MLS stadium talks to start, city also considers alternate uses for site

Austin
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AUSTIN (KXAN) — With varying factions pushing for different development options at McKalla Place in north Austin, the Austin City Council decided to look at continuing discussions about what can become of the lot. This doesn’t shut the door for a Major League Soccer stadium, but it also opens the door to other mixed-use developments, despite Precourt’s insistence that they need an answer by this summer. 

One of the resolutions that passed calls for the city to begin talks with Precourt for the stadium. The other resolution calls for considering any alternate proposals for the site. Both votes happened just before 4 a.m. Friday. The city council may make a choice about which route to take at its Aug. 9 meeting, according to a city tweet. In a statement, Precourt said “Our goal is to be in a position to enter into an agreement on a public-private partnership with the city by the next council meeting on August 9.”

The third item that passed related to McKalla Place concerns the negotiation and execution of a $200,000 contract for legal services related to the development of a soccer stadium on city-owned land.

Days before the big vote, a political action committee started blasting out ads against the soccer team.

The group called Austin for a Better Future posted a Facebook video Monday with the title “Austin Throws Away $1 Billion!” The video features a man listing other options the city can do besides help build up a soccer team. The group says the city could use the money to build more affordable housing, update city roads and help the homeless.

Precourt said it has heard from a “large number” of Austinites and says the community is “strongly in favor” of the team.

“We have acted as a collaborative partner with the city and remain optimistic on the prospects of negotiating a deal with the city on MLS2ATX,” Precourt wrote. “Our focus remains on creating a community asset that the vast majority of Austinites want.”

Public opinion

Checking in with a city spokesperson just before 10 p.m., 96 people were signed up to speak. Thursday evening, council chambers swelled to capacity, all in anticipation of a vote to help determine the fate of MLS soccer in Austin. 

KXAN spoke with Ed English at city hall, who has lived next to McKalla Place for 35 years. He acknowledged being outnumbered by MLS supporters at the meeting, pushing for the McKalla Place site. 

“I know how desperate the city is for affordable housing or housing in general. And virtually every checkbox that you would check as a desirable site for affordable housing, this site meets it,” English said, saying it’s in a “high opportunity area.” 

English expressed concerns about the loss in property tax revenue, given Precourt Sports Ventures’ current proposal. 

“You’re talking about hundreds of millions of dollars in lost tax revenue that could be used for other things,” he said. 

For Chris Carruthers, Precourt’s proposal is one he can get behind.

“There’s a number of ways the city gets revenue besides just property taxes. Sales taxes would be another good example,” he said. 

Carruthers made the point that soccer is a very diverse sport, with a wide range of support. 

“Not everybody went to UT, not everybody can get behind UT sports but this is something we can all support together as the first major league franchise that they have here,” Carruthers said. 

Earlier in the day, several chambers of commerce came together at city hall to voice their support of MLS in Austin, including Tam Hawkins, CEO of the Greater Austin Black Chamber of Commerce.

“We’ve seen in recent years where sports has opened doors where government can’t and nonprofits can’t. And so it’s vital that Austin be allowed the opportunity to be at the forefront of sports and be at the forefront of being an international city and continuing to prosper in that manner,” she said. 

Ideas for McKalla Place

Earlier this week, Precourt Sports Ventures released a rendering of how it would incorporate affordable housing into the lot if the city were to go that route.

Precourt says it would work with Foundation Communities as a partner for the project. The company has already pledged more than $4 million to the nonprofit if the deal goes through. 

Council members Leslie Pool — whose District 7 includes the McKalla Place lot — Ora Houston, Alison Alter and Ellen Troxclair wanted to establish an “open and fair process” on how to develop the city-owned property. Two developers have already shown interest in turning the lot into a mixed-used development.

The proposal with Precourt had the city leasing the lot to the company for $1 a year in exchange for them to build, operate and maintain the stadium. Precourt would be exempt from all property taxes and keep revenue generated by the stadium. According to an economic study, the project will generate fiscal benefits of $11.4 million to the city of Austin.

Legal questions

A letter from a law firm giving an opinion on the legality of using McKalla Place for a soccer stadium suggested the move could open the city up to a lawsuit. KXAN learned Austin attorney Bill Aleshire sent the letter to the city attorney on Tuesday. The opening line reads, “As you know, on several occasions I have contacted you in advance of pursuing litigation against the City in hope that matters could be resolved before heading to the courthouse. This is another such occasion.”

One of the points made on the opinion, on how litigation might stop use of McKalla Place for a soccer stadium, has to do with how the land was purchased. The land was purchased in 1995 through a  revenue bond process the city describes as an alternative method for capital projects — one that does not require voter approval.  Aleshire writes, “Based on what information has been disclosed publicly, the City of Austin is on the verge of violating laws that prohibit property acquired with water utility bonds for specific use by the utility to be leased to one who would devote the premises to an inconsistent use.”

A city spokesperson told KXAN there are a variety of legal points that will need to be addressed moving forward, depending on the direction of City Council. 

 

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