Is Austin Big Enough for Both MLS and USL Soccer Teams?
Rival sports titans square off in soccer city
By Austin Sanders, Fri., June 28, 2019
Bobby Epstein wishes Austin FC the best of luck – but doesn't regret spending more than $100,000 trying to derail the deal that will, in 2021, bring Austin its first major league sports team. The Circuit of the Americas chairman says his opposition to the deal between the city of Austin and Precourt Sports Ventures stems from the tax break PSV will get for leasing city-owned land to build a 20,500-seat stadium to be home to Major League Soccer's 27th team.
It's reasonable to think there may be more to Epstein's rivalry with PSV Chairman Anthony Precourt. Epstein announced in August 2017 his plans to launch a United Soccer League team at COTA; two months later, Precourt revealed his own interest in relocating his MLS franchise, Columbus Crew SC, from the Ohio capital to the Texas capital. While Epstein denies he wanted his team, now the Austin Bold FC, to take Austin FC's prospective MLS slot, it's unusual for an emerging market to try to support two new and unaffiliated franchises at once.
The competition isn't limited to the pitch. The forthcoming privately financed (though tax-exempt) $240 million Austin FC complex at McKalla Place near the Domain is a rival entertainment venue to Epstein's COTA, which includes, in addition to its namesake racetrack and the Bold Stadium, the Austin 360 Amphitheater and has hosted big crowds for concerts, sporting events like the X Games, and even Bernie Sanders. Although the McKalla Place stadium (designed by the architecture firm Gensler) is billed as "soccer-specific," proposed site plans have included an outdoor stage for live performances.
In an interview with the Chronicle, Epstein shared his concerns about the threat Austin FC's stadium could pose to the 360 Amphitheater, which has a capacity of 14,000. "Absolutely I am worried about McKalla Place as an entertainment venue," Epstein told us. "But every entertainment business should be. Their events could take away fans from Longhorn games, movies, or other performances around the city."
But Epstein insists that his bankrolling of the now-defunct IndyAustin political action committee and the mostly dormant Fair Play Austin PAC reflects not his concern as a business owner but his frustration as a taxpayer. The deal between Austin and PSV exempts the stadium from all property taxes, not just those levied by the city, because once construction is completed, PSV will hand ownership over to the city. In lieu of tax revenue, PSV will make an annual rent payment to the city of $550,000 beginning in year seven of the 20-year lease, but they have made no such deal with Travis County, Austin ISD, Austin Community College, or Central Health.
"It's not an Austin Bold issue," Epstein said. "As a taxpayer, I have a real problem with Council giving away property taxes that could go to schools and other needs. This is about city giveaways." This may seem ironic to those who remember the battles waged over COTA's claim to $25 million in annual tax rebates from the state's Major Events Reimbursement Program – the money pledged to Formula One for rights to an Austin race – but Epstein notes that he pays substantial property taxes on the 1,000-acre Southeast Austin site.
Hey, Y'all Want to Vote on This?
Where do things stand for the Epstein-backed forces opposing the McKalla Place deal? The initial petition drive to force a public vote on the stadium agreement was led by IndyAustin, the activist PAC that also fielded the effort to put the CodeNEXT-thwarting Proposition J on the November 2018 ballot. Things went awry when the group launched an attack ad targeting Mayor Steve Adler that featured MAGA/alt-right icon Pepe the Frog, drawing accusations of pandering – inadvertently, IndyAustin said – to anti-Semitism. (Both Adler and Epstein are Jewish.)
After pulling his support from IndyAustin (which has since dissolved itself, at least as a PAC), Epstein formed Fair Play Austin to continue the effort, but once the deal between PSV and the city was finalized in December 2018, he opted to not file the petition. At that point, Francoise Luca, president of the Gracywoods Neighborhood Association and a member of a group calling itself Friends of McKalla Place, asked Fair Play if it wouldn't mind handing over the signatures, which it didn't. In February, City Clerk Jannette Goodall validated 26,441 of the signatures submitted by Luca and her McKalla Friends, well above the 20,000 required to put a citizen initiative on the ballot.
An accompanying report by Goodall reflects the sometimes sloppy handling of the petition drive. "It was discovered that the petition contained two versions of the language being proposed in the ordinance," Goodall wrote. That error resulted in the exclusion of 51 of the petition's 6,197 signature pages – a fraction of the total, but a sign to some that the initiative could have unintended consequences for some of the city's most popular cultural events.
As certified, the proposed ordinance would require "any sale, lease, conveyance, mortgage, or alienation of City-owned land for a sports facility, sports arena, and/or concert stadium shall require City Council and voter approval before it can become effective." That broad language has many around City Hall worried that if approved by voters in November, the ordinance could threaten the future of events such as the Austin City Limits Music Festival at Zilker Park. Ironically, the proposed ordinance would pose almost no threat to McKalla Place, since it's not retroactive. In theory, it could preclude Austin FC renewing its lease in 20 years.
But many in the cultural or nonprofit space, as well as Austin FC supporters, aren't willing to let the initiative founder on its own. Mark Littlefield, a local consultant who worked on the Austin FC deal, expects campaigning on both sides to heat up over the summer. "If the ordinance passes," Littlefield told us, "a 5K race, the Trail of Lights, a concert, or any other kind of event on city property would be basically prohibited."
We won't know to what extent, if any, Epstein or others have continued funding anti-stadium efforts until the latest round of campaign finance disclosures becomes public in July. Epstein did not close off the possibility of continuing to fight the stadium, though he told us that he hasn't "had any involvement" with Fair Play since the fall. The group itself appears to have quieted down, mostly just posting on Twitter and Facebook about local stories that offer a chance to criticize the "tax giveaway" afforded to Austin FC. The group has spent about $5,000 on Facebook ads between May 2018 and June 2019, which could be interpreted as light message testing in preparation for the November vote.
A Race Against the Clock
Perhaps the most interesting thing Epstein and Precourt have in common is Richard Suttle, one of the most seasoned, effective, and (to some) notorious real estate lawyers in Austin history. A familiar face to Chronicle readers – he was our 2007 Halloween mask – for his work on many, many controversial projects (Hyde Park Baptist Church, Redeemer Presbyterian Church, the Northcross Walmart, the White Lodging/JW Marriott deal that forced out Las Manitas, and so much more), Suttle also helped Epstein through the heated controversies around COTA and Formula One's arrival in Austin. In August 2017, Suttle was hired by MLS – not by Precourt – to begin lobbying city leaders for a potential team in Austin.
Suttle says his work for Epstein's rival didn't cause that much friction between him and the COTA chairman, but joked, "We're not exactly sharing cocktails with each other." Epstein has plans to build more soccer fields at COTA, as well as more ambitious plans to build a hotel on the sprawling property, but Suttle isn't likely to work on those efforts. He's focused on finishing the site plan for McKalla Place, a complicated piece of work that he says could be approved by the city just in time for the planned groundbreaking in September.
The ballot initiative causes Suttle concern, he says, only to the extent that it could pose a risk to future expansion at McKalla Place. "We'll make sure the facts are out there," Suttle said, alluding to accusations that the paid anti-stadium petitioners used misleading or outright false information to win signatures for their cause. "But I feel like our community is going to soundly turn it down."
As the political winds swirl, Austin FC President Andy Loughnane is working through a long and detailed to-do list, though he remains guarded about many specifics. "We have infrastructure to build and an office to staff," Loughnane said, anticipating more top hires to be announced by the end of the year. (On Monday, the team introduced its new press officer and media director, Tom Webb, a sports-industry veteran who several years ago held a similar position at COTA.) With the announcement that St. David's HealthCare would be the official sponsor of the team's training center, Loughnane is now looking to find both a jersey sponsor and, most importantly, a naming sponsor for the stadium.
Austin FC supporters and management alike have been celebrating the team's record-breaking number of season ticket deposits; the team announced on June 13, one day after the server-crashing pre-sale event opened, that over 30,000 seats had been reserved through refundable deposits of $50 or $100 to secure a place in line for up to eight season tickets once they go on sale. According to Austin FC officials, about 95% of those deposits were made locally. The previous MLS record was held by Atlanta United FC, which in 2015 amassed about 26,000 deposits over three months before ultimately selling in 2016 22,000 season tickets for its inaugural 2017 season. The wildly popular team now draws as many as 70,000 fans to its home games.
A lingering question about McKalla Place is how fans will actually get to the games. Though the stadium will hold more than 20,000 attendees, on-site parking will only include about 1,000 spaces, some of which will be reserved for team staff. Loughnane isn't too worried: He says a "multimodal transit plan" is currently being developed to get Capital Metro buses to the stadium (the Kramer MetroRail Station is about half a mile away, as the crow flies), as well as shuttling in fans from nearby parking lots.
The lease agreement between Austin and PSV includes a $3.6 million investment in Capital Metro, which could go toward building a new bus transit center near the stadium (estimated cost: $640,000) or improving the existing service. The construction of a new Red Line Station at the stadium, which would replace the Kramer stop, has been teased since the McKalla Place site was chosen, but that's an estimated $13.3 million investment, according to Cap Metro officials. Privately, those close to the deal admit that's too pricey to justify the number of fans the Red Line would be able to move, but publicly, PSV reps have expressed interest in working with nearby businesses on a new station.
For Now, Fortune Favors the Bold
As Austin FC continues its march toward a 2021 kickoff, the Austin Bold has already taken the pitch at COTA. Epstein claims that attendance dipped after the franchise's opener in March but has since been steadily climbing. At the team's Pride night on June 8 against the Portland Timbers 2 (the reserve squad of one of MLS's most successful franchises), the 5,000-seat Bold Stadium was about half full. The sports business website Soccer Stadium Digest reports that as of June 23, the Bold has had an average attendance of 2,693 at each of their 10 home matches thus far this season, with another nine still to go.
Hundreds of others lined the perimeter of the pitch, however, reflecting an advantage the Bold could have in retaining its fan base once Austin FC begins play. Affordable admission (an individual ticket to a Bold match ranges from $15 to $40) helps make the minor leagues more family-friendly and laid-back; many attendees at the June 8 match were casual fans, enjoying a summer night out at COTA just as casual baseball fans go to Dell Diamond to watch the Round Rock Express.
Austin FC ticket prices will cost more (except for the 200 affordable tickets the team is required to offer at each regular-season match, under its deal with the city), and the atmosphere is likely to be more intense, given the higher stakes. Still, it's not impossible to envision a future for Austin soccer in which both teams can be successful. What is more difficult to imagine is a future in which Austin FC and the Bold have a mutually beneficial relationship.
Loughnane, like Epstein, insists that he hopes the Bold succeeds, and that he doesn't hold a grudge against the team or its majority owner for trying to foil MLS's Austin efforts. "We are supportive of soccer at all levels," Loughnane told us, "but we are focused on what we control, and what we control is the opportunity to create a successful Major League Soccer team in Austin."
As of now, the two teams won't have the formal developmental relationship that other MLS teams have with nearby USL sides. As of February 2018, 19 MLS teams had announced they would either own or officially affiliate with a USL club; 10 of those pairs operate in the same market or a neighboring one. However, there are also successful pairings of MLS and USL teams in distant markets – such as USL's San Antonio FC and MLS's New York City FC – that help build fan support for the growing sport.
Both Epstein and Loughnane told us they would be open to a bit of fence-mending, but neither would say what that might look like or who would initiate it; it would seem that the Bold have more to gain from a partnership, but Epstein isn't there yet. But fans don't seem to care: An informal survey of a dozen spectators at the June 8 Bold match revealed that none were even familiar with the conflict between the two team owners. All said they would be open to attending matches at both stadiums.
Dave Thomas was there, showing his Austin FC pride by wearing a shirt from the team's supporters group, Austin Anthem, and an official team shirt. He had previously boycotted matches at COTA in response to Epstein's political efforts, but told us, "The Bold have a pretty good setup out here, and I'm glad I came to a match. I can see myself supporting both teams. Mostly I just want soccer to succeed in Austin, though."
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