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Stadium agreement approval clears the way for pro soccer in Austin

Thursday, August 16, 2018 by Chad Swiatecki

Wednesday’s 7-4 vote to have city staff finalize and execute an agreement that will result in the construction of a professional soccer stadium on the city’s McKalla Place property in North Austin broke along expected lines.

The four City Council members who have most frequently questioned or objected to the proposal with Precourt Sports Ventures – Leslie Pool, Alison Alter, Ellen Troxclair and Ora Houston – came up short in the final vote as well as in multiple attempts to attach amendments to the city’s term sheet.

The agreement means Austin will become the home of the Columbus Crew SC soccer team beginning next year, with the team playing in a to-be-determined temporary venue ahead of the completion of the $200 million stadium in 2021.

The bones of the agreement have been set since late July, with PSV signing up to pay for the stadium with financing from JPMorgan Chase and then donating it to the city to remove any property tax burden, while paying $550,000 annual rent for the final 15 years of its 20-year lease. The team also agreed to a buffet of support for youth soccer programs and other charities and will make sure 130 units of affordable housing are built on the site.

The decisive vote was preceded by four hours of discussion and debate on a series of amendments submitted last week.

The most crucial of those was Pool’s failed attempt to have the final agreement come back to Council for one last approval, a requirement that PSV representatives said would have delayed relocation plans and possibly jeopardized the team’s move to Austin.

Also falling short was a move by Troxclair that would have elevated the annual rent on the stadium to more than $900,000, which she said is half of the property tax revenue the city would receive if the 24-acre parcel were to be commercially developed with any of the handful of proposals offered in the wake of the soccer negotiations.

“I understand that if we’re going to do a stadium there this may be the highest rent that we can expect them to pay, but the reality is we have to look at what the opportunity costs are,” she said.

“Math is math and the reality is that we have these other proposals on the table that are willing to not just pay full property taxes and rent but are willing to put significantly more money into affordable housing, soccer and green spaces, nonprofit contributions, and adequate parking. If the choice is do nothing or have a stadium there, then it’s a good idea to have a stadium there. But if the choice is have a stadium or something else that is going to provide more revenue to the city and greater community benefits, then that has to be a part of our conversation.”

Alter did succeed in passing a requirement that PSV will need to secure a performance bond to insure against every financial or other obligation in the agreement in case the company defaults or dissolves, with Pool, Troxclair, Houston, Mayor Pro Tem Kathie Tovo and Council Member Ann Kitchen voting in favor. City staffers called that requirement fairly unusual and said they are unsure how such a measure could be worded or enforced, with Adler expressing concern that the cost of that level of insurance may be unbearable for team ownership.

More successful were a series of amendments from Tovo, who repeatedly pushed back against attempts to move to a final vote because of concerns that the city was leaving too many issues unaddressed.

Some of Tovo’s amendments offered last week were folded into the revised base term sheet at the beginning of the meeting.

Over the course of several unanimous votes she won measures that will:

  • Require PSV to tell the city its plans for selecting local construction and operations vendors
  • Require PSV to work with the city to try to achieve a platinum environmental construction rating
  • Require PSV to explore how to maximize access to nearby nature trails on the site
  • Ensure the building code in place at the time of the stadium plan application is enforced, with no grandfather clauses to less restrictive conditions
  • Require PSV to explore how to offer public televised viewings of the games in gathering spaces outside the stadium

Tovo also succeeded with an amendment that requires the city and PSV to mutually agree on any ancillary development done on the site, a move that Pool voted against and Alter and Troxclair abstained from.

As it became clear that the issue was headed toward passage, each Council member took time to address the often-contentious nature of the discussion and negotiations since PSV first went public late last year with its intent to move the Major League Soccer franchise to Austin.

Mayor Steve Adler reiterated his hopes that a professional soccer team in Austin will help diverse cross sections of the city come together and bond with each other.

“The soccer team is paying for and building a stadium, and then they’re giving it to us for free and they’re paying us to use it. They’re delivering significant and much-needed community benefits, there are no public subsidies, and because the most probable alternative use would be for affordable housing, there is no loss of property tax revenue,” he said. “This city is excited about Major League Soccer, and I am too. I can’t wait until we’re all wearing the same jersey, celebrating the first championship in Austin.”

Rendering of the proposed soccer stadium courtesy of Gensler, TBG and CAA ICON.

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