Pearland ponders $53 million sports facility

Discussions about building a $53.7 million amateur sports facility in Pearland are ongoing, amid City Council concerns about the cost.

During the July 11 council meeting, Matt Buchanan, president of the Pearland Economic Development Corporation, updated elected officials on his team’s idea to construct a 181,500-square foot facility on a 13-acre site near the Texas 288/Beltway 8 intersection.

He pitched the project as one that would increase the city’s sales, property and hotel/motel taxes by introducing the sports tourism industry to the city. He said the facility also would complement and add to city-sponsored recreation activities as well as relieve “programming space pressure” from area school districts.

The proposed building would include eight basketball courts; 16 volleyball courts; leasable sports medical and performance training areas; an indoor synthetic turf field; batting cages; multi-purpose fields; pitch tunnel; concession area and family fun center with games and other active entertainment choices, as well as 741 parking spots.

Pearland’s Economic Development Council is proposing a $53 million sports facility in the city’s Lower Kirby area.

Pearland EDC

Early cost estimates put the facility – which is expected to host local clinics, camps and a variety of sports programming and up to 47 weekend tournament events annually by operational year 5 – at approximately $53.7 million. Planners acknowledged those figures could change.

According to PEDC’s presentation, “the net financial impact of facility operations ranges from a deficit of $3.3 million in year 1 to $2.5 million in year 5. The estimated annual debt service will be $3.6 million.”

During his presentation, Buchanan said those costs would be covered by facility-generated revenue and by the Pearland EDC, which collects a ½-cent sales tax, in addition to hotel/motel taxes via the Pearland Convention and Visitors Bureau.

However, Councilman Jeff Barry had his doubts and worried the city would potentially have to offset debt payments if facility predictions, particularly how many tournaments it would host, don’t pan out.

“It’s a leap for me to say I’m really excited about this project,” Barry said. “It will need to have a zero-dollar impact on our maintenance and operations budget for me to even consider it at all.”

Councilman Tony Carbone worried about the debt.

“To borrow $50 million with a $3.6 million debt service for 20 years, I struggle with that. Those are big numbers and a huge commitment that I don’t think I can get behind at this time,” he said.

During the PEDC presentation, Buchanan presented the council with a five-year pro-forma detailing the proposed facility’s event and programming projections, associated revenue and expenses as well as new tax revenue generation. It also estimates a total economic impact of $15,727,590 in year 1 of operation to $21,814,929 in year 5, including 95,931 overnight visitor days in Pearland and nearly 29,000 local room night rentals a year.

Buchanan said the sports facility is being proposed as a “catalyst” to commercial real estate agency NewQuest’s proposed $350-million mixed-use entertainment district in Lower Kirby.

During the July 11 meeting, Heather Nguyen, a properties development partner with NewQuest, talked about her company’s proposed development, which has been in the works for three years. The plan calls for more than 1,000 multi-family units, over 100,000 square feet of entertainment space and nearly 200,000 square feet of planned retail. A hotel/conference center is also a possibility.
She said, since its inception, it’s been adapted to mesh with the proposed indoor sports facility, which would likely be built within walking distance.

“Sports (facilities) bring in so much more traffic, so when we found out about the sports facility we really changed our game plan to focus more on creating an entertainment district,” Nguyen said, adding the sports facility would allow NewQuest to attract better dining and entertainment options.

“We have to create a destination for people to be willing to step out of their homes, and we have to create a family experience. The sports facility would bring families from all over Houston so we can elevate our entertainment concepts to attract them (to the NewQuest development),” she said.

Although Nguyen said the sports facility’s completion doesn’t constitute a make-or-break scenario for NewQuest’s project, it would be more difficult to attract certain higher-quality amenities without it.

Also on hand was Evan Eleff with Sports Facilities Companies (SFC), which has been working with the PEDC to conceptualize the sports facility idea and to attach revenue/expense/economic impact projections. The company works with cities around the country to analyze, develop and manage similar facilities.

Eleff said the economic impact numbers SFC provided for Pearland are considered “conservative” and called sports tourism a “recession-proof industry.”

“People prioritize spending money on their kids for sports, even when they cut back on vacations, restaurants and going to the movies,” he said. “They make the (sports) tournament their vacation, but that doesn’t happen when you put down some fields in the middle of a parking lot. It happens when you create a destination.”

Eleff said 2022 has, so far, been the best year for sports tourism across all its facilities. He said the youth sports industry has grown from $45 billion in 2019 to anywhere from $66 – $80 billion in 2022.

Nevertheless, he urged the council to look at the project with a critical eye and pledged as much data as needed.
Mayor Kevin Cole said the council will closely review the PEDC pro-forma and make a decision. City staff said NewQuest needs guidance on the sports facility within a month or two.

“We have some work to do,” he said. “We have to dig in and make a good informed decision about what’s best for our community.”

Leave a Comment

Your email address will not be published.