Precourt’s MLS stadium proposal faces new, legal hurdles

Precourt Sports Ventures wants to build a Major League Soccer stadium on this city-owned tract at McKalla Place. JAY JANNER / American-Statesman

Whatever the Austin City Council decides to do in its negotiations regarding a proposal to bring Major League Soccer to Austin, it should check two boxes: Be on firm legal ground with the letter and the spirit of state law, and fairly compensate taxpayers in the way of direct benefits akin to the arrangement the city has with the Austin City Limits Music Festival.

That is why it’s a good idea for the city to immediately clear up new questions raised by Austin lawyer Bill Aleshire about whether the proposal for a professional soccer stadium on city-owned land violates state law.

It also would be wise for Precourt to sweeten the deal for taxpayers.

In a letter sent this week to City Attorney Anne Morgan, Aleshire stated that the city cannot lease, transfer or give away McKalla Place to Precourt Sports Ventures under state law unless the city receives compensation, totaling more than $18 million, or uses the land for a purpose consistent with its owner – Austin Water.

“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,” Aleshire wrote in the letter to Morgan.

“McKalla Place is an Austin Water Utility asset purchased and improved with water bonds paid by Austin water utility customers. A soccer stadium is not a water utility use.”

If that is true, it throws a curve ball (excuse the baseball metaphor) into professional soccer stadium negotiations, which already are raising concerns about whether Austin is getting a fair deal, or as Council Member Ora Houston has said, “giving away the farm.”

I contacted Morgan, the city attorney, for a response.

“We did advise our council in executive session,” she told me via email. “While I cannot disclose what we advise in executive sessions, I can tell you that if council asks the city to go forward with negotiations regarding McKalla, we will explore and address the issues raised by Mr. Aleshire.”

In a unanimous decision Friday morning, the council directed City Manager Spencer Cronk to analyze Precourt’s proposal and begin stadium negotiations. In a separate action, the council passed a resolution seeking alternative proposals for McKalla Place.

At this point, few – including myself – can determine the legitimacy of Aleshire’s assertions or whether they have any merit at all. The city is in the best position to clarify those matters and should do so publicly to limit speculation that is likely to cloud or confuse matters regarding the use of McKalla Place for professional soccer or, for that matter, other purposes, such as a mixed-use development. To allow such questions to simmer without clarification is unfair to the water utility and its users, Precourt and the public.

Aleshire asserts that state law prevents the council from selling McKalla Place to Precourt without taking competitive bids. He did say, however, the council does have authority to use the land for a purpose consistent with the water utility – a stipulation he joked isn’t satisfied with a few rain water collection barrels or low-flush toilets.

Matters might end up in court, Aleshire told Morgan, unless the city sheds light on the legal questions raised by using property owned by Austin Water for sports or entertainment purposes.

Again, this is speculation, but if Aleshire’s assertions do have merit, it would seem that the city would have methods to make the water utility whole, clearing the way for soccer or other uses of McKalla.

Aleshire’s caution should not be taken lightly. He prevailed in a previous legal skirmish with the council regarding the city’s attempt to grant water utility fee waivers to the Pilot Knob housing development, getting the council’s action reversed and declared void.

READ: Pilot Knob violated state, federal law

Those new legal questions come as Austin City Council members are in talks with Precourt about its proposal to lease the 24-acre McKalla property for $1 a year. The initial terms of the agreement would cover 20 years, but with options that permit Precourt to renew under the same terms, the contract could run 80 years.

Precourt has proposed financing the construction of a $200 million stadium on the site for its Columbus Crew, SC, which it wants to relocate to from Columbus, Ohio, by year’s end. Because the property – including the stadium — would be owned by the city of Austin, Precourt wants a deal that would exempt it from paying property taxes to the city, Travis County, Central Health, Austin Community College or financially-strapped Austin Independent School District.

Some on the council have downplayed such taxpayer subsidies, arguing that the economic and social benefits Major League Soccer would yield for the city outweigh other financial considerations.

That argument ignores the fiduciary responsibility of council members to consider the highest and best use of a public asset — prior to a decision. That doesn’t mean a soccer stadium isn’t the best use, but that can’t be determined in a vacuum.

That is especially true, given city records provided by Aleshire.

Austin Water, the city’s water utility, purchased the property in 1995 for $1.4 million, city records show. That distinction requires the city to at least recoup the utility’s $18,261,323 investment over time.

