Dec. 05–After months of swirling rumors, the PGA of America is poised to move to Frisco and create what it calls the “Silicon Valley of golf.”
Tuesday afternoon, Frisco officials approved the city’s share of an incentives package that would total more than $160 million — more than twice the $64 million Toyota received when it agreed to bring its headquarters here along with 4,000 jobs.
To snag the deal, Frisco emerged from a pack of more than 200 contenders across the nation seeking to lure the association from its home of nearly 40 years in Palm Beach Gardens, Fla.
In Frisco, the association will anchor a 600-acre, mixed-use development that includes championship golf courses, a resort hotel, conference center space and the association’s headquarters.
Its new home will house at least 100 workers and cost the PGA at least $30 million to build. The association eventually hopes to increase the local workforce to 250.
The development, to be located at future extensions of Rockhill Parkway and Legacy Drive near Frisco’s northern border, will cost more than $520 million to build, using public and private funds.
Frisco officials estimate it will have an economic impact of more than $2.5 billion over the next 20 years.
Early on, Frisco was the hands-down favorite, officials with the Professional Golfers’ Association of America told The Dallas Morning News in advance of the official announcement.
“Frisco frankly jumped off the page in a number of ways,” said Seth Waugh, chief executive of the PGA, which represents nearly 29,000 members in 41 sections across the country.
“While the economic [incentives] are important, and obviously that’s a big consideration, the dream of what we could do at Frisco became really the biggest factor for us in terms of why we picked it. We couldn’t imagine better partners.”
In Frisco, officials said, PGA golf will have a single multi-functional campus that will help everything from annual meetings to a potential Ryder Cup function seamlessly. The development, which will be open to the public and partly owned by the city, is expected to open in 2022.
PGA officials said the group will use temporary space in Frisco before the project opens but did not have a sense of how many workers would be coming and when they might arrive.
The venue, which is still in the pre-design phase, is already scheduled to host the PGA Championship in 2027 and 2034. The PGA Championship, one of golf’s four major events, was last here in 1963 at the Dallas Athletic Club.
Founded in 1916, the PGA of America largely includes professionals who make their living in the field, from instruction and coaching to course management. It is separate from the PGA Tour, which operates the men’s professional tour in the United States.
The organization’s new campus will rise from land that formerly was part of the estate of Bert Fields Jr. It’s part of 2,500 acres being master-planned by Hunt Realty Investments.
Courses, a resort and more
In addition to the association’s 100,000-square-foot headquarters and education facility, the project will include two 18-hole championship golf courses, a nine-hole short course and practice areas for a total of 45 holes. It also will include an estimated 35,000-square-foot clubhouse; a 500-room Omni resort; and a 127,000-square-foot conference center.
There will be roughly 40,000 square feet of retail space focused largely on golf-related items.
The three courses alone account for 540 acres.
The force behind the development will be a newly formed joint venture of three Dallas-based firms, Omni Hotels & Resorts, which is owned by billionaire Robert Rowling; Stillwater Capital; and Woods Capital. Jonas Woods was a key developer of the Trinity Forest golf course in Southern Dallas that is now home to the AT&T Byron Nelson.
The PGA’s Northern Texas Section also plans to relocate from Dallas to the new campus, which the organization said will offer “promising opportunities to pilot new programming” for all 41 sections of the organization.
The move comes as golf is facing challenges finding an audience among younger players and ethnic minorities.
On Wednesday, the association is expected to announce a deal with the University of North Texas, which is building a campus in Frisco, to enhance UNT’s curriculum in sports management and hospitality.
“By partnering with the PGA of America, UNT hopes to develop unique internship and volunteer opportunities for students, conduct research and collect data on behalf of the PGA and develop educational programs for the PGA’s 29,000 professionals,” UNT president Neal Smatresk said in a statement.
Waugh said a key aim of the project is to “grow the game and make it more relevant and make it into our kids’ kids game over time. To have the chance to do that, with a blank piece of paper, with an enormous amount of capital being infused by world-class partners that we share values with and a passion for the game …. It was just kind of a once-in-a-lifetime opportunity in our view.
“It’s something that we think if we get it right, could end up being sort of the Silicon Valley of golf.”
He said he envisions other golf-related businesses migrating to Frisco now.
But the project won’t be cheap. And it comes with one of the richest incentive packages offered in North Texas in recent years.
