We now have a sharper picture of the benefits a Major League Soccer franchise could bring to Austin, particularly in terms of jobs and sales tax revenue, if a privately-financed stadium is built at city-owned McKalla Place.
But two recent reports — an analysis by city staff and a detailed pitch by the owners of Columbus Crew SC — still leave many holes in calculating the costs for Austin taxpayers.
Precourt Sports Ventures, which is pushing for a City Council commitment by the end of this month to proceed with a stadium deal, is asking the city to keep the building off the tax rolls, waive permitting fees, cover insurance premiums, pay for nearby road improvements and pick up the tab for some police and traffic control services on game nights — without either party knowing what that would cost.
The council can’t make a responsible decision based on such a lopsided ledger.
Taxpayers need a fuller sense of the costs before the city can decide whether to commit its land and other resources to the venture.
Precourt officials told us they’re working to provide as many details as possible to the council this month, with the hope the council on June 28 will direct the city manager to negotiate with Precourt. Under such a scenario, a package with full details of each side’s costs would come back to the council for a vote later this summer or fall, a tight timeline to bring the soccer club here for its 2019 season, as Precourt wants.
A full assessment of transportation needs is especially important, as taxpayers have been burned before. Travis County commissioners decided last year to borrow money to improve a couple of public roads near the Circuit of the Americas, infrastructure that should have been addressed when the racetrack was built in 2012.
While Mayor Steve Adler has indicated a desire to proceed with soccer negotiations at McKalla Place, Precourt’s numbers so far haven’t won over Council Member Leslie Pool, whose district includes the 24-acre site.
“It doesn’t pencil out,” Pool said. “It’s not even half-baked.”
“They’re looking to shift the costs to taxpayers while they get all the benefits,” she added.
With scant parking planned on the site southeast of Burnet Road and Braker Lane, Precourt hopes fans could access roughly 10,000 parking spaces owned by neighboring entities, chiefly the Domain. But none of those entities are on board yet.
Political consultant Mark Littlefield, who is working with Precourt, said the final package negotiated with the city would include written commitments from the parking lot owners and a detailed plan for shuttling fans to the stadium or providing them with safe walkways.
To be sure, the latest reports by city staff and Precourt point to the perks of Austin landing its first professional sports franchise, beyond the important intangibles of bringing the community together and elevating Austin’s reputation on the world stage.
Construction of the 20,000-seat stadium, a $200 million undertaking that Precourt would fully fund, would generate $54.2 million in economic activity within the city, plus $49 million in wages for more than 900 workers, according to an analysis by city-hired consultants Brailsford and Dunlavey. The impact grows to $88.4 million in economic activity, plus $74.4 million in wages for more than 1,500 workers, when the scope widens to include all of Travis County.
The consultants estimated once the stadium opens, it would generate $25.6 million a year in economic activity and $22.1 million in wages for workers within the city, both at the stadium and other businesses that benefit from the influx of fans. Looking at Travis County as a whole, the economic impact would be $31.6 million per year plus $30.7 million in wages, according to the consultants. Precourt’s proposal indicates it would have about 800 part-time stadium workers, each working about 4-5 hours per game, earning an average of $12 an hour.
Precourt has added other perks, including donating about $4.8 million over the next 25 years to Foundation Communities, a nonprofit that provides affordable housing, as well as donations and fundraising opportunities for other charities.
The tax revenue from the stadium, however, would be relatively small. First-year operations would net the city and Capital Metro nearly $350,000 apiece in sales taxes, plus an estimated $322,000 for the city from the hotel tax paid by overnight visitors attending games and $58,000 in mixed beverage taxes.
Precourt would pay considerably more in property taxes if it retained ownership of the stadium it wants to build. But Precourt wants to give the stadium to the city, ensuring this valuable amenity would stay off the tax rolls.
We recognize the largely empty McKalla Place tract is not generating any revenue, tax or otherwise, in its current state. But before the council decides how that community asset will be used, we deserve to know the market value of the property, which a previous developer’s appraisal put at $29.5 million, as well as the likely amount of property taxes that would be forfeited if the city took ownership of the stadium, to see whether the deal is a good tradeoff for taxpayers.
Noting the city had discussions a few years ago with at least two developers interested in the site, Pool said she is working on a resolution for the June 28 meeting that, if approved, would allow anyone to submit a proposal for the tract.
But the unfortunate reality now exists: The divergent negotiations staff had with those developers and now with Precourt, which looked at McKalla based on the city’s recommendations, will end with someone feeling jilted.
If Austin is serious about soccer, it should cautiously proceed with negotiations with Precourt — and sign a deal only if it becomes clear the numbers will be a winning score for the city.