Why Austin landing the Columbus Crew won’t — and shouldn’t — be a free kick – San Antonio Business Journal

If a stadium eventually rises from a barren field in North Austin to host the city’s first professional sports franchise, it will have had humble beginnings.

It will have begun more than a year ago when notable Austin attorney Richard Suttle signed up to lobby for Major League Soccer to set up shop in the Texas capital. Weekday community meetings in a recreation center or in the hallway of a health clinic, neither hosting no more than 100 people, will have led to a deal for a stadium of 20,000 screaming fans.

And it will have overcome a number of obstacles: ranging from wary neighbors in Austin to legal action brought by Ohio’s top law enforcement official.

But the story of Major League Soccer’s Columbus Crew SC, and whether it will move to Austin under the leadership of Precourt Sports Ventures, is not done yet.

PSV officials who run the Columbus Crew, one of the league’s original teams, believe they’ve found a city-owned site in Austin that’s right for their team’s stadium. They’re working to convince Austin officials and residents it’s what’s best for the city too. And it’s all on an expedited schedule: PSV plans to submit a formal proposal by the end of the month and would like some sort of agreement with the city before Austin City Council’s July break.

"We’re still educating the community. We’re still getting educated ourselves," PSV President Dave Greeley told Austin Business Journal. "But we want to put together a value-based deal, a merit-based deal with the city in the very near-term."

"At the end of the day, Austin’s a great place. It does not need Major League Soccer," he added. "But we think it should want Major League Soccer."

Still, an important question remains: Does Austin wants this team and its leadership specifically? While the prospect of the world’s most popular sport on The Domain’s doorstep excites many Austinites, burned bridges in Ohio and months without a formal proposal in Austin leave it an open question.

"This is so preliminary and we are being rushed. And I’m reluctant to be rushed into any large kind of a financial proposal, as any businessperson would as well," said Council Member Leslie Pool, whose district includes the proposed stadium site and part of its surrounding area. "There are a lot of questions that haven’t been answered.

"It would do a disservice to the Austin community, much like it is apparently doing a disservice to the Columbus community, to be there for five years and then pull up stakes and leave," she added. "What does that say to the community that’s left behind and what does that say about the ethics of the business model?"

In either case, Austin and Columbus will find out their draw soon. And one side will leave the pitch disappointed.

"It’s just such a messy situation," said David Carter, executive director of the Marshall Sports Business Institute at the University of Southern California. "There’s a lot of ill will that’s going to be created."

The crew running The Crew

Major League Soccer technically owns Columbus Crew SC, as well as the other 22 teams scattered across the United States and Canada. In MLS jargon, Precourt Sports Ventures acts as what’s called an "investor-operator" that runs the team day-to-day.

Anthony Precourt, CEO and Chairman of Precourt Sports Ventures, acquired the operating rights for the Columbus Crew in 2013 from the Hunt family, sports royalty that ran three MLS teams at one point.

But Greeley said Precourt has "a familiarity" with Austin that goes back roughly 30 years, pointing to Precourt’s time working in Houston where he would come to Austin on an "every weekend kind of deal."

"Anthony has had a long-term affinity for Austin," Greeley said. "Heck, he had his bachelor party in Austin."

Greeley said the Austin market is attractive to PSV for its booming population and economy.

"Austin is a relatively unsaturated sports marketplace," he said. "We think Austin is going to grow more spectacular in the future."

He also said professional soccer would line up with local values, including the Keep Austin Weird culture.

"It resonates with what this community’s about: youthful, energetic, multicultural [and] digitally sophisticated," Greeley said. "That’s really the sweet spot for soccer in this country."

"It’s a sport that is inherently inclusive and inherently diverse," he added. "And we think that really registers with Austin."

But, as Greeley and others will tell you, relocation "is never a pretty subject."

Greeley would not discuss what Austin has that Columbus does not; nor would he comment on efforts back in Columbus to find local investors who could potentially buy the team’s operating rights. But he did say PSV gave "100 percent" to making the Crew work in Columbus.

