Austin, the eleventh-largest city in the United States, is by far the largest without a professional sports franchise. If you skip Fort Worth (to whom we’ll award joint custody of the Dallas teams, especially the ones that play in Arlington), it’s alone among the twenty biggest cities in the country in that regard. Sports fans can watch UT’s various teams, but not everyone in the city has a relationship to that institution, and the lack of pro sports has long been a factor in Austin’s identity. On Wednesday, though, Austin’s city council took a major step to change that, voting to approve a stadium deal with Precourt Sports Ventures, the owner of Major League Soccer’s Columbus Crew.
Rumors of the Crew’s interest popped up in October 2017. Sports Illustrated reported that Precourt, frustrated that Columbus leaders were slow to approve plans for a new, publicly financed stadium in the city’s downtown area, would be seeking an arrangement like that in Austin—a city that had been snubbed by MLS in a list of viable expansion cities a year earlier.
It seemed, at the time, a familiar story. Franchises frequently flirt with sports-starved cities in order to extract concessions from their current homes. Most of the time, those talks go nowhere. The owners that planted the story get the current city to pony up; the city they talked up sees its viability as a sports destination boosted a little, and everything returns to normal. (No city knows this better than San Antonio, which has been used as leverage among NFL and MLB franchises to the point of exhaustion over the years.) Austin, for its part, seemed interested in the Crew, but leaders in the progressive capital were cautious to avoid coming off as too thirsty—they’d talk about locations, and be happy to host the Crew, but Mayor Steve Adler made clear early on that his city wouldn’t be financing a stadium.
Over the next ten months, as Austin played hard to get, a few things became clear: Precourt desperately wanted to come to the city, regardless of what the company was being offered in Ohio, and there was enough ambivalence around the idea among city leaders that the terms of any deal would be pretty different from the usual stadium deal.
The chain of events was something to watch. Precourt indicated that they wanted a downtown stadium, and the city released a study in December to identify city property that could house one. The company would pick a location, city council would argue about whether that was a good place for a stadium, the legitimate hesitation would scare Precourt into picking a different location rather than blow up the whole deal, and the process would repeat. The list included two locations in Central Austin, Butler Shores on South Lamar and Guerrero Park on East Riverside. Butler Shores, a lakefront spot near Zilker Park, was PSV’s favorite site—but its location in a district with a lot of wealthy Austinites who’d prefer a stadium not pop up in their backyards made it an effective non-starter. By January, it was off the table.
The company focused its interest on its second-choice location, Guerrero Park. That site, located in a gentrifying part of East Austin, grew contentious, too. “Butler Shores was taken off, and now it’s like it’s all right to put it in Roy Guerrero,” Susana Almanza, director of neighborhood group PODER, told the Austin American-Statesman at the time. “Where’s that equity?” Declaring that a public park in a neighborhood full of wealthy white homeowners was off-limits, but that a public park in a neighborhood full of working-class Latino families would be acceptable, was a tough position for city leaders to hold, and Guerrero Park was removed from consideration in February.
City councilors began touting a non-park piece of city land, called McKalla Place, in far North Austin instead. Precourt president Dave Greeley, who had come to town hoping for a publicly financed downtown stadium, had argued that “short of drone deliveries, I’m not sure how you get fans in there” back when they were holding out hope for Guerrero Park. But Greeley seemed convinced by arguments that a site near the outdoor mall The Domain could effectively be considered to be in Austin’s “second downtown.”
The exact reason why Precourt’s leadership has been so hot on Austin is unclear. Anthony Precourt released a statement last year about the city, noting that “Austin is the largest metropolitan area in North America without a major league sports franchise. Soccer is the world’s game, and with Austin’s growing presence as an international city, combined with its strong multicultural foundation, MLS in Austin could be an ideal fit.” And the extent to which his company was interested in Austin became clear in January, when it was revealed that, when he purchased the Crew in 2012, he’d had a clause written into his contract that he could relocate the team without league approval—but only if he was moving to Austin. Whatever it was about Austin that captured Precourt’s imagination, the company was fairly locked in.