As part of the deal, Frisco will contribute up to $35 million toward initial development of the public portion of the project: The city of Frisco will spend $13.3 million; the Frisco Community Development Corp., $13.3 million; Frisco ISD will spend $5.8 million; and the Frisco Economic Development Corp., $2.5 million.
Once the project is up and running, Frisco will also provide performance incentives, which include a portion of hotel occupancy, mixed beverage, sales and property taxes generated by the hotel and associated retail on the site for 20 years. Those incentives are estimated to total between $52 million and $74 million.
Also, the state of Texas will contribute all the hotel and sales taxes, along with a portion of mixed beverage taxes, collected on the project for 10 years. The state grant total is valued at more than $62.5 million over 10 years.
In addition to the $2.5 million, the Frisco Economic Development Corp. is also investing $14.3 million over 15 years for the PGA of America’s headquarters relocation, job creation and PGA tournament incentives.
Separately, the city will extend Rockhill Parkway and Legacy Drive from Rockhill to US 380. Both roadways are on the city’s master thoroughfare plan and are being built about two years ahead of plan. Those costs were not included in the project cost.
The 25-year agreement calls for the golf courses, clubhouse, practice areas and the conference center to be owned by the city. More than 300 Frisco high school golfers will practice at the facility weekly.
The Omni Stillwater Woods team will own the resort and operate all aspects of the project except the PGA headquarters.
The Omni partnership will initially pay $100,000 a year in rent to the city. That lease will increase by 2 percent after the fifth year of the development agreement.
The Omni partnership will buy the land and convey it to the city. It will invest $455 million to buy the land and build the hotel, conference center, retail space, parking facilities and golf courses.
The land alone will cost nearly $60 million, Omni said.
Gil Hanse, whose recent work includes the Olympic golf course in Brazil, will design one of the championship courses. Beau Welling, who has had a long-term design relationship with Tiger Woods, will build the other.
If all municipal and state incentives are given, the total would be at least $163.7 million, a Frisco official said.
The golf association declined to compare the Frisco incentives with those offered by other communities.
Frisco City Manager George Purefoy said the incentives cover separate goals: building the public portion, helping encourage the headquarters move and offering enticements for future golf championships.
In addition to the two PGA Championships, the agreement calls for two KPMG Women’s PGA Championships and, potentially, a Ryder Cup to be held in Frisco.
The PGA estimated the value of the championships at $340 million, Purefoy said. That figure, along with estimates for the economic impact of the golf operations and conference center, went into the $2.5 billion estimate for the economic impact of the deal.
Mayor Jeff Cheney said he sees the project as a way to further solidify Frisco’s “Sports City USA” branding. The city is home to the Dallas Cowboys’ headquarters at The Star and to other professional sports teams.
The deal also allows Frisco to partner with an international brand and install a strong draw at the city’s northern edges.
“This will be a flagship project for the northern part of our city,” Cheney said. “This area is largely undeveloped. And so we’ve been, for a long time, looking for an anchor to this part of the city, and this will provide that anchor. We’ve been looking to have a destination-type hotel to kind of round out our tourism.
“We were always lacking a resort-style destination hotel, which this will provide the answer for,” he said, adding that the project will provide needed convention space.
“But also, the grander vision is we’re going to be partners with potentially transforming an entire sport. For the sport of golf, the epicenter will be in Frisco.”
Just before the project was approved by the city council, one council member said the project helps the city avoid the sameness that afflicts some suburbs.
“This council shares a vision to build a city that’s a unique city,” said Will Sowell. “Not just another suburb, but one that has its own culture. Tonight, we take another step to do that.”
Several council members commented on the long road to get to Tuesday’s vote. Some form of the project has been under discussion for at least four years.
Darrell Crall, PGA chief operating officer, noted that in the fall of 2014, Northern Texas section director Mark Harrison broached the idea of developing a relationship with Frisco and creating a golf course.
Frisco resident David Ovard, whose two teen boys practice golf every day, had a vision five years ago about golf in Frisco. He took that idea to the city, and Frisco officials now credit him with getting the ball rolling.
“I just had a vision for what could happen in Frisco knowing we do these public-private partnerships,” Ovard said. “It’s so good for the community, so good for the city, so good for the kids, and it’s good for business. It’s so good for everybody that it will come together. And I just believed it.”
In May, the association issued a request for proposals for a new headquarters and got 212 nibbles.
In August, in response to rumors about a Frisco deal, then PGA of America CEO Pete Bevacqua said the move was “certainly a possibility.”
