Editorial: Austin needs details to have a deal on MLS stadium

Aug 03, 2018
  • By Editorial Board

After months of public discussion and a round of negotiations, the proposed Major League Soccer stadium deal has improved considerably. But, without more details, it’s not clear this deal would fall in Austin’s win column.

The City Council should iron out specific commitments with Precourt Sports Ventures on parking, transportation and penalties for breaking the contract before deciding Thursday whether to proceed with a soccer stadium on city-owned land for the Columbus Crew SC. Council members should also provide a serious look — not just a passing glance — at rival proposals to develop the McKalla Place tract in ways that would deliver other community benefits.

Unlike many sports stadium deals, Precourt has offered all along to build its $200 million venue using private financing, not taxpayer-backed bonds. That’s an important protection for Austin residents.

City negotiators recently obtained an important concession: Instead of Precourt’s initial offer to pay $1 a year to rent city land for the stadium, the soccer franchise will pay $8.25 million in rent over the first 20 years. The city, however, would kick $2.5 million of that back into a maintenance fund for the stadium. That’s an expense we believe Precourt should fully shoulder.

PREVIOUSLY: Negotiate MLS stadium deal on Austin’s terms, not Precourt’s

Yet, the issue that has bedeviled Precourt’s plans from Day One — how to get 20,000 fans to and from a stadium with scant on-site parking — remains surprisingly unresolved. The “term sheet” reached by Precourt and city negotiators includes vague promises to “explore” options and “work together” on addressing traffic, parking and transit service to the site. This squishy language provides no protection to the neighbors whose streets could be overrun with game-day parking, and no safeguard against taxpayers having to foot the bill for the stadium’s transportation needs.

We understand that consultants must first conduct a traffic impact analysis to determine the exact road improvements needed. But the city should get firm commitments now that Precourt will provide a certain amount of off-site parking, and that it will pay for the improvements the traffic impact analysis recommends, minus any specific amounts the city already plans to spend on the nearby stretches of Burnet Road and Braker Lane.

We applaud Council Member Delia Garza’s call to identify funding sources for transit improvements, such as a $3 million payment from Precourt, $2 million from the city’s rent proceeds and a $1 surcharge on all soccer match tickets, as well as Council Member Ann Kitchen’s idea to provide free game-day transit service to anyone with a soccer ticket. While it will take time for Capital Metro to devise bus and MetroRail improvements to serve the site, it’s obvious that funding and rider enticements will be needed.

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The 20-year lease has three 10-year renewal options. Because sports franchise relocations are not uncommon, council members also need to see specific contract penalties for Precourt if the soccer club leaves Austin before the lease ends. The term sheet notes those provisions need to be hammered out, but as with the transportation and parking issues, there are no specifics.

We share Council Member Leslie Pool’s exasperation that the council is being asked to approve such a consequential deal on Thursday without seeing these details. Under a “negotiate and execute” arrangement, the council would authorize City Manager Spencer Cronk and his staff to work out the specifics and sign the contract without bringing the full package back to the council.

“I am not willing to go down that road,” Pool said at an Aug. 1 council meeting. Her stand is a principled one. Council members are stewards of the taxpayers’ money and, as Pool put it, “we are ultimately responsible for the elements of this contract.”

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Council members should fully consider other developers’ proposals to build housing and retail at McKalla Place. Precourt’s proposal includes the space, but only a fraction of the funding, for a nonprofit to build 130 units of affordable housing. Precourt has also insisted on a deal in which it would not pay any property taxes, depriving not only the city but Austin schools, Travis County and other taxing districts of millions of dollars of revenue in the coming decades. Austin deserves to see if other developers can deliver more to the community.

Over time, Precourt has offered a more detailed package of nearly $96 million in direct community benefits, including nearly $4.8 million toward affordable housing and $3.2 million in cash payments to charities, all over 25 years.

We share the objections made by Council Members Alison Alter and Kathie Tovo that only boys will benefit from the largest piece of the community benefits package: the $48 million for a youth player development academy, which helps competitive players earn college scholarships and professional contracts. Precourt told us the academy is for boys only because MLS is a men’s league. But if Precourt is truly interested in giving back to the community, it must give young women in Austin the same opportunity to step up their game and compete for college scholarships and a shot at the National Women’s Soccer League.

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After private development of city-owned land at Seaholm and Mueller didn’t deliver all the public benefits residents expected, Austinites have rightly pressed for the best deal at McKalla Place. We have consistently called for a package that addresses parking and traffic, with Precourt providing meaningful community benefits based on the value of the land. The question of whether this stadium is the best deal for Austin can only be answered in these details.

Precourt is racing against the clock for a decision on moving to Austin for the 2019 season.

Now’s the time for it to take its best shot — by offering concrete details, not fuzzy promises.