Term sheet lays out stadium deal for rent, possible rail station
Monday, July 30, 2018 by Chad Swiatecki
The term sheet for a proposed professional soccer stadium on city land ups the financial outlay of the Major League Soccer team’s to the city, with the possibility of bringing a metro rail line to the property as an ongoing discussion topic.
The two sides are moving ahead with plans to reach a formal agreement by the Aug. 9 City Council meeting so that Precourt Sports Ventures can begin negotiations on a temporary venue beginning in the spring, along with securing other approvals and deals – such as a practice site location – related to relocating the Columbus Crew to Austin. The term sheet gives until Oct. 9 for termination of any agreements if certain criteria are not met, with possible extensions to that deadline if “good faith” negotiations are ongoing.
A public hearing scheduled to take place Aug. 1 will be the next chance for Council to hear from the public on the deal terms as they currently stand.
The 25-page term sheet is a departure from PSV’s June 1 proposal in many ways, the biggest being that the company would begin paying $550,000 a year in rent on the property beginning in 2026, or five years after an expected 2021 completion.
The site would also feature an acre given to development of 130 affordable housing units, but there is no certainty as of now on the creation of a rail station near the 24-acre parcel, with both sides saying they’d “work together to explore third party and other financing sources” for the station.
If the stadium is constructed, PSV would give the structure to the city in a move that would prevent it from having to pay property taxes, though the new rent structure on the 20-year lease is a considerable increase from the $1 per year it had initially proposed.
Adler said he’s pleased the terms prevent city money or resources from being used to prepare or develop the site, which protects Austin from any losses if PSV’s legal case in Ohio to block the team’s move endangers the deal.
“Now we’ll have to see what my colleagues think about it,” he said. “As a Council and a city we should use the assets of the city to drive value for the community, and that doesn’t always mean whatever the greatest financial value may be. We see that with what we did to build the Central Library and the Long Center.”
Adler said Council and city staff will need to examine the wording on certain portions of the term sheet, including a point that says the city “shall not develop, finance, or incentivize the development of any other professional soccer stadium in excess of 1,000 seats in the City that will compete with the Stadium.” That language could most likely come into play regarding the city-owned land at the Travis County Expo Center that has been eyed for redevelopment of a stadium and arena for professional sports.
Council Member Leslie Pool said the yearly rent won’t match the property taxes the city would realize from more traditional development of McKalla Place, and she said she wants to get a clear understanding of how the agreement will be altered in the weeks leading up to the Oct. 9 deadline.
“My initial takeaway is it’s still a massive giveaway, and even though there is rent coming in you still have Austin schools, Travis County and other entities that have nothing,” she said. “There’s still lots of vague language, rail is mentioned but just indicating them as a possible partner, and when it comes to shuttles they’re banking on Cap Metro to help out a lot. There needs to be serious detail and clarity, and this is not a deal I would support.”
This story has been corrected to reflect the timeline for an expected agreement between the city and Precourt Sports Ventures. An earlier version misstated the agreement termination date as the deadline for City Council to vote to approve the deal.
Rendering of the proposed soccer stadium courtesy of Gensler, TBG and CAA ICON.
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