So far, Precourt’s offer, while significant in benefits to Austin’s private business community and the city’s overall economy, does not provide direct or meaningful compensation to Austin Water, those who pay fees to the utility, or city taxpayers.

As the Statesman’s editorial board has said, the proposal deprives students and families in Austin district schools and ACC of badly-needed tax revenue the city likely would realize from other private developments that paid property taxes to those jurisdictions.

RELATED: Negotiate MLS stadium deal on Austin’s terms, not Precourt’s

Precourt seems to be getting the message. This week it announced it would build up to 130 units of affordable housing on the site with a parking garage. The details are sketchy, but that would be a solid benefit to taxpayers, helping Austin deal with its Austin’s affordability crisis.

If the sports franchise wants to win over critics, it should look to the city’s arrangement with the ACL Music Festival in which the private venture uses Zilker Park to stage its festival two weekends a year, though preparations and clean up limit park use for weeks before and after the festival.

The city gets a solid return from ACL: Since 2006, ACL has contributed over $26 million to the Austin Parks Foundation for improvements to parks, trails and green spaces – and in 2016 alone, it donated $6.3 million for maintenance and improvements to hundreds of city parks. ACL also pays for the yearly restoration of Zilker Park’s Great Lawn.

Major League Soccer might well be a Kumbaya enterprise for Austin; might boost the city’s cool factor. Even so, the council should put its game face on and get the best deal for Austin Water users and taxpayers.

 

 

 

Grumet: Austin should look to LA, where an MLS team pays property taxes

The new Los Angeles FC stadium opened this spring — and it plans to pay property taxes. Photo by Harry How/Getty Images

I recently noted that property-tax free stadiums tend to be the norm in the professional sports world, and we know that Precourt Sports Ventures wants just such a property tax-free deal in Austin. If Austin moves forward today with negotiating a Major League Soccer stadium at McKalla Place, however, it might find some useful lessons in Los Angeles.

The Los Angeles FC’s fancy new Banc of California Stadium just opened this spring on government-owned land. And it’s going to pay property taxes.

“There was never any issue about property taxes being charged or not,” Seth Burton, LAFC’s vice president of communications, told me late Wednesday via email, responding to questions I’d sent earlier. “The stadium is a private development and did not request or need property tax defrayed.”

The Los Angeles FC stadium seats about 22,000, a shave above the 20,000-seater that Precourt Sports Ventures proposes to build in Austin. It’s worth noting the LAFC stadium has other bells and whistles that brought construction costs to $350 million, well beyond Precourt’s $200 million stadium budget in Austin (I don’t have the details on the Carson, Calif. stadium that’s home to LA’s other team, the LA Galaxy). LAFC fully financed its stadium construction, just as Precourt proposes to do.

Editorial: Negotiate MLS stadium deal on Austin’s terms, not Precourt’s

Both stadiums also involve government-owned land. Burton told me the LAFC stadium sits on state-owned land that is being subleased from the University of Southern California. Precourt wants to build its stadium on the 24-acre McKalla Place tract owned by the city of Austin, which the franchise seeks to lease for $1 a year.

But here’s a key distinction: When the construction dust cleared, LAFC retained ownership of the soccer stadium it built and plans to pay property taxes on it. The first bill hasn’t come due yet, so Burton couldn’t provide a dollar amount. “The process to determine the amount of taxes is ongoing,” he said, which is not surprising, considering the challenges involved in appraising a sports venue for tax purposes.

In Austin, Precourt has proposed giving the stadium it builds to the city. This city-owned facility would remain off the tax rolls, much like the city-owned stadiums used by FC Dallas (technically based in Frisco) and the Houston Dynamo.

The property tax question is just one piece of the puzzle for Austin officials to figure out if they proceed today with Precourt. It’s possible some other combination of benefits makes better sense than putting the stadium on the tax rolls. But it’s instructive to know there’s a place where an MLS team pays property taxes without flinching.

Grumet: What would Austin soccer stadium pay if it paid property taxes?

Financially speaking, it’s the biggest unknown in the proposal for a Major League Soccer stadium site at McKalla Place: How much property tax revenue would the city forfeit if the stadium was kept off the tax rolls?