When asked about PSV’s relationship with the Columbus business community, Greeley said, "We’re very impressed with the connections we’ve made in Austin and, really, talking about what’s happened in Columbus in that regard really doesn’t serve any purpose."

"There is not, over 22 years of fact and history, broad-based community support in Columbus and there is very poor corporate support, based upon facts and history," he said, pointing to naming rights going to Spanish insurance company Mapfre and jersey logo rights going to Japanese car maker Acura.

"It’s a whole different stratosphere where MLS [in] 2018 is," he added. "And this is as much about where we’re going and where we need to go, rather than where we’ve been and where the league has been."

‘It’s like looking in a mirror’

Crew fan Morgan Hughes has gone to all sorts of games at Mapfre Stadium, from important World Cup qualifiers to meaningless exhibition games.

But something different happened at the first Crew game after the potential move to Austin was publicly acknowledged last October.

"I’ve never seen lines to get into that stadium like there were after the announcement last year," he said.

Hughes is a leader in the grassroots Save The Crew movement, a group of fans trying to keep the team in Columbus. Hughes and other fans blame Precourt Sports Ventures for not making the team more successful in Ohio.

"The proof is in the pudding," he said. "They’ve admitted it: They can’t get it done in Columbus."

But Hughes and other fans in the Save The Crew movement believe something more nefarious is afoot: a front-loaded home schedule with games kicking off in the teeth of the central Ohio winter. An unexpected time change, from a Saturday to a Thursday, for a road game against the Chicago Fire that many Crew fans planned to attend. An MLS2ATX announcement dropping several minutes into the season kick-off party for Columbus ticket-holders.

Regardless of the nature of that behavior, Crew fans say PSV and the league have done them wrong.

"We don’t deserve to be treated like this," Hughes said.

Greeley would not comment on accusations the team’s success has been deliberately handicapped in recent months.

Regardless, the Save The Crew movement churns along, meticulously documenting PSV’s role in the saga and tweeting away at Precourt, reporters and MLS2ATX supporters. They even set up "a shadow front office" that sells merchandise and runs community programs in the place of what they deride as an "absentee" investor-operator.

"There’s no playbook for this kind of thing," Hughes said. "All we knew what to do was start telling everyone we knew that it wasn’t over."

Hughes said he wanted to have an open mind toward Precourt’s ownership, even though a section of the fan base always looked skeptically on the San Francisco-based businessman.

"There was distrust of this hedge fund guy from the other side of the continent coming in and owning something we love," Hughes said.

"He [Precourt] told me to my face he was committed to Columbus… I believed him. But they were right and I was wrong," Hughes said of those skeptics.

PSV representatives told ABJ Precourt would not be available to comment for this article.

Hughes said he views Columbus and Austin as very similar places: populated, centrally located state capitals with large research universities and a "hip" millennial vibe.

"It’s really weird these two cities find themselves pitted against each other," he said.

Hughes said he wants the Crew to stay because of what the team means to him and his community. But he also said he doesn’t want "Austin to be hurt by these guys like they’ve hurt us."

"When I look at Austin and I see Anthony Precourt and Dave Greeley and I see their hired hands using the same [tactics] and saying the same f***ing things they said to us, it makes me mad for Crew fans," Hughes said. "It’s like looking in a mirror down there."

Hughes said he hopes Austin soccer fans would do the same if the roles were reversed.

"If there was a community that was being put through this," he told ABJ, "I’d expect them to tell us."

How those warnings coming from Columbus are received in Austin depends on who you talk to.

"I don’t feel good that we’re taking Columbus’ team," said local resident Susan Spataro, who has done work for Circuit of The Americas, where a United Soccer League team could soon play. "We could have put together an expansion team. So I don’t know. That may not be a big deal to people. But I think it’s not right."

On the other hand, Andrew Urban, a vice president in the MLS in Austin supporters group, said he’s been impressed with PSV’s work in Austin so far.

"I’ve seen their plans. I’ve seen their professionalism. I’ve seen how they’ve listened to the community on the different sites. I’ve seen the engagement with the Hispanic community, with the LGBT community, with the business community across the board," he said. "I’ve seen that firsthand. That’s the experience I can speak to."

