MLS to ATX #16: Legislative Attempts to Derail Austin FC Appear To Be Doomed

By | 2019-05-02T15:19:26+00:00 May 2nd, 2019|Austin Sports Law Blog|1 Comment

As most people know by now, with the Ohio lawsuit over and the Columbus Crew ‘saved’, Austin FC were officially announced as the 27th MLS club on January 15, 2019. The team is set to begin play in the spring of 2021 at a brand new, privately financed stadium at McKalla Place.

Austin soccer fans have been in a celebratory mood ever since, not least because they no longer have to worry about legal shenanigans, or trying to interpret poorly written statutory language. Or so they thought.

In March, a bill was filed in the Texas Legislature that seeks “to change the circumstances under which a single taxing unit may or may not abate property taxes of another taxing unit”. Apologies if your eyes are already glazing over reading that, but the bottom line is that if SB 1771 passes it would likely increase the amount of property taxes to be paid by Precourt Sports Ventures such that the viability of the team could be jeopardized.

In full disclosure, I worked in the Legal and Research departments at the Texas Legislative Council for a few sessions in the early 2000s, and I reviewed a lot of terrible bills. While I could write an entire blog post about the individuals behind this bill and their motives, I really don’t want to give them any more attention. The Austin Monitor has written a few articles on the subject, and so I will just add that it amounts to shithousery of the highest order*.

Fortunately, Austin FC were alert to the filing of this bill and they have been working with well-known lobbyists to monitor the situation. The bill was considered in public hearing on April 16th and PSV President Dave Greeley offered testimony to the Senate Property Tax Committee about the impact the bill would have on the team’s future. Representatives for the Greater Austin Chamber of Commerce and the Greater Austin Hispanic Chamber of Commerce also spoke against the bill.

The biggest problem for Austin FC was not so much the subtle shift in tax policy, rather it was the effective date of the proposed legislation. As introduced, the new tax laws would apply to any sports facility “completed after January 1, 2019”. Although the lease between PSV and the City of Austin is complete, and the determination of property taxes has been made, the new Austin FC stadium has yet to even begin construction.

In listening to the comments of the chair of the Senate Property Tax Committee, he appeared to be more concerned about the policy itself rather than the effective date. And he didn’t seem motivated by attacking Austin’s MLS future. The April 16th hearing closed without any questions being asked of President Greeley, and until April 30th, there had been no further action on the bill.

In the meantime, I’ve had a lot of texts and emails asking me if I was worried about this bill. I spoke to a few former colleagues at the Legislature and basically no one thinks this bill has any chance of getting out of committee. There is a small possibility that the language of this bill could be amended onto something else, and there are a couple of bills that would likely fit. But those are big bills with a lot at stake and it’s unlikely members will let a bill that hasn’t even made it to floor in either chamber for a vote onto an important bill.

And I’m even less worried after what happened on Tuesday. Senator Bettancourt, the chair of the Senate Property Tax Committee introduced a substitute bill which changed the effective date of the law. He added clarifying language that the bill would not effect any leases that had been granted prior to September 1, 2019.

His comments were clear that he did not want this bill to effect anything that already been agreed in Travis County, saying “We also don’t want to try to redo existing deals that are on the table”. This means that anyone with a deal in place will be grandfathered in, and governed by current law.

Bottom line – the City of Austin and Austin FC have a deal in place and a lease that has been signed to bring Major League Soccer to Austin, and even if SB1771 now passes, there wont be any legislation out of this session that is going to change that.

*Shithousery defined.

 

 

One Comment

  1. Kevin Fricke May 2, 2019 at 6:18 pm - Reply

    Thank goodness. Let’s move on. Austin FC is here to stay!

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