Michael J. Gaudini, a policy advisor with Council Member Leslie Pool’s office, fired up Excel and calculated some reasonable estimates that provide some scale to the debate, with some caveats I’ll explain in a minute.

We know a private appraisal in 2016 valued the land at $29.5 million, and we know Precourt Sports Ventures plans to spend $200 million building the proposed 20,000 seat stadium if the Columbus Crew SC moves here. Using those values, Gaudini estimates such a stadium would pay roughly $5 million in property taxes its first year, if the stadium and the land were both fully taxed.

That bill would include $2.7 million for Austin schools, $1 million for the city of Austin, nearly $850,000 for Travis County, almost $250,000 for Central Health and about $230,000 for Austin Community College. (Gaudini’s spreadsheet has exact dollar figures, but I’m rounding here for ease of discussion.)

Of course that’s just Year 1. Gaudini forecast three scenarios stretching into the next 25 years, rightly recognizing that forecasts become less reliable the further you reach into the future.

Grumet: Austin’s MLS stadium numbers aren’t as strong as they look

Under his first scenario, assuming a 4 percent growth in property taxes each year, the total lost tax revenue over 25 years would be $211 million, including $114 million to Austin schools, $42.5 million to the city of Austin, $35 million to Travis County, $10 million to Central Health and $9.6 million to ACC.

Under his second scenario, assuming a 6 percent growth in property taxes each year, the total lost tax revenue over 25 years would be $278 million, including $150 million to Austin schools, $56 million to the city of Austin, $46 million to Travis County, $13.5 million to Central Health and $12.7 million to ACC.

Under his third scenario, assuming an 8 percent growth in property taxes each year, the total lost tax revenue over 25 years would be $371 million, including $200 million to Austin schools, $74.6 million to the city of Austin, $62 million to Travis County, $18 million to Central Health and $17 million to ACC.

The 6 percent or 8 percent scenarios are the likelier ones, if recent history is any guide.

These forecasts are built on assumptions, including the idea that tax revenues will continue on a steady upward march for the next quarter century, between fluctuations in the tax rate and growth in property values.

Editorial: Negotiate MLS stadium deal on Austin’s terms, not Precourt’s

One could also debate whether the construction cost of the stadium is the best way to value it for tax purposes. We know that hasn’t been the case at the Circuit of the Americas, which has successfully lowered its tax appraisals by arguing the Formula 1 racetrack is worth only a fraction of what it cost to build.

I asked Gaudini about this, and he acknowledged the Travis Central Appraisal District might look at other indicators to set the value, as the agency did for COTA (the appraisal district, understandably, didn’t want to speculate with me about a proposed stadium’s tax bill). But he found several indications, including this presentation by the Tampa-area tax appraisal office, that construction cost is a fair value to use.

All of this is an academic exercise: Precourt wants a property-tax free deal. That’s not uncommon: FC Dallas and the Houston Dynamo play their MLS games at city-owned stadiums that don’t pay property taxes. With a few exceptions, property tax-free stadiums are baked into the financing for pro sports franchise deals.

Also missing is any sort of comparison to the taxes that other developments might pay if McKalla Place was used for housing or mixed- use projects. Council Member Jimmy Flannigan asked city staff for that very thing at Tuesday’s work session with the hope of better understanding the opportunity costs. The council is set to consider two resolutions Thursday: One launches the city’s negotiations with Precourt for a soccer stadium deal, while the other allows other developers to pitch plans for the site.

Nonprofit-owned affordable housing on city-owned land wouldn’t pay property taxes, though it would help address a critical city need. (Precourt recognizes that and has added an affordable housing component to its stadium plan). However, if a for-profit developer built a mix of apartments, shops and offices at McKalla Place, it likely would pay property taxes.

Grumet: Who’d want part-time MLS stadium jobs? You’d be surprised

These comparisons are beside the point for Mayor Steve Adler, however. He said there’s no doubt a mixed-use development on McKalla Place would bring more property tax revenue. But the soccer stadium, he said, would serve a larger community purpose.

“We did the (downtown) library on an incredibly valuable tract,” Adler noted. “I don’t remember an analysis being done about what we would be able to do if we put that to a mixed use development, which would have been an extraordinary value. We didn’t do that because a library was a really important thing for us to have, and now there are thousands of people a day going to the library.”

Of course there’s a difference between a city-owned library and virtually free use of city-owned land by a for-profit venture like Precourt.

