News: Dynamo Stadium - City & County Approve Deal

I'm not sure if there's a relevant connection between noise and safety concerns, and convenience using MetroRail. Let's not forget that light rail has and always will controversial in some quarters. I'm sure former Mayor Bob Lanier turns his head away every time comes near any of the tracks. I'm not interested in the the prejudices of those who oppose light rail simply "on principle" or because it's different.

I've ridden several of the world's largest transit systems and I can vouch for their speed and convenience. Of course they are confusing to the unitiated, but all can be easily navigated after a few trips. Let's stop the hand wringing until the thing is finished.

 

Anyone who expects WSC to post anything positive about anything is being unrealistic.

 

My uncle and cousin both work for centerpoint and have seen what the stadium will look like and their description looks exactly like that stadium in the picture. They specifically said there was only one overhang.

 

And the overhang is on the north end of the stadium?

I'll continue to be skeptical.

 

my imaginary friend works at Populous and says no chance.

 

My BFF CC has said on Glenn's show that they want two overhangs.

 

http://www.chron.com/disp/story.mpl/metropolitan/7173451.html

 

From that story about the financial problems of the Harris County/Houston Sports Authority.

They should have added "and the Sports Authority is not funding any of it" but they didn't.

Having the Dynamo Stadium involved with the Sports Authority may turn out to be a bad idea but once the County came in on the deal it was probably inevitable. The City and County would have had to create an entirely new organization otherwise.

 

bwahahaha.

is there a need to bump the conversation back from December where westside, nbrooks and myself were saying that HSA's (in cahoots with the EFL-crowd) involvement could turn into a p.r. nightmare and how they were either crooks or incompetent (but others thought we didn't know what we were talking about because, well, they had lunch with Oliver Luck!!!). i even provided pie charts of where this bond was going....in the crapper.

we need to get shovels in the ground ASAP before these clowns undo all the good work that has been done.

 

Not sure I understand your glee here. Because you might be right? OK, so you might be right, what do you get? A cookie?

Did anyone here have any power to change the deal with the City and County? Would it have been worth it for the Dynamo to say "Thanks, but no thanks" to the whole deal when the City and County decided they wanted the Sports Authority involved? Is that what you would have preferred.

I don't remember anyone saying that having the HCHSA involved was a good idea, just that it made sense from the City and County standpoint. I could be wrong about that.

If this screws something up for the Dynamo stadium, it screws something up for the Dynamo stadium. That's bad.

 

yes. there was still a chance for AEG to convince EFL that they preferred non-HSA involvement. make a political contribution, some scholarship money in his community, something, anything.

you are wrong. peeps were going on about us being "debbie downers" and that we were uninformed. which we were clearly not. can't say much more without compromising my client list or what i know or don't know about the Houston business community.

of course its bad (if it happens). which i why some of us did not want HSA involvement. that's the whole point!

i frkn praying right now that all the funding papers are signed. that they are not sitting in someone's drawer at AEG or BBVA awating someone to get to it. let's start the construction tonight before it becomes a political hot potato(e) and the players involved on a County or City level have second thoughts about risking their political future linked to a stadium for a sport played and watched by illegals. the yahoos at HSA are blessed that they're in a business friendly city/county/state otherwise there would be some sort of prosecutor at some level poking their nose around to see if there were any shenanigans.

 

I guess I don't know enough to say that there might have been something done to keep the HCHSA from getting involved. If there was, I would have wished that from the start as well.

Somebody calling you a "debbie downer" doesn't mean they were wrong. Lots of people predict doom and calamity about lots of things. Sometimes they are right and sometimes they are wrong. I guess I prefer to stay positive about things. Especially those over which I have no control.

On your last point, the Sports Authority is involved. We can't turn back time. It's a sunk cost. I didn't want HCHSA involvement but, as throughout the entire process, I can really only hope for positive outcomes. I will continue to do so.

 

with holding comment, but very important quote in article:

 

But that quote has to do with the debt on Reliant, MinuteMaid, and Toyota Center that the HCHSA is financing. HCHSA is not financing any debt on the Dynamo Stadium. It cannot. It is taking a purely administrative role in managing the City-County ownership of the stadium.

At least to my understanding.

