) has options, but he wants to be in Austin.”

Chris Ragland, chief operating officer of Noble Capital investment group in Austin, told the Austin Monitor that public deals for sports facilities are notably contentious and high-stakes because voters tend to become heavily invested in obtaining and keeping a sports team in their city.

“When you have a culture of fandom that is more interested in the ‘our team’ aspect of the deal than the underlying economics, this can lead to poor deal-making,” he said. “Like many areas in life, letting our emotions rule our decision-making process isn’t always helpful.”

Ragland said as a resident or professional, he’s not opposed to the city entering into a deal for a stadium, but he said that impacts on traffic, increases in housing prices in the surrounding areas and other quality-of-life issues tend to get overlooked in the analysis of economic impact.

He added that the tight time window provided by PSV is a factor that in other communities has resulted in stadium and arena deals that come to be seen as a bad bargain for the community.

“These deals are often very complex, and even experienced municipalities can end up negotiating a poor deal if they are not careful,” he said. “The joint-use and long-term obligations of facilities are what make these unique, in that it is difficult to predict how successful the private corporation will be in their endeavor.”

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