Austin council tells staff more work is needed on soccer proposal

To judge by the dozens of negatively charged questions directed at city staff during a special meeting Wednesday, the Austin City Council is nowhere close to voting on an agreement with Precourt Sports Ventures to build a $200 million major league soccer stadium on the city’s northeast side.

Led by Leslie Pool, council members expressed surprise and disappointment about a deal hammered out with Precourt by staff and a sports development consultant, Brailsford and Dunlavey. Pool had derided the original offer by Precourt as a “massive giveaway.”

To complicate matters, the council learned earlier this week that a developer, Capella Capital Partners, along with the owners of the Circuit of The Americas, has offered a deal to Precourt to build a soccer stadium on a racetrack property on the city’s southeast side. Circuit of The Americas is part of an international network of Grand Prix and Formula One auto racetracks.

Capella’s proposal is one of several proposals for the 24-acre city-owned McKalla Place property expected to be presented to the council at a second special meeting scheduled for next Tuesday.

Precourt has been pressuring the council to vote at its regular meeting next Thursday in the hopes of moving its MLS team, the Columbus Crew, to Austin by next spring. But several council members Wednesday said too many key elements of the agreement had not been resolved.

“How in the world did you arrive at an agreement with so many inconclusive items and expect us to vote on this?” Pool asked, directing her comment to staff. “I don’t think we’re anywhere near executing an agreement.”

City staff and their consultants presented what they said was a deal more favorable than most negotiated by other cities for a Major League Soccer franchise. Staff estimated Austin’s taxpayer investment would be $69 million over the 20-year life of the contract. Denver and Kansas City, with comparable MLS stadiums, committed more than $160 million each in public money.

(You can see the entire term sheet here.)

Precourt’s original offer called for the city to retain ownership of the land and the stadium, and lease it to Precourt for $1 a year. Precourt has now agreed to pay an annual rent of $550,000 beginning in the sixth year of a 20-year contract. The payment would be the second highest among recent MLS agreements.

At the insistence of the council, Precourt offered space on the site for 130 units of affordable housing, unlike any other agreement in Major League Soccer.

“I think the City of Austin has negotiated this to be as favorable for a city as PSV could stand to do,” Chris Dunlavey, president of Brailsford and Dunlavey, told the Austin American-Statesman.

The council sent staff back with a list of requests to make the deal more favorable to the city. Members particularly focused on two areas — the affordable housing and transit components — that have preoccupied them for several years in deliberations citywide.

Precourt’s offer sets aside just one acre of the site for 130 affordable units, with no explanation for how that high-density development might be possible and no involvement in the actual construction. Instead, Precourt would contribute $500,000 and another $125,000 a year to the project for the length of the contract, according to the term sheet.

Council members Delia Garza and Ann Kitchen, chairwoman of the council’s Mobility Committee, expressed dismay that the tentative agreement included no funding commitment for transit to and from the stadium.

Several members strongly supported pressing Precourt to fund a rail station at the site at a cost to the company of $13 million. City staff’s term sheet leaves that station still to be negotiated.

Garza on Wednesday asked that Precourt promise $3 million to the region’s transit provider, Capital Metro. The city would also set aside $2 million from the projected stadium rent for Cap Metro and add a $1 transportation surcharge on every ticket sold for soccer matches.

“I have concerns and the biggest one for me is what I had hoped to be an investment in public transit,” Garza said.

Council members also expressed concern that the details of an estimated $96 million in community benefits purportedly to be derived from the development were still open to negotiation.

Half of the benefit total — $48 million — would come from the establishment of a soccer development academy to train gifted young Austin soccer players. Council member Alison Alter, noting that Precourt’s promotional material for the academy features photos only of boys, said she hoped girls would get an equal share of attention and that the academy would not serve solely as training for future players for the franchise.

The audience Wednesday was small, and most of those who addressed the council opposed any deal between Precourt and the city. Bill Bunch, longtime activist and executive director of the Save Our Springs Alliance, challenged the council to direct its energies and tax dollars to greater needs like affordable housing.

“It takes my breath that an agreement is on the table in this form,” Bunch said. “You’re settling for pennies while giving away millions of dollars. Please reject this boondoggle that will live in infamy.”

Although unlikely, the deal proposed at the Circuit of The Americas complex would solve all of the council’s soccer problems. COTA chairman Bobby Epstein told the Austin Business Journal his company would offer the necessary land for the stadium at no cost. All necessary infrastructure, including parking for 20,000 vehicles, is already there.

Capella, however, didn’t offer any joint venture to Precourt before Epstein announced that a joint venture had been offered, according to Precourt’s Austin lobbyist, Richard Suttle.

“They don’t have a team, and one of their proposals shows they have no understanding of MLS or PSV,” Suttle told the Statesman. “I can’t comment further on their proposals or abilities because I’m unaware of anything they have built or developed to this scale.”

Capella partner Neil Francois told the council Wednesday his company intends to submit two proposals, one for a mixed-use development and a professional soccer stadium at McKalla Place, and one for a stadium at Circuit of The Americas.

At least three other developers have expressed their intention to present alternative proposals to the council at its special meeting Tuesday.

Mark Lisheron can be reached at [email protected].