 

You're right. As I understand it, HCHSA can't finance anything for the Dynamo without voter approval. Besides, isn't BBVA covering all this and we're paying them back (a rather simplistic way of putting it, I'm sure)?

 

correct, we as Dynamo fans all understand that.

i'm referring to the political albatross if they have to default and the cost of owning a home in Harris County has to be increased to cover the debt. not to mention that if HCHSA has to close it doors what happens to the "administrative role" they're playing in the construction/subsequent managing of the Dynamo stadium? what happens to the political clout given to the project by the El Franco Lee/Gene Locke/TSU crowd? are they going to fight for this project if this gets worse in the next month and peeps start getting cold feet or are they going to disassociate themselves? how about future city/county improvements on a project that can be tangently linked to the HCHSA debacle?

i almost forgot - what if this does become a criminal investigation? i mean we ain't talking about $1,000,000 here, we're talking hundreds of millions.

too many questions and i don't think anyone of us has answers.

 

You all had to know Westside was going to chime in on this. Especially for you, *rey*. To boot:

1) The Sports Authority was formed to finance and build the Houston stadiums or arenas using the authorized car rental tax. The original idea/charter was to assist in developing the projects, construct the stadiums, and then have a very limited administrative role until the bonds were retired.

At some point in the Sports Authority lifecycle, after Toyota Center was built, the board members and staff (including OL) decided to try to expand the original charter or intent of the Authority and have them become involved in all sorts of event promotion, tourism, etc. It was mostly self-serving; keep the unnecessary administration and management group going and everyone keeps well-paying jobs and the Board members can throw around some political weight.

It also became another area for political patronage paybacks, for certain law firms (cough, cough, Andrews & Kurth) and banks and construction and engineering firms to get business and then subcontract some of that work to certain other firms. It's hardly coincindental the way this went down at the end with Gene Locke, El Franco, Friedman (i think he was El Franco's campaign fund chair) all being brought in to a deal that they are not putting up any money for.

2) Financing - the debt payments on the Sports Authority bonds are supported by the rental car tax and revenue projections made previously that were most surely overly optimistic (they all are when you are trying to get a deal financed).

I have not looked at the financing documents in detail, but I assume that they are non-recourse as that is what has been implied. That is, the bondholders or issuers only have recourse against the Sports Authority and its assets/facilities, not against the Harris County in general. Thus, if the HCSA defaults on the bonds because tax revenues are short, the bondholders only can get at the stadium assets. Because of this, the HCSA had to buy bond default insurance. Unfortunately, they bought from MBIA which I believe was severly downgraded in terms of its credit rating and made the issuer (Chase) buy them back from some of the bondholders. When that event happened (basically, your insurance company was no longer A-rated), it allowed Chase to accelerate some of the payments or created a shorter term loan with a balloon payment. It's like going from a 30-yr mortgage to a 10-yr mortgage and that is why there is a cash crunch now.

3) The real issue - the bondholders likely only have recourse against the HCSA and its assets, so theoretically according to the Sports Authority members the County is not at risk.

However, if Harris County lets the Sports Authority default on its bonds and leave the bondholders holding the bag, there will be NO WAY that the County or other County agencies will ever be able to issue debt at the terms they currently get. If they jerk the banks over, they'll pay later on. The Authority bonds are not guaranteed by the County but they were priced with a somewhat implicit guarantee - which is why if the County has to "loan" the Authority money to refinance or cover shortfalls they will do so.

The three-card monty the politcians play is that they say that local property taxpayers are "not on the hook" and that is somewhat true. But if Harris County kicks over $50M to the Authority on a loan or other debt retirement mechanism, where does that money come from? Local property taxes by Harris County taxpayers. It will never be a direct subsidy to the Authority technically but it will be a de facto one.

4) How does this potentially affect the Dynamo since there are no Sports Authority funds involved? Well, first of all, it points out a complicating factor that *rey* and I yelled about on this deal - you've brought into the deal a politically unpopular and completely unnecessary entity that is probably adding little to no value to the project and certainly no real dollars. I still question the necessity of the Sports Authority being involved since the funding mechanisms for this deal are all from non-Authority sources and programs and it was never proposed to have a role until the very end.

