UPDATE: On Thursday, May 31, one day before city staff is due to return its report on McKalla Place to council, Precourt Sports Ventures released renderings of the proposed soccer stadium.

Original story:

On May 8 more than 100 Austin residents filtered into the Northwest Recreation Center for a public information session hosted by the city about Major League Soccer’s potential arrival in Austin.

Some wore MLS scarves. Others asked pointed questions about traffic concerns in their neighborhood. As Kelan Robinson, community relations specialist with MLS2ATX, the group hoping to bring the MLS to Austin, read a presentation, a photo of the Long Center for the Performing Arts appeared on the projector behind him.

“The city has a successful history with public-private partnerships,” Robinson said.

Anthony Precourt, chairman of the Columbus Crew MLS team, is eyeing a move to Austin and a partnership with the city to build a stadium at 10414 McKalla Place, a plot of land the city bought from a chemicals company in 1995 near the intersection of Burnet Road and Braker Lane.

Before the city sits down with Precourt’s company, Precourt Sports Ventures, staff from 14 city departments are conducting an analysis to see if soccer would be the best fit at the site. Their report is due to City Council by June 1.

City leaders and officials say any potential deal will be contingent on the city ensuring a stadium benefits the entire Austin community.

“You really need competent, long-term planning (on the) side of the city. They have to do a lot of hard work,” said Roger Noll, a Stanford University professor and sports economics expert who, at the request of Council Member Alison Alter, wrote a letter outlining the potential risks and benefits of a stadium deal.

Austin’s history with partnerships


In 1999 the Robert Mueller Municipal Airport east of I-35 closed. Five years later the city signed a master development agreement with Catellus Development Corporation. The city agreed to fund a portion of the cost, paid through tax revenue, of the development now known as Mueller. According to Brian Dolezal, a spokesperson for Catellus, there are now 6,500 residents at Mueller and 4,900 employees working in the area.

“What we did back in 2004 with Mueller, some people thought we were crazy because [they thought] it would never happen. It’s too many acres to develop, and it’s been a very successful project,” said Greg Canally, deputy chief financial officer with the city.

In the years since the city has entered into more partnerships with private entities. Projects include property redevelopment, park preservation, and creation of arts spaces like the ZACH Theater, built in 2012 with $10 million in city bond funding, while private donations covered the rest of the project.

“The idea of the partnership is to transfer some of that financial risk and land risk, but at the same time make sure that we can gain community value, community benefit from those redevelopments,” Canally said.

According to Alter, Austin’s previous partnerships have started when the city recognized a public need.

The potential MLS stadium is different, Alter said, because it was PSV that started the process. Therefore she said it will require thorough due diligence on the city’s part to ensure it makes sense for the community.

“I think that first we need to understand with open eyes what we’re going into,” Alter said.

Dan Barrett, a consultant to PSV on the stadium project, has worked with parties on both sides of stadium negotiations. Barrett, executive vice president at CAA ICON, a group that represents public and private stadium owners, said the deals are highly scrutinized whenever they involve public investment of either funding, land or infrastructure.

Public benefits, Barrett said, need to be “clearly delineated for the public sector to stand behind a project.”

On the other side, he said the team ownership group will analyze the long-term economic viability of the project as well as the site’s location.

Why Austin?


Location—both tapping into the Austin market and finding a stadium site close to a population center—was PSV’s primary motivation in seeking a move from Columbus.

In October when Anthony Precourt announced the club’s intentions to relocate, he cited Austin’s “growing presence as an international city” and noted it as “the largest metropolitan area in North America without a major league sports franchise.”

Josh Babetski, founder of the MLS in Austin Supporters Group, said as Austin’s population grows so does its potential as a soccer market.

“Austin’s got this magnetism, because it’s an international destination, a cultural destination” Babetski said. “There’s great soccer [enthusiasm] here, except someone needs to pop the lid on it.”

PSV representatives say they knew they could not make demands for public subsidies to fund the stadium in Austin. When the MLS announced it would expand the league in 2016, ownership groups from 12 cities submitted bids for a team. Austin was not one of them.

Richard Suttle, who is representing PSV, said at the May 8 meeting that any potential deal would include the city retaining ownership of both the land and stadium without taxpayer funds.

“(PSV was) looking at Austin long enough, and they get it. Our city is not one of the ones that has the desire or capability to fund a stadium,” Suttle said.

Finding alternative uses


Each MLS team hosts 17 regular season matches per year. PSV president Dave Greeley said before making a $200 million investment, finding ways to keep the stadium open for more than 17 days a year is crucial.

“Honestly, it’s something that we need to justify the business model. We think McKalla is a dynamic place; we think we can add a lot of value there,” Greeley said. “So it’s not just a stadium dropped into a parking lot.”

A preliminary site plan for the stadium includes an area on the grounds for concerts and performances. Suttle said the stadium could also be used for graduation ceremonies and high school athletic events. According to Noll, those alternative uses are vital.

“In order for a stadium to play a role in the revitalization of the community, it must be used a significant fraction of the time for something,” Noll said. “That does mean for this all to make sense, the area right around the center is going to be retail shopping and maybe even some residential facilities as well.”

The proposed stadium may become one piece of a changing landscape in the city. It would be the third-largest stadium in the metro area behind the Circuit of the Americas—which seats 120,000 fans around the F1 racetrack and 14,000 for concerts—and the University of Texas’s Darrell K. Royal-Texas Memorial Stadium, which has a 100,000 capacity.

The main venue for large concerts downtown, UT’s Frank Erwin Center,  holds 16,700 for basketball games and 17,900 for concerts. It will soon shrink by a few thousand seats when UT constructs a new $350-$450 million Erwin Center, which President Gregory Fenves said will be “smaller and more intimate” than the current Erwin Center, built in 1977 for $34 million.

And in a sign that partnerships are here to stay—the university has put out a request for proposals for a private partner to design and finance the new arena.