Austin makes a deal for Major League Soccer

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austin makes a deal for major league soccer

The Austin City Council has struck a deal in principle to have the owners of the Columbus Crew build a $200 million stadium to relocate its Major League Soccer franchise to the 24-acre, city-owned McKalla Place in northeast Austin.

The council and Mayor Steve Adler, who in the last several days pressed for a deal, voted 7-4 to have city staff complete an agreement with the Crew owner, Precourt Sports Ventures.

Council members Alison Alter, Ora Houston, Leslie Pool and Ellen Troxclair, who largely failed in their attempt last week to sweeten the deal for the city, voted no at a specially convened meeting Tuesday.

“These people are building a stadium and giving it to us for free, and paying us rent to use it,” Adler said in his closing remarks before the vote. “I can’t wait until we are all wearing the same jersey and celebrating the team’s first championship.”

The timeline for relocation of the franchise remains in question because the city of Columbus and state of Ohio are suing the Columbus Crew and Major League Soccer, contending that the government entities should be allowed to void a move because taxpayer dollars have supported the club.

A judge in Franklin County, Ohio, has put the lawsuit on hold until at least September. Precourt principals for months have pressed the Austin council to approve a deal quickly so the stadium could be built in time for the club to open in spring 2019.

On Friday, Richard Suttle, the local spokesman for Precourt, said if a deal could be struck with Austin, the company was confident its legal difficulties in Ohio could be surmounted.

Pool dogged Precourt with questions about what she labeled the city’s “massive giveaway,” going so far as to visit Columbus this past weekend. Before the vote Tuesday, she said she remained convinced a major league soccer franchise wasn’t worth the $90 million to $175 million her staff estimated it will cost the city over the first 20 years of the contract.

While council members were able to wheedle another roughly $7 million in concessions in a five-hour discussion of amendments to the proposed agreement, Pool said a better deal did not mean a good deal.

“Cities have been getting fleeced for years by these deals,” she said.

Alter called the stadium deal a “want” rather than a “need,” and said she could not reconcile leasing city land for a stadium after the council approved asking voters to sign off on $250 million in borrowing, much of it to pay for affordable housing.

“I cannot accept giving away city-owned land to a private, out-of-town company for a soccer stadium,” Alter said before casting her “no” vote. “I am also uncomfortable not being able to review the final contract.”

Adler on Wednesday repeatedly cautioned the council to avoid adding “poison pill” amendments that might cause Precourt to walk away from a deal. While remaining mostly neutral throughout the process, Adler went all in on support for a soccer deal at the council’s regular meeting last Thursday.

Other council members who as recently as a week ago expressed doubts about a deal with Precourt congratulated one another for pressing for significant concessions. Council member Ann Kitchen disputed Pool’s contention that the deal was a giveaway and Alter’s contention that the terms of the deal remained unclear.

Council member Greg Casar, who successfully pressed Precourt to agree to take responsibility for getting at least 130 units of affordable housing built on the property, said he believed the deal had come a long way.

It was Pool who began boring in on the deal proposed for her district, back in early June. Precourt had originally offered to build the stadium at its own expense. In exchange, the city would lease the property back from the city for $1 a year for the length of the first 20-year lease, with the option to renew three times for 10 years each.

As Pool dug deeper, the council learned that Precourt was also asking the city to pay for almost $40 million in infrastructure improvements.

The council earlier this month asked city staff to negotiate harder with Precourt. Staff returned with the 30-page term sheet that included Precourt paying rent of $550,000 beginning in the sixth year of the lease, a delay that offset the company’s commitment to defray some of the infrastructure costs.

At the council’s insistence, Precourt also agreed to work with the city at some point to locate a train station to serve the development.  

“I think the staff were phenomenal stewards of the process,” council member Jimmy Flannigan said, before he cast his “yes” vote.

Mark Lisheron can be reached at [email protected].

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