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Group of Austin City Council Members offer amendments to the McKalla Place term sheet

Proposed amendments would significantly change PSV’s obligations to Austin should a stadium deal be negotiated.

Photo by Rick Kern/WireImage

On Tuesday, Austin City Council Member Leslie Pool, Alison Alter, Ora Houston and Ellen Troxclair released a proposed set of amendments to the term sheet for a Major League Soccer stadium on the McKalla Place site, negotiated between Precourt Sports Ventures and the Austin City Manager. The proposed new term sheet significantly increases PSV’s financial responsibility at McKalla Place and would require a second vote on the final stadium agreement negotiated between PSV and the City of Austin.

Increased Payments

The most notable amendments proposed by the four council members include an increase in the yearly rental fee that PSV plays and the creation of a pseudo-property tax that PSV would pay yearly.

Rent would be increased to, what the group of four argues is, a still sub-market amount of $958,720, increasing by 2 percent annually. Under the current term sheet, PSV would pay a static $550,000 beginning in the sixth year of the lease. From the proposed amendment, it’s unclear whether rental payments would start in year one of the lease or in year six, but rental proposal represents a dramatic increase over PSV’s preferred price.

In addition to an increased rental payment, the group of four proposes an additional annual fee of $958,720, also increasing by 2 percent annually, to be divided between the Austin Independent School District, Travis County, Austin Community College and Central Health. The City Council Members can sugarcoat this payment any way they would like, but this is a stand in for property taxes. This proposal claims that the the $958,720 is half of the estimated property taxes that would be collected were the land taxed.

Simply, this proposal raises PSV’s initial yearly payment to about $2 million, which is nearly four times greater than the amount that PSV agreed to in the initial term sheet.

Transportation

PSV and the Austin City Manager’s initial term sheet requires PSV and Austin to “work together” and with third parties to finance a transit rail station near McKalla Place. The group of four’s proposal bluntly states that PSV should bear the full burden of financing this transit station (estimated at between $12-13 million) as multiple other developers have promised.

Final Approval

The group of four also would like to have another vote for final approval on whatever stadium deal is negotiated between PSV and the City of Austin following the Aug. 9, 2018 vote on the term sheet and these amendments. While final approval may not seem significant, this puts yet another vote and hurdle on the horizon for PSV, effectively pushing the deadline of this deal out to October.


PSV is, unsurprisingly, totally opposed to the proposed set of amendments. Following the release, lobbyist Richard Suttle told the Austin-Statesman that “it appears the proposals in their entirety would effectively make bringing MLS to Austin virtually impossible.” Suttle went on to state that the “terms are new and not consistent with what we have been negotiating for some time.”

Austin’s City Council currently has 11 voting members. This amendment, and the term sheet itself, requires six votes to pass. With four members attached to this set of amendments, only two of the remaining seven members are required to pass the amendments. It is unclear if the remaining two votes are there, but Council Member Jimmy Flannigan will likely be a target of the group of four.

During Tuesday’s review of multiple other proposals for the use of McKalla Place, Council Member Flannigan expressed frustration with the chaotic process of finding a use for the McKalla Place site.

Tomorrow’s Austin City Council meeting represents the biggest day yet for keeping Crew SC in Columbus. With just a few votes, the term sheet could pass, fail or be seriously amended. Additionally, the City Council could be swayed by another proposal or might decide to slow down the process and take additional time to review proposals. No matter what happens, tomorrow will be be a huge day in the history of Columbus Crew SC.