MLS2ATX supporter Derek Ensign said he feels for passionate Columbus Crew supporters and "how difficult it must be."

"There has been a lot of investment in the team. You can see the rebranding right after he got the team," Ensign said of Precourt. "There’s even more opportunity for increased investment in a team here as opposed to what happened in Ohio."

‘Everybody pretty much feels betrayed’

Hughes and other fans also dispute the idea there’s a lack of support from the Columbus business community.

"We have over 300 business allies that say differently," he said.

Leaders with the Columbus Partnership and Columbus 2020 declined to comment.

Columbus Business First Editor In Chief Doug Buchanan said “everybody pretty much feels betrayed” by the potential move, particularly after reporting surfaced about the so-called “Austin clause" included in the contract when Precourt originally bought rights to the team that he was allowed to try to relocate to Austin.

“It colors everybody’s memory about how he’s acted here and what he’s done,” Buchanan said. “’Was he actually putting forth all the effort in marketing the team?’… From most peoples’ perspective, looking back, he didn’t.”

“[But] it’s hard to objectively look back on that when you look back and the entire time he wasn’t actually interested in staying here,” he added.

Buchanan said businesses in Columbus generally blame Precourt for a lack of engaging corporate sponsors, pointing to Ohio State University athletics and the Columbus Blue Jackets pro hockey team attracting the support of the “who’s who of the big corporate names in town.”

“From the perspective of the Columbus business community, he never really made enough of an effort to get to know people here and ingratiate himself with the community to build the relationships that would have led to bigger and better sponsorship deals,” Buchanan said. “I never really got the sense that he was very involved with the community."

But Buchanan characterized the feeling in Columbus as “pretty pessimistic” on keeping the Crew because of the league’s work with Precourt on the potential relocation.

“We’re not talking about some objective arbiter of how this is playing out,” he said.

“I would not expect any kind of proposal [for buying the team or a new stadium in Columbus] until Precourt was forced to come back from Austin with his tail between his legs because his grand plan didn’t actually work out,” he added. “Everything has to collapse in Austin.”

‘Site, site and site’

What was once a list of eight sites offered by the city has whittled down to one in an industrial part of North Austin known as McKalla Place.

“By now, chips are all in on McKalla Place,” said Richard Suttle, an Armbrust and Brown attorney who now represents PSV. “Because we only have the bandwidth to focus basically, because of the amount of work, [on] one [site] at a time. So we’re focusing on McKalla.”

Suttle said PSV intends to propose paying for the stadium and "actually donate" it to the city. “The city will maintain ownership of the land and the stadium,” he said.

The 24-acre, city-owned tract lies just south of The Domain mixed-use development — an area becoming known as Austin’s second downtown. The city of Austin purchased the former chemical plant site in 1995 before it went through environmental remediation. Both PSV and the city believe the site is safe and remediated enough for residential and commercial development.

“It’s probably the most thorough remediation project the city has ever done,” said Greg Kiloh, the city’s redevelopment project manager.

Kiloh said McKalla Place checked a lot of boxes when it was first added to the city’s list: It’s vacant, large enough to host a stadium and has regional access to major road such as MoPac Expressway, U.S. Highway 183, Burnet Road and Braker Lane.

"The compatability is good because it’s largely a commercial-industrial area," he added. "There aren’t single-family neighborhoods that close to the site."

And, as barren land only used for storing city equipment, it’s not the hottest piece of real estate the city has to offer.

"It’s not terribly attractive and it’s hard to kind of even get into to look at," Kiloh said.

Still, it’s in a booming part of town that’s in the North Burnet-Gateway planning area. It’s also surrounding by existing and upcoming development, such as nearby multifamily projects and a tract owned by Capella Capital Partners LLC slated for high-rise office space and apartments that may ultimately overlook the stadium.

"The zoning allows for development that’s more like downtown than anywhere else in downtown." Kiloh said. "It has a viable use but the pressure is, is it the highest and best use given the [surrounding] context?’"

