Category: Houston Dynamo

It seems like we’ve been waiting for this forever, but it’s finally happened: The Houston Dynamo have signed a lease for a new stadium to be built for the 2012 season.

The funding breakdown: The Dynamo will pay for $76 million in construction costs, while the city and county will share $15 million in land costs, plus $20 million in infrastructure improvements. The city and county will jointly own the 21,000-seat stadium — presumably so that the Dynamo don’t have to pay property taxes — and charge the Dynamo $65,000 a year in rent.

I haven’t been able to find the full lease details — who gets things like naming rights money, for example? — but on the face of it, this doesn’t look like too much of a public giveaway, unless property tax exemptions in Houston are worth more than I’m guessing. Though it’s about par for the course for MLS stadiums, where the team has typically paid for construction while the public pays for land — which is probably a function of the fact that MLS still doesn’t have the leverage in most markets to extort more sweetheart deals. Soccer’s great and all, but no mayors lie awake at night in fear of being accused of losing the city’s soccer team…

The Harris County commission yesterday voted to approve the Houston Dynamo‘s proposal for a $95 million stadium, $35 million of which will be paid for by the city and county.

With the Houston city council having approved its end of the deal last week, the project will now move ahead toward an April 2012 opening … unless it doesn’t. The city and county still needs to create a tax-increment financing district around the stadium to funnel new tax revenues into repaying the public costs, among other things. All signs are that the remaining measures will be approved without incident, but in stadium deals as in baseball, it ain’t over till it’s over.

The Houston city council unanimously approved spending $17.5 million on land and infrastructure for a new Dynamo soccer stadium yesterday. The vote leaves the seemingly endless Dynamo stadium campaign just a vote by the county commission (which would chip in a similar amount) away from approval, which could come as early as Tuesday.

If all goes according to plan, the Dynamo will break ground on a $60 million (not counting land and infrastructure) stadium this fall, with it set to open in 2011 — which sounds crazy ambitious, but then, soccer stadiums aren’t nearly as complex to build as, say, baseball stadiums. Though this won’t be soccer-only, interestingly: The Texas Southern University football team will also play there.

As for whether this is a good deal for Houston, that’s harder to say at this point. The Houston Chronicle cited Mayor Annise Parker as arguing that “the stadium is a better deal than Minute Maid Park, the Toyota Center and Reliant Stadium because neither the city nor the county will have to pay for the stadium itself” — which is true, but that’s not the same as arguing that it’s a good deal. Then, too, there’s the question of whether the Dynamo will pay rent or share any stadium revenues with their public landlord, or whether the whole public ownership of the stadium thing is just a way of getting out of paying property taxes.

Probably the best way to sum this up is: MLS still isn’t popular enough to command the sort of leverage that other sports do, and their stadiums are cheaper to build, so at worst the public loss isn’t as bad as throwing it down a hole on baseball or football. Which is, I suppose, what the mayor was saying, just not in so many words.

The slow-moving Houston Dynamo stadium project could be approved in a matter of weeks:

The city council is expected to vote March 31 and county commissioners April 13. Construction could begin Oct. 1 and the stadium could be ready for 2012. The Harris County-Houston Sports Authority’s board is expected to vote Thursday on whether to play a central role in managing the deal and overseeing the project.

In other news, the Houston Dynamo stadium project won’t be resolved until the fall:

At a Houston City Council committee meeting Tuesday morning, the city’s Chief Development Officer Andy Icken outlined a handful of things that need to happen by September for the deal to get done.

“It’s an interlocal agreement between the city, the county and the Sports Authority,” Icken told the Houston Business Journal. “It’s not a done deal.”

Huh? What appears to have happened here is that the council committee meeting yesterday kicked around a bunch of ideas, most of them already plenty pre-kicked — like a tax increment financing district through which the county would kick back $10 million in tax money to the project — but didn’t actually decide anything. And those votes coming up are just to keep the process moving, not give final approval.

One curious component of the deal: According to county community services director David Turkel, the county would also pay $7.5 million to become a “joint owner” of the stadium site. Whether this means the county would get some revenues from the stadium isn’t clear; given that one of Icken’s “handful of things” is for the Dynamo to actually agree on a lease to the place, it’s likely not clear to them yet, either.

Newspapers have long derided their sports sections as the “toy department” — more about cheering than actual journalism — but Houston Chronicle sportswriter Jose De Jesus Ortiz’s article on Friday about progress towards a new Dynamo soccer stadium takes rooting in the press box to an extreme. De Jesus Ortiz begins by declaring that Dynamo fans should be “doing cartwheels” over the fact that, notwithstanding that still no one has quite figured out how to pay for it, city and county commissioners have asked the Harris County-Houston Sports Authority to be the builders and owners of the proposed 21,000-seat stadium.

Why is this good news? Because, according to De Jesus Ortiz, the authority already built for Houston “among the best stadiums in the United States for baseball, football and basketball.” And then he goes further:

Contrary to what some would have you believe, taxpayer dollars weren’t used to build Minute Maid Park, Reliant Stadium or Toyota Center.

“It was very carefully drawn to tax hotel, auto and seat licenses,” [state Sen. John] Whitmire said. “So they’ve been great cost-effective venues to benefit not only Harris County but East Texas and Texas in general. We’ve received a Super Bowl, a baseball All-Star Game, a World Series and other major sporting events because of these stadiums.

“It cost no property taxes. It generates an increase in property taxes, which then you use for general services. It’s a win-win. The venues are built with bonds and you pledge user fees, parking, hotel, rental cars, seat licenses. Then the stadiums increase the value of the surrounding area, which creates taxes.”

That’s a large mouthful of justification, but none of it comes down to “no taxpayer dollars” — at best, if you believe the argument that the stadiums raised property values (without merely redirecting property increases that would have taken place somewhere in Houston anyway), it’s that “the stadiums were built with taxpayer dollars, but they ended up being a good investment in the end.” It’s a claim that’s hard to evaluate, though, since De Jesus Ortiz didn’t interview any economists or urban planners for his story — his only source, in fact, is Whitmire, who is the guy who came up with the idea of the sports authority in the first place, and so might not be the most objective observer.

Meanwhile, the more reality-based media — and yes, that’ll probably be the only time I use that term to refer to a Fox TV news outlet — reports that there’s a potentially large hurdle to the sports authority taking over the Dynamo stadium project, which is that the authority has a no-compete clause with the Rockets‘ Toyota Center that prohibits it from even discussing building a new stadium or arena within ten miles of that arena until 2013. Authority board chair Kenny Friedman says that he hopes the non-complete clause won’t apply since the soccer stadium isn’t planned for holding concerts; the board is expected to discuss this issue at a meeting today.

Houston Chronicle headline, March 24, 2009, 5:27PM:

Financing for Dynamo stadium nearly a done deal

Houston Chronicle headline, March 25, 2009, 1:16AM:

Financing for Dynamo stadium still up in air

What changed in a matter of hours? Apparently, the Chron reporters got hold of county commissioner El Franco Lee, whose precinct would house the new $80 million stadium, and who said, “There is nothing that I’m about to put on the agenda at all. There’s nothing happening on that.”

Under the Dynamo’s proposed deal, the team would put up about $60 million towards a stadium, while the city and county would provide $20 million in tax-increment financing plus free land. The public money would repay bonds that the Dynamo have to sell first, which is where progress apparently has been made: Team president Oliver Luck said the “principal points have been agreed upon” with the BBVA/Compass bank. Even then, though, the deal still must go through the city council and county commissioner’s court for approval.