Leander City Council approves forward motion for XPark USA

Nonprofit could fund $80 million facility

The Leander City Council on Thursday night authorized city staff to negotiate a development agreement and financing plan for XPark USA, an $80 million extreme sports facility project.

The Council voted 4-2 on the item with councilwomen Kirsten Lynch and Michell Cantwell casting opposing votes. Mayor Pro Tem Jason Dishongh chose to recuse himself from the discussion because his company has the potential to do title work on the property if the deal is executed.

While the Council voted to allow city staff to delve farther into the possibility of bringing XPark USA to Leander, it does not guarantee it will be built. The approval allows city staff time to research finances and development and bring a presentation back to the Council. Following the presentation, the Council will then vote to approve or not approve the plans.

Leander City Manager Kent Cagle said the process may take 60 days and could cost the city $20,000 in staff time, but because it is a negotiation process there is no way to put a concrete number or price on the time. A development agreement for the park was passed through the City Council five years ago, but it has since expired. Cagle said staff will use the agreement as a starting point and city staff will work with a financial adviser to develop the plan.

The developers, Leander Capital Investors, requested the city to create a nonprofit organization to back the $80 million project. When the project initially came to the Council, the developers planned on financing the project privately, but have failed to do so and told the city the nonprofit financing is their last option.

According to the group’s exclusive website, the facility is a one-of-a-kind multi-venue sports and entertainment complex. The 120-acre park will include skate and BMX ramps, a motocross track, paintball fields and a 10,000-person amphitheater, which could host local concerts and events. A main clubhouse and camping facilities on site will allow for summer camps and other programs, developers said.

Cantwell said the project will cost $40 million, though the developers have asked for double the amount to account for debts in case the business is not as successful as anticipated. She said she could not vote to move the project forward knowing they are asking for more money than they need.

“If it’s a legitimate project that can stand on its own merits, it shouldn’t require the city to tie its name to it,” Cantwell said.

Cantwell is not opposed to the XPark and has no issues with the development of the business, she said, but she has strong issues with the financing and potential city time spent on the project.

“I won’t vote for that funding mechanism,” she said. “It’s a waste of time and energy for our city staff to move forward.”

Austin has used similar nonprofit financing for projects like the Hilton Hotel by Austin Bergstrom International Airport. Dallas used nonprofit financing to build its convention center hotel. Cagle said the potential creation of the nonprofit is the most controversial part of the project.

“I’m not going to say it’s unusual, but it’s not typical,” Cagle said.

The city’s only involvement with the project would be creating the nonprofit, Cagle said. If the project is executed, the city will not be involved with the business operations. Money for the nonprofit would be collected by selling bonds to investors.

“The city would not be responsible for any of the debt,” Cagle said. “If the project were to fail it would be on the bond holders.”

One of XPark’s drawing factors is the economic benefit to the city. Cagle said the park could operate year round and send people to the city. Additionally, Austin’s potential to be a future host for the X Games could benefit the park by serving as a daily practice area for participants.

“There will be new jobs and sales tax would be generated,” he said. “If it’s as successful as [the developers] say it will be, there’s potential for other developments like hotels and restaurants.”