Land giveaway to prospective Austin soccer club valued at $29.5 million
Land that the Austin City Council is considering giving away to a professional soccer club for a period as long as 60 years is valued at $29.5 million, according to a 2016 appraisal carried out for the city confidentially by private appraisers.
Mayor Pro Tem Kathie Tovo said yesterday she is “really interested” in moving forward with a deal with Precourt Sports Ventures, whose owner Anthony Precourt wants to move his club to Austin from Columbus, Ohio.
Thus far only two council members look like they might oppose the plan while others want more concessions from Precourt in exchange for their support.
Precourt Ventures has formally proposed that the city give the company exclusive rights to a 24-acre site for the stadium for a minimum of 60 years for essentially nothing — $1 per year — in return for building a stadium on the land and relocating the Columbus Crew soccer club to Austin. By leasing the property rather than buying it, Precourt dodges an estimated $2.3 million in one-time ad valorem tax to local jurisdictions and avoids paying annual property taxes.
If the city were to sell the land to another buyer it could raise $29,500,000, according to an appraisal carried out by Paul Hornsby and Company Appraisers. This valuation was made in July 2016, meaning that the property could fetch an even higher price today, assuming that the appraisal is approximately correct. A group of developers has reportedly already made an offer for the property in an effort to counter Precourt’s offer.
Hornsby Company’s appraisal of the 24.2-acre McKalla Place Property relies on a sales comparison approach that looks at comparable property sales nearby. The study cites the 2016 sale of a nearby 6.1-acre property at 2501 W. Braker Lane for $7m, equivalent to $1.14m per acre. Another nearby property fronting MoPac Expressway for 4.3 acres sold for $10.5m in 2016, equivalent to about $2.4m per acre. A little farther to the south, 2.3 acres on Burnet Road sold for $5m in 2015, equivalent to $2.1m per acre.
“Typically smaller sites will sell for a higher unit price because their lower purchase price allows for more buyers and hence greater demand. Therefore, based on experience with this property type, a size adjustment of 10% for each doubling in size was applied,” wrote appraisers Paul Hornsby and Eli Hanslik.
The appraisers carrying out the report did so at the request of city officials. They certified that they themselves had no prospective interest in the property. Hornsby and Hanslik said that the McKalla place site is a “superior location” owing to good visibility on Braker Lane and Burnet Road as well as immediate access to Capital MetroRail.
A ground rent analysis included in the same document says that the property could generate nearly $2 million per year in lease income if it were used for that purpose. They concluded based on existing zoning “the highest and best use is for mixed-use development.”
Kathie Tovo, who represents Austin’s central downtown district, argues that mixed-use developments or affordable housing could be built elsewhere whereas McKalla Place uniquely well-situated to serve as a stadium site. “I’m really interested in moving forward… there are other sites that would be great for affordable housing. There are not other sites necessarily that would be appropriate for a stadium,” Tovo said at a council meeting Tuesday.
On the other hand, Council Member Leslie Pool, whose district includes the land where the stadium would actually be situated, says she will attempt to introduce a resolution on June 28 opening the land for open bidding so that the city can weigh Precourt’s soccer offer competitively alongside other prospective bids. “We haven’t yet decided whether a stadium is appropriate for this site, because we don’t yet have sufficient information,” she said yesterday.
Alison Alter, representing a west Austin district, sides with Pool in saying more analysis is needed on the proposal.
Remarks by other council members suggest they are open to considering Precourt’s offer but may want further concessions. Council Member Pio Renteria yesterday implied that he might support the soccer stadium if the offer were improved to include funding for building a new rail stop and other Capital Metro infrastructure that would be necessary to bring fans to and from matches at the stadium. Precourt’s original proposal says the city must cover such costs.
Such infrastructure costs are questioned in a critical memo released by Pool ahead of yesterday’s council meeting. For instance, she questions why costs for expanding roads and sidewalks have not been considered in an analysis by B&D Ventures, commissioned by the city. Pool has inquired into a potential conflict-of-interest situation involving B&D Ventures, asking, “Has B&D Venues committed that they would not participate in any activities related to an Austin soccer stadium, in order to avoid the appearance of a conflict of interest related to their economic impact analysis?”
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 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,” Precourt’s proposal says.
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.