In the mid ’90s, there were two sports facilities in Houston: the Astrodome and the Summit. That was all that was needed until it wasn’t. Between 1992 and 2002 (even later if you could the Dynamo’s Shell Stadium), there was a race to seemingly build as many stadiums as possible spurred by the demands of local teams including the Oilers, who leveraged the issue into a new deal in Nashville.
Not wanting to see the Astros and Rockets follow a similar path, the city narrowly passed a referendum in 1996 that would allow for the building of Daikin Park. Another referendum in 1999 with similar designs for a new basketball arena failed, but it was resurrected in 2000, passing easily. Then, there was the Texans, a team very few thought the city would get but, when it seemed closer to reality, the county took on the responsibility of a new stadium which became NRG.
In roughly a decade, the city and county agreed to spend hundreds of millions of hotel occupancy and car rental taxes on stadium facilities. In the case of the Rockets and Astros, those costs were shared with the owners of the teams (Leslie Alexander and Drayton McClane at the time). The Texans, however, paid virtually nothing.
That brings us to today when the Texans are apparently considering tasking the county with a new facility to replace NRG thanks to millions of dollars in repairs and upgrades the facility needs currently according to a report from the Houston Chronicle. This one particular paragraph about what the city and county currently owe caught our eye.
The Harris County-Houston Sports Authority, the joint venture that financed Houston’s stadium-building spree in the late 1990s and early 2000s, still owes $1 billion in principal debt on the bonds that paid to build NRG, Daikin Park and Toyota Center. It is not scheduled to pay them off until 2056, according to financial statements.
Yikes. The good news is that the Rockets and Astros have to pay pretty significant amounts for their leases and they are both engaged in updates to Daikin Park and Toyota Center. Rockets owner Tillman Fertitta touted some of those updates prior to the season, one’s that included a new scoreboard, sound system and other anticipated upgrades. Similarly, the Astros have remained committed to upgrading their stadium and it remains a premier ballpark.
On the other hand, there are the Texans.
The Texans also have benefited from a team-friendly deal at NRG Stadium for the last two decades. The team put up revenue from permanent seat licenses toward the construction of the stadium, but it does not have to contribute toward most maintenance costs, unlike the Rockets and the Astros. The county is on the hook for those costs at NRG Park.
And the Texans often get more money in tax rebates than they have to pay in rent, according to financial audits – meaning the government essentially pays the team to play at NRG.
Upgrades and repairs to NRG are already expected to cost over a billion dollars according to recent estimates. So, it might make sense to the Texans to argue for a new facility given the costs. But the funding mechanisms for these stadiums are already stretched thin. It’s very likely the county doesn’t have the capital for a new venue.
Fortunately, in new lease negotiations with the Texans, a new building hasn’t been broached by the team, but the very fact there are stories popping up about it signals it is on someone’s radar. The city is in no position to go through yet another stadium spending spree and, in the case of the Astros and Rockets, they don’t appear to need to do it anyway.
But, the Texans may want to force the issue. Could we end up in another standoff with an NFL team over an aging stadium the way we did in the early ’90s? Let’s hope not.