But a soccer franchise would bring other community benefits. Weighing them all will be the City Council’s challenge on Thursday.

America the beautiful, now America the ugly under Trump

 

MCALLEN, TX – JUNE 12: U.S. Border Patrol agents ask a group of Central American asylum seekers to remove hair bands and weddding rings before taking them into custody on June 12, 2018 near McAllen, Texas. The immigrant families were then sent to a U.S. Customs and Border Protection (CBP) processing center for possible separation. (Photo by John Moore/Getty Images)

 

So, this is our America.

We’re now a country that gives cover and comfort to white supremacists who publicly slur Jews, African Americans and Latinos.

We’re a nation that defends extremes in gun regulation, even as our children and families are gunned down in our classrooms and churches by persons armed with weapons of war.

We’re a government that paints Muslims with a broad – and ugly – brush.

We’re a sovereign power that wants immigrant kids who grew up in our neighborhoods, have made us proud with academic accomplishments or service in our armed forces, to be exiled to the shadows of our cities or other countries because they lack legal papers or citizenship.

And we’re a country that rips migrant children from the protective, loving arms of their parents.

This is what America has become under the leadership of President Donald Trump. And it’s an America that we the people have endorsed with our votes, legal and justice systems, apathy and void of moral clarity.

Trump might have conceived it, but we now must own it.

That hard dose of reality reverberates in the voices of crying children seized at the Mexico-United States border.

Between May 5 and June 9, more than 2,300 children were separated from parents or adults with whom they were traveling, according to the Department of Homeland Security. Family separations are the result of Trump’s new zero tolerance policy, which refers all border crossings for federal prosecution, even though many migrants crossing the border illegally, mostly from Central America, are seeking asylum.

Up to this week, the public had a limited view of the impact of forced separations on the children. That changed when the nonprofit journalism organization ProPublica published what it said was a recording made inside one of the U.S. government facilities where children taken from their parents are housed.

We heard the raw, unfiltered cries of children calling out in Spanish for “Daddy!” and “Mommy!” We heard children sobbing deeply. We heard a girl repeatedly pleading with adults to call her aunt, whose phone number she had memorized.

RELATED: Hear children recently separated from their parents

“My mommy says I’ll go with my aunt and that she’ll come to pick me up there as quickly as possible.”

ProPublica identified her as a six-year-old from El Salvador.

That was gut wrenching. But then we learned of the “tender-age” facilities across Texas set up by the federal government to house infants, toddlers and young kids.

In simple but powerful words, radio commentator Dave Ross for Seattle’s KIRO-FM brought into focus how far we’ve strayed from President Ronald Reagan’s America as a “shining city on a hill.” How far removed we are from the hope the Rev. Martin Luther King Jr. expressed in speeches that cited the biblical parable of the Good Samaritan.

Ross said: “Those are American border agents, trained in America, paid by American taxpayers, following orders from an administration that ran on this policy and was elected by Americans!

“This is who we are now!

“I’m sure we very much would like to be a ‘beacon of hope to the world,’ but that brought too many strangers banging on the door. And so it appears we will snuff out that light and change the locks, at least for now.”

Though Trump officials strongly defended the policy and – unbelievably — justified it with Scripture, officials now appear to be moving away from family separations, no doubt because of rising public pressure, including from the president’s own Republican Party leaders, such as U.S. Sen. Ted Cruz of Texas.

On Wednesday, Trump said he would sign an executive order that would end the process of separating children from families after they are detained crossing the border illegally, the Associated Press reported.

“We want to keep families together. It’s very important,” Trump told reporters during a White House meeting with members of Congress.

READ ALSO: In reversal, Trump signs order stopping family separations.

It seems the cries of children melted America’s indifference – at least for the moment.

The issue is not fully settled. Family units will be kept together, but in detention facilities. Also, there remains a serious question about whether migrants fleeing violence and political persecution in their countries will be fairly handled by our courts regarding asylum claims. Instead, we might see them, and their children, swiftly deported by Trump policies that make it tougher to win asylum.

The U.S. should have secure borders. But Trump’s (and now our) America is an eternity away from an Ellis Island that once welcomed poor immigrants from across the globe.