When Omni joined the talks this spring, at the urging of officials with Stillwater, the project included neither the hotel nor conference center, said Blake Rowling, president of TRT Holdings, parent company of Omni. He is Robert Rowling’s son.
The PGA Omni will be a short drive from the Omni attached to The Star in Frisco.
But the brand, which is undertaking a major renovation of its Barton Creek resort near Austin, saw a need for a new resort in the northern reaches of the metro area. For Omni, the as-yet-unnamed Frisco hotel would be its 15th resort and at least its fourth affiliation with a major professional sport.
“We’re one of the largest operators of resorts in the country,” said Blake Rowling. “We have over a dozen resorts and over 20 golf courses we operate. And being a hometown company here in Dallas, and having a relationship with … the Stillwater guys prior to this deal, it was an easy phone call for them to make.”
Settling on Frisco, after the full scope of the deal came together, was also an easy call, according to Crall.
“The city of Frisco presented a very compelling vision that smartly merged our championship aspirations with a real focus on community and junior golf, with an opportunity to have a world-class headquarters,” Crall said, adding that the region’s central location and ease of air travel added points to Frisco’s bid.
“We have an opportunity to put a stake in the ground for championship golf in Frisco, Texas, in that incredibly attractive market.”
The association also noted Frisco’s ranking as the “best place to live” by Money magazine.
“Their big dreams for the future created a very compelling case,” Crall added. “We believed that … having a headquarters in Frisco made all the sense in the world.”
Staff writer Nanette Light contributed to this report.
Twitter: @krobijake @NanetteLight
BY THE NUMBERS
The PGA of America will leave its longtime home in Florida and relocate to Frisco. Key aspects of project:
600 acres: Total campus
540 acres: Space for golf courses
$520 million: Estimated cost of total project
$163.8 million: Minimum potential state and local incentives
100,000 square feet: PGA of America headquarters
$30 million: Minimum cost of headquarters
127,000 square feet: Conference center owned by the city
500 rooms: Omni resort owned by Omni and investors
40,000 square feet: Retail space
35,000 square feet: Clubhouse
100: Minimum number of workers in new headquarters
2: 18-hole championship golf courses, open to the public, owned by the city
1: 9-hole course, open to the public, owned by the city
2022: Tentative opening date
SOURCES: Omni Hotels & Resorts; PGA of America; city of Frisco
INCENTIVES AT A GLANCE
To bring the PGA of America to Frisco, the city and state offered:
$13.3 million from the city of Frisco
$13.3 million from Frisco Community Development Corp.
$5.8 million from Frisco ISD
$2.5 million from Frisco Economic Development Corp.
$14.3 million in long-term incentives from Frisco Economic Development Corp.
$52 million to $74 million from city of Frisco in long-term performance incentives
An estimated $62.5 million from the state in hotel, state and beverage taxes
SOURCE: City of Frisco
BIG TAX BREAKS IN TEXAS
These are among the largest tax incentives awarded to companies in Texas:
$802 million to Nebraska Furniture Mart to build retail superstore in The Colony (2013): The city spent $291 million on roads, utility upgrades and an on-site parking garage; $261 million to offset store’s building expenses; and $250 million to assist with a second “super retail store” at the site.
$600 million to Texas Instruments to build a chip plant in Richardson (2003): Property tax abatements over a 24-year period from the city of Richardson, Collin County, Plano ISD and Collin County Community College District.
$460 million to Exxon Mobil and Saudi Basic Industries Corp. to build a petrochemical plant in San Patricio County (2017): Property tax abatements from Gregory-Portland ISD and San Patricio County; Texas Enterprise Fund grant of $6.35 million.
$440.5 million to build Cowboys Stadium (now AT&T Stadium) in Arlington (2004): Voters approved $325 million in bonds to help pay for the stadium. The total also includes creation of a tax increment reinvestment zone in the area in 2006 that called for $115.5 million in road and flood control improvements.
$250 million to FedEx to build logistics hub in Fort Worth (1996): City of Fort Worth and Alliance Airport Authority issued $250 million in tax-exempt bonds to cover FedEx’s construction costs.
$233.4 million to Samsung to build a semiconductor plant in Austin (2006): Package included a $10.8 million grant from Texas Enterprise Fund; Manor ISD property tax abatements of $115 million; city of Austin abatements of $62.9 million; Travis County abatements of $44.