That gave the city a lot of leverage. In addition to getting Precourt to give up on a downtown location—considered a deal-breaker for expansion teams entering MLS—and writing off public financing from the beginning, Austin began pushing for more out of the company.
The term sheet submitted by PSV to the city at the end of July stands in fairly sharp contrast to deals like the one that the Texas Rangers got voters in Arlington to approve to replace Globe Life Park. In Arlington, the city agreed to pay $500 million toward the construction of the stadium; they agreed to deliver all parking and admissions taxes paid by fans directly to the team; they agreed to let the Rangers retain the naming rights of the stadium (valued at $12 million a year, for thirty years); and agreed to $30 million worth of personal seat licenses. WFAA estimated the stadium’s total cost to taxpayers to be as much as $1.67 billion.
Precourt’s term sheet is a lot less of a giveaway—and throughout the process, the city kept pushing. The company gets the land to build the stadium; they then agree to donate the stadium back to the city, to avoid paying property taxes on the land (which received an offer from a developer in June worth $22.5 million). Instead, they commit to paying $550,000 in rent to the city every year after the fifth year after the project’s completion, estimated to be 2026. (A proposal, rejected by the city earlier in the summer, would have seen the company pay just $1 in rent for the life of the lease.) The lease runs twenty years, with three ten-year renewal options. (The previous proposal would have run for eighty years.) If the team moves away from Austin, they agree to pay a $1 million per-year fine to the city for each year remaining on its lease. The deal also includes 130 affordable-housing units, and a commitment, with financial penalty for failing to meet it, to contribute $3 million toward a rail station near the site. (A previous proposal treated these as good-faith promises.) Giving up the property taxes that another project might provide to the city isn’t insignificant, but compared to other stadium deals—and to the various deals that Precourt sought—it’s a win for the city. (The question of whether all of this will actually bring the Crew to Austin is as yet unsettled—a lawsuit in Ohio could potentially force Precourt to sell the team to a local owner, but that’s a question for courts in another state.)
Of course, a lot of the debate over the McKalla Place project revolved around the question, Is being better than a bunch of terrible, exploitative stadium deals in other cities actually a win for Austin? Austin gave away a chunk of land worth $22 million or more; the Crew will have to play at McKalla Place for the next 45 years for the city to make that back in rent. It lost the property taxes it could have collected on that land, in exchange for what the Austin Monitor describes as “diffuse economic benefits,” as determined by a third-party analysis: $54.2 million in construction activity, $25.6 million in recurring impacts, $11.4 million in tax revenue over a twenty-year lease, and $5.4 million in tax revenue for the Capital Metropolitan Transportation Authority. Those benefits aren’t nothing, but in pure economic terms, it’s hard to argue that they’re the best the city could have done.
Ultimately, there are a few ways to view the stadium deal as it went down, and where you land on it probably involves how you feel about the way stadiums are constructed and the role pro sports play in a city. There’s no question that Austin left a lot of money it could have made on the table by reaching the deal it did with Precourt. The direct economic impact of the Crew moving to town is almost certain to be lower than the economic impact of selling the land to a developer and collecting property taxes on it. But that’s not the only thing to consider when deciding if the project makes sense for the city. The deal reached by city council means that Austin gets a pro sports team, gets to add 130 units of affordable housing, and gets a source of revenue out of it, even if the cap on that revenue is a lot lower than it might have gotten out of another development project.
Speaking during final remarks before the vote, city council member Greg Casar—who represents a largely Latino district, and who’s worked on a number of economic and social justice initiatives in his two terms on council—addressed this when explaining why he voted for the bill. “I’ve been stopped by lots of people who want something to work,” he said. “Trying to find a way to address both affordable housing and this being a financially good deal for the city, and address the needs of people in my district who have come and stopped me asking for this, I think strikes a good balance. I know people in this community face really serious issues. We work on those issues all the time. But we do, as a city, work on making it so that you’re not just surviving, but there are things you can be proud of, and be a part of, and people can come together around.”