Second, I believe that the final deal will reflect that the Sports Authority will nominally own the facility for the duration of the lease. What might that do? It might put the Dynamo stadium into the group of assets that the bondholders would have recourse against, even though the Authority isn't putting up any of the funds. I'm starting to think that maybe the Authority was pushing for this to help shore up their proforma balance sheet as much as it was to get the government payola machine running. If they own it, it will be on their balance sheet as an asset with AEG showing the liability on their books.

Third, I fear a late extortion-type attempt from the Sports Authority to squeeze some upfront cash out of AEG to get the deal done. The Authority debt problem is not a long-term revenue problem - they can impose rental car taxes for the next 60 years if they want. The interest will be absurd but it will get paid off. The more immediate need is short-term cash to cover debt payment or to kick into a refinance.

Lastly, it will just engender more animosity toward the Dynamo and their fans, even though the team is paying for most of the stadium. McNair and McLane and the Rodeo have almost been minting money thru their sweetheart leases and deals with the Sports Authority.

I've never liked the Sports Authority - it seemed like a big political favor cesspool that didn't have much use after the buildings were opened. It probably became a politcal necessity to get them involved at the end - a legal shakedown tactic by select County commissioners and their supporters.

 

^^^^

even though he went Eguzki on the length, the above is a good overall summary of events. i suugest reading it twice.

if i was a conspiracy nut, i would even suggest that Oliver Luck's timing to finally leave for the W. Virginia job was a way to get out of Dodge before his name was also ran through the mud. but alas, i'm not so i'll chalk it up to coincidence.

 

It was my Kaczynski-like manifesto contribution to the board.

 

Heeeeeeeeeeeeey


You silly uncultured Americans, you need my europeanism, my love for the arts, my misunderstanding of European, Latin American and MLS soccer.

 

With college football coming soon I must say... "Not so fast my friend!"

WVU came looking for Oliver, not the other way around and if it's not obvious being WVU's AD is a step up from running the Dynamo. If he wanted to get out of town quick, he would not have told WVU they would not get his full and undivided attenetion utill the stadium deal was in place.

With that said, the Sports Authority is definitely a political machine that rebranded what it does after the stadiums got built, there is a good and bad side to that... on the good, the Dynamo might not even be here without the SA.

 

Someone help me out....if AEG's historical modus operandi is venue operation (eg, Home Depot Center), and AEG is borrowing and/or paying the vast majority of the funds, with the County abstaining and the City providing a pittance with strings attached, why is the Sports Authority involved and/or in any management role? Is AEG planning on being bought out of this stadium like RB Arena? Is there a stage involved? That seems to be an AEG "tell," Home Depot aside. Was the County going to buy out AEG?

Further thought. Sports fans with a historical sense would remember the Texans exist because the voters initially drew the line on renovating/building a new playpen for Bud Adams, who then moved his team and middle finger to Tennessee. Wouldn't, "we're not taking County money so we don't need County involvement" have been a pretty untouchable sales pitch in our conservative little County? Which goes again to why is the County involved? Did they threaten to hold up something the County could control, if they refused to provide money? I mean, we know they procedurally blocked it for a while......what was the hammer......or were they bluffing and the Dynamo should have gone to the papers and TV screaming bloody murder?

People do realize we are still paying for the Dome, much less the more recent stadiums? You look at Cincy and some of the other recent stadium splurges and the voters/taxpayers have been pillaged. It was thought out about as well as subprime mortgages, but no one really sunk their teeth into the issue in our last elections so it's below the radar. If people had a clue they'd be out with pitchforks.

 

Harris County is involved because Bill White involved them.

After a year or so of negotiation between the Dynamo and the City just when it looked like everything was going great - White suddenly decided that the County needed to be involved. This was originally going to be a City/Dynamo deal and for whatever reason (in my opinion White knew he was going to run for Guv and didn't want a City Stadium around his neck) he tossed it to the county.


As we all know - that stalled everything for nearly 18 months until White was out of office and Annise Parker got the whole thing working again.

So now the County is on board - they obviously want their fair share of the spoils (the real estate). It's now a 50/50 partnership between City and County and the logical entity to run the operation is the HHCSA.

The reason we are here is solely because of Bill White and his failure to complete the deal when he could have - he could very easily have dedicated the extra $10 million TIRZ funding.

I'm willing to be corrected on this matter.

Don Juego?

 

no, they don't.

most citizens don't think beyond their next meal. besides, its just easier to blame the illegals.

 

yet still...