Factbox: Understanding Major League Soccer’s offer to Austin
Major League Soccer’s Columbus Crew Soccer Club is contemplating a move from Ohio to Austin and has offered the city a deal to build a stadium.
Precourt Sports Ventures, the company operating the Columbus Crew, made the offer to the city government last week in the form of a 189-page development plan. The company wants use of the publicly-owned 23-acre McKalla Place property in northwest Austin not far from the Domain.
Two Austin public relations and advertising agencies, an Austin branding studio, an Austin commercial real estate firm, and an Austin law firm are already involved in the Precourt bid. Local business and sports groups are supporting the soccer stadium proposal, including Austin Chamber, the Greater Austin Hispanic Chamber, and Downtown Alliance.
Here are some of the terms of the proposal by Precourt Sports:
Free Use of City Land
Precourt is offering $1 per year for use of a 24-acre site known as McKalla Place. This land is currently used as a storage facility by the city’s water utility,
Construction of Stadium
Precourt Ventures proposes to invest an estimated $200 million in stadium development to build a 20,118 seat open-air stadium. Although the city would own the stadium built by Precourt and continue to own the land, it would be required to offer Precourt lease agreements renewable for a minimum of 60 years.
Debt Financing
Precourt would borrow $125 million in order to complete the stadium. Precourt has not publicly disclosed information about its planned debt financing, although it gave a briefing to city staff on the matter.
The club’s current financial outlook is unclear; it withheld information from its public proposal citing trade secrets.
Zero Property Taxes
Precourt would be exempt from property taxes. Precourt’s proposal contains no mention of how much it would pay in corporate tax on profits to the city, state, or county, if any.
City Pays for Services
Precourt’s proposal states, “The City shall pay for the development of all site preparation, remediation and off-site infrastructure as may be necessary for the project.” Austin would also pay all insurance costs for the stadium, including casualty insurance.
Other costs to the taxpayer will include the cost of providing “customary police, traffic control, fire prevention, emergency medical, street cleaning/street trash removal, and other similar City-based services, outside the Stadium, for all Stadium events.” The soccer club would cover costs of city staff deployed inside the stadium itself.
800 Part-Time Jobs at $12/hr
The stadium would employ about 800 part-time staff at $12 per hour and 100 front office staff at an average salary of $50,000 yearly.
Parking
About 1,000 onsite surface parking spaces will be built at the McKalla Stadium site, about a tenth of the number needed on game days. Precourt is not offering to build a parking garage. The proposal states that the remaining parking would be arranged with neighboring businesses, industrial parks, and neighborhoods. Pedestrian walkways in the area would need to be expanded to accommodate the flow of fans coming to and from events.
The Gracywoods and NorthPark Estates Neighborhood Associations have expressed concern that game days at McKalla place could result in parking overflow into their neighborhoods. They also say public transit capacity in their neighborhood is already strained. An analysis by engineering firm Kimberly-Horn estimates that each game day about 3,000 patrons would use public transit bus and rail to access McKalla Place.
Community Clinics & Donations to Non-Profit
Precourt is proposing to offer youth soccer camps and clinics as a service to the community.
In an effort to counter criticisms that the McKalla land would better be used for affordable housing rather than a stadium, Precourt is also proposing a partnership with non-profit Foundation Communities. The company will give half a million dollars to fund a housing development near McKalla place, plus $125,000 per year up to a limit of $4.3 million. This amount, however, is far less than a developer would invest in housing were the McKalla property to be re-zoned by the city for that purpose.
Precourt says that its investments will bring more customers to local businesses like the Domain. Precourt President Dave Greely says the Domain is “like a second downtown. It attracts the young millennials and has the demographics we covet.”
Teresa Mikulastick, a manager at Celis Brewery, endorsed the stadium in a letter saying, “As a brewery, we expect a nearby MLS stadium to be beneficial not only to our business, but also to other businesses in the area.”
