The initial proposed terms of a deal between the city and Precourt Sports Ventures to build and operate a Major League Soccer stadium in Austin have been released, KUT reported Saturday. Under the terms of the proposal, according to the station’s website, Precourt would be responsible financing the development of the stadium on city-owned land at McKalla Place (including the payment of those taxes and fees); the city would own the land and the stadium and lease it back to Precourt.
Initially, Precourt and the city would sign a 20-year lease, KUT reported. Precourt would not pay rent for six years, after which it would pay $550,000 annually. The company would not pay property taxes on the stadium, estimated to cost $190 million, as the facility is a rental—although the arrangement for commercial tenants to pay some or all of property taxes on spaces they lease is relatively common when the contract is between privately owned entities.
Precourt currently owns the Columbus Crew soccer team and has been positioning to move it from Ohio to Texas for more than a year. Doing that has not been particularly easy for Precourt. According to ProSoccerUSA, Columbus and Ohio sued Precourt and U.S. Major League Soccer under an untested law that states that “any professional sports team owners receiving public financial assistance must give interested parties a chance to purchase the team before it can be moved.”
A March Forbes article noted that benefits that Columbus and Ohio have provided the Crew include “approximately $5 million in state-taxpayer-funded improvements to team parking facilities, a state property tax exemption for the land on which the team’s stadium sits, a land lease from the state at a below-market rate, more than $300,000 in city-taxpayer-funded reimbursements of team costs in moving portions of a storm sewer and constructing a water line, and a Tax Increment Financing and Economic Development Agreement with the city of Columbus to increase access to the team’s stadium, currently costing $1.3 million in tax revenue.”
A March report on Columbus’ WOSU Public Media site quotes a Precourt statement that the lawsuit “chooses to ignore both the facts and the law,” and refers to the company’s earlier comments about the Crew being “at or near the bottom of MLS in both attendance and corporate support” and its “calls for a new downtown stadium in order for the Crew to remain viable in Columbus.”
Other major points of the proposed Austin deal, according to KUT, include:
One acre set aside for 130 affordable-housing units on the site’s southeast side
An agreement to work together to find financing for a MetroRail station next to the stadium
The inclusion of eight acres of public green space, open space and performance areas
The agreement that Precourt and the city both contribute to the Capital Repairs Reserve Fund after six years
The requirement that the team include “Austin” in its name.
KUT also reported that the terms require that the city and Precourt negotiate and approve an agreement by Oct. 9 and that the next step is a special City Council meeting on Aug. 1 to hear about the proposal and take public comment.
• Judge declines appeal in Columbus lawsuit against Precourt, league [ProSoccerUSA]
• With Lawsuit, Columbus Seeks To Keep Crew From Leaving Like Art Modell’s Browns [Forbes]
• Crew Owner Pushes Back Against Lawsuit to Keep Team In Columbus [WOSU]