More than a dozen city departments are studying McKalla Place as a potential stadium site. They’re scrutinizing economic benefits, neighborhood impacts and potential drawbacks. A report to City Council is due by June 1, and PSV officials said they hope to submit their official proposal to the city by that time as well.

Kiloh said he couldn’t think of a similar effort with such scope that occurred in such a short amount of time.

“This is a new one," Kiloh said. "We’ve never really, to my knowledge, done anything quite like this."

The city’s study will also look at the opportunity costs of building a soccer stadium at McKalla Place. In other words, city staff will explore what the city would be losing out on, such as creative office space or affordable housing, if a stadium was built there.

Austin Housing Coalition Chairwoman Nicole Joslin said her organization generally advocates for any opportunity to boost affordable housing in a city struggling with affordability problems.

But Joslin said McKalla Place scores fairly low on potential tax credits for the development of affordable housing. And she said whether funding sources can be leveraged is a critical part of any housing potential.

"The land is only part of the puzzle in making affordable housing work," she said.

Joslin said her coalition is more focused on other city-owned sites such as Justin Lane, the former Home Depot/Chrysler site, Winnebago and Health South.

"There are a ton of other city parcels that are good for affordable housing as well," Joslin said. "It’s up against much more higher opportunity sites in Austin."

For PSV, locking up the permanent stadium site comes even before figuring out where the team would play temporarily in March 2019, 10 months from now, though the University of Texas at Austin football stadium has been part of that conversation.

"We’re not there yet," Greeley said of temporary playing arrangements. "But obviously, once we get a site, we think a lot of things fall into place for that."

After a groundswell of community opposition to placing the stadium at Butler Shores Metropolitan Park and Roy G. Guerrero Colorado River Park, PSV officials believe they have found their site at McKalla Place.

"Our biggest challenges are site, site and site," Greeley said. "And we think we have a site that works for this sort of value proposition."

‘A long-term upside’

PSV has touted that a McKalla Place stadium could bring in more than $326 million in direct community value over the next 25 years. But experts have questioned how those numbers were reached without an official stadium proposal or additional details on the stadium’s private financing.

Still, Greeley said they expect for the economic impact of the project to be "profound."

"This is a chance for people who might not come into the city that live in surrounding communities. It could be Cedar Park. It could be Round Rock. It could be San Antonio. Heck, it could be Dallas or Houston," he said. "There could be a lot of people that want to come to support their MLS team from their market or support Austin’s [first] major league sports franchise."

Roger Noll, an economics professor at Stanford University, said the impact will largely depend on how the stadium fits into the long-term plans for the surrounding area.

"You don’t really know until those plans are hatched what the local economic impact is going to be," he said. "What are you going to use it for the other 345 days of the year? That’s an essential part of that."

Noll said new sports franchises often create a substitution effect on existing businesses, redistributing consumer dollars already being spent in the community rather than creating new spending.

He said that effect is particularly felt among businesses that provide other forms of entertainment or recreation. For example, while sports bars near the stadium might prosper, "sports bars five miles away lose," Noll said.

Noll said successful stadiums, pointing to arenas for the Sacramento Kings and Washington Wizards of the NBA , incorporate themselves into the larger area to offset negative effects.

"It’s integrated into a much larger retail, commercial and even residential development," he said. "This is the wave of the future but there are teams out there that haven’t met the future."

Carter, at USC’s Marshall Sports Business Institute, said Austin fits in the league’s goals to expand into "untapped markets" with potential municipal support and sufficient disposable income.

"They are hoping to make sure they have this adequate mix of avid soccer fans but also casual fans that they can convert," Carter said.

Carter said he can see Austin embracing the franchise if the team is well-run and marketed effectively to the region. He added that investing in an MLS team is "clearly a long-term play" by those hoping media deals and ticket revenue will grow as the sport’s popularity expands.

"Anyone that is writing a check is not expecting that return tomorrow or anytime soon," he said. "They are betting and betting dramatically on a long-term upside."

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