Some no doubt will say that America never was perfect. That is true. But the nation was continually struggling to perfect its imperfections and address past wrongs. It had thought-leaders in Susan B. Anthony, who led the movement to win the vote for women; and Eleanor Roosevelt who tackled racism by flying with black pilots at Tuskegee Institute during WWII, when the military was segregated; her husband, FDR, took on the Nazis in Germany; Thurgood Marshall, was a fearless champion for racial and social justice. There were so many Americans who stood tall for our values.

That is the truly scary thing about today’s America in which hope is being strangled by fear, bigotry, intolerance and apathy. We are becoming desensitized to the pain and suffering of neighbors and strangers alike.

Our hope – and future – relies on rebuilding America humanely and sanely. If we do that, we rebuild ourselves.

Behind the Latino appreciation for Anthony Bourdain

Notes, photographs and flowers are left in memory of Anthony Bourdain at the closed location of Brasserie Les Halles, where Bourdain used to work as the executive chef, Friday in New York City. (Photo by Drew Angerer/Getty Images)

Among the many tributes and condolences pouring in for Anthony Bourdain, Scott Kelly’s surely came from the rarefied heights. The retired astronaut tweeted that he watched the master storyteller’s shows from space because they pulled him closer to humanity.

“It made me feel more connected to the planet, its people and cultures and made my time there more palatable,” he said.

From his heavenly vantage point in space, Kelly said, Bourdain inspired him “to see the world up close.”

When we struggled to make sense of a world where difference is not tolerated but vilified, Bourdain, a hero of curiosity, someone said, taught us that the unknown was something to embrace and enjoy. Adventure was his muse. Sharing a meal and a drink was a means to connect and to discover we have more in common than we might think.

His travels around the globe, he said, had enriched him by showing him how other people live. “How hard their lives are, how big the world is,” he told CBS in a recent interview.

Bourdain was a champion of the marginalized. If you’re Mexican-American or Mexican or Latino – or even if you’re not – you have seen and heard accolades for his eloquent and irreverent public defense of Mexican immigrants and his appreciation for Mexican culture that reached broadly beyond just its cuisine.

In a famous 2014 essay that’s been shared widely in Latino circles, he wrote:

“As any chef will tell you, our entire service economy — the restaurant business as we know it — in most American cities, would collapse overnight without Mexican workers. Some, of course, like to claim that Mexicans are ‘stealing American jobs.’ But in two decades as a chef and employer, I never had one American kid walk in my door and apply for a dishwashing job, a porter’s position — or even a job as prep cook. Mexicans do much of the work in this country that Americans, provably, simply won’t do.”

Bourdain said he was grateful for the skilled Mexican cooks and kitchen workers who toiled in obscurity but were generous just the same, showing the new, celebrated chef the ropes, imparting the knowledge they had worked long and hard to acquire.

“In nearly 30 years of cooking professionally, just about every time I walked into a new kitchen, it was a Mexican guy who looked after me, had my back, showed me what was what, was there — and on the case — when the cooks more like me, with backgrounds like mine — ran away to go skiing or surfing — or simply ‘flaked.’”

The Mexican workers Bourdain stood up for get a raw deal. Working diligently in back kitchens and behind the scenes, but unappreciated, they are unwittingly yanked into the spotlight when their people are vilified as “criminals” and “rapists” overrunning our border, flooding our cities with drugs, taking jobs from Americans. In that narrative, they become something less than the rest of us.

Oh, and about those drugs, Bourdain wrote: “We love Mexican drugs. Maybe not you personally, but ‘we’ as a nation, certainly consume titanic amounts of them — and go to extraordinary lengths and expense to acquire them … In the service of our appetites, we spend billions and billions of dollars each year on Mexican drugs — while at the same time spending billions and billions more trying to prevent those drugs from reaching us.”

In daring to call out American hypocrisy over illegal immigration, Bourdain spoke bravely and with unflinching honesty, as much or more than any other American celebrity. The double standard is that this is a country that puts out the hiring sign to employ millions of unauthorized workers, yet spends billions to keep them out. To call that out is to risk self-inflicted wounds from the likes of those who cry, “What part of illegal don’t you understand?” Bourdain surely knew the risk — and was a willful defender of the immigrant workers he came to know.

Yes, that is why after learning of Bourdain’s death, some Latinos gravitated to social media to express their admiration for Bourdain, who dared to confront stereotypes and rhetorical talking points to present human beings and immigrant workers in a different light — with dignity.