A Look at the Proposed Austin City Council Amendments to the PSV Term Sheet

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The big day in the MLS2ATX saga returns on Wednesday, August 15, when the Austin City Council reconvenes to consider the proposal from Precourt Sports Ventures/Major League Soccer to build a stadium at McKalla Place. When last we left off, well, perhaps a photograph would best display the performance from Richard Suttle, lobbyist for PSV/MLS.

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Luckily for PSV/MLS, instead of outright killing the deal, the Council agreed to move the hearing to 8/15 to further discuss the Term Sheet. During that process, the Council also agreed to discuss potential amendments which could add to/subtract from, or alter the Term Sheet. Setting aside the issue of whether any of these amendments are “poison pills” designed to kill the deal, it is an open question as to whether PSV could abide by many of these amendments, should they pass. It’s also possible that we could see yet another revised Term Sheet which incorporates some of these amendments into the deal.

With all of that in mind, it’s probably a good idea to take a look at these amendments and see if they are likely to pass, and if so, whether PSV/MLS would accept them.

Before we get started, it’s a good idea to look at my story handicapping the vote from last week. It will give you an idea at where all of the council members stand.

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Pool has been one of the most ardent opponents of the deal (this stadium would go in her district). She has said that even if she doesn’t vote for the deal, she wants to make the deal as good for the city as she can.

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I’m assuming Pool struck amendment 4, so I’ll ignore that one.

  • Pool 1: This amendment would basically extend the community benefits agreement past year 20 of the lease as a default matter while the parties negotiate a new one, whereas the Term Sheet eliminates the community benefits agreement after year 20 of the lease while the parties negotiate a new one. It’s basically a matter of leverage, and there’s no real reason for the City to give it up. So I guess they’ll pass it. PSV would still retain their leverage as well, since after year 20, they could decide to move from Austin.
  • Pool 2: Limiting the number of dates to 35 that PSV can schedule events is likely to be a nonstarter for them. This could definitely kill the deal. My guess is the Council votes this down.
  • Pool 3: I can’t imagine that PSV would strenuously object to the City having input into green space design.
  • Pool 5: No chance PSV agrees to this tax structure. Would certainly kill the deal, and I don’t think there are enough votes to pass this anyway.

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Alter essentially blew up the chances of getting a vote last week (along with Tovo), with her questioning of Suttle on the issue of gender equity in the Community Benefits Agreement.

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  • Alter 1: There isn’t expected to be much remediation necessary, and I can’t imagine the City is going to agree to some open number.
  • Alter 2: I can’t see PSV having an issue with input from the City on these issues.
  • Alter 3: Again, this seems like a nonstarter from PSV’s end. This would likely kill the deal. Unlikely there are the votes to pass this.

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Troxclair is with the “band of four” (Alter, Pool, Houston) who had serious issues with the Term Sheet, and put forth significant proposed changes.

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The issue that PSV is going to have with Troxclair’s amendments is that they are going to cost money in one way or another.

  • Troxclair 1: No chance PSV agrees to that rent scheme. Unlikely there are the votes to pass it.
  • Troxclair 2: The ticket surcharge is the complete opposite of what is in the proposed Term Sheet. In the Term Sheet, PSV gets to impose the surcharge and pocket the money if they want. They won’t agree to this.
  • Troxclair 3.1-3.3: A structured parking facility would cost significant funds, to say nothing of increasing the spaces from 1000 to 4000.
  • Troxclair 4: This could go the other way, depending on how much over the $200,000 the expenses could be. I need more information on this to be sure.

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Garza’s main concern has to do with the transit/rail issues. By the sounds of her comments at the meeting last week, it looks like her concerns have been alleviated.

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  • Garza 1: It looks like this amendment was crafted with the agreement of PSV/MLS, so I expect it to pass.

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Tovo has an insane amount of amendments, so I’m going to break them up for purposes of this story. As noted above, along with Alter, she essentially blew up the chances of having this resolved last week with her questions on gender equity and community benefits.

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  • Tovo 1: Oh man, this is going to be a problem. Suttle refused to disclose anything about the agreement he reached with Lonestar, the girls academy that will be getting benefits from PSV. What I think will happen here is that Suttle will reiterate that the community benefits agreement does not include the MLS-mandated academy contribution (which drops the CBA by like $35 million). But I can’t imagine how that will go over with the Council. This absolutely has the ability to blow up the deal. There will be a lot of discussion over this one.
  • Tovo 2: A standard “best efforts” to use local construction/labor. It’ll pass.
  • Tovo 3: Likely to pass, subject to the City covering the costs such as utilities and the like.
  • Tovo 4: Doesn’t require much of PSV, so likely to pass.
  • Tovo 5: City isn’t likely to agree to assume these costs (to the extent they exist), so likely to pass.
  • Tovo 6/7: I can’t see PSV opposing these.

Let’s move on to the next set of proposed amendments from Tovo:

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  • Tovo 8: PSV is extremely unlikely to give up control. I could see this being amended to say that the City won’t unreasonably deny the events.
  • Tovo 9: No way. PSV will argue that this will adversely affect attendance.
  • Tovo 10a/b: The City will want control of these developments off-site and the wetlands (if they exist).
  • Tovo 11a-g: Cosmetic changes only. These should pass.

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Casar has focused more on affordable housing and labor/wage issues, and his amendments reflect that.

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  • Casar 1: I believe this amendment was written with input from PSV/MLS, and as such I expect it to pass.
  • Casar 2: Same as Casar 1, and for that reason it should be palatable to PSV/MLS and pass.
  • Casar 3: This doesn’t require PSV/MLS to put out any money, so they have no reason to oppose it.
  • Casar 4: I believe this was written with consultation from PSV/MLS, and if not, it still basically aligns with the Term Sheet. It could also be amended to be palatable PSV/MLS if not.

That’s all of them! Many of these may be amended during the course of the discussion, which could determine whether they pass or not. Remember there is a (supposed) 11:30 a.m. cutoff to take the vote on the proposal. Also, an amended Term Sheet could be released today which incorporates some of these proposed amendments. We’ll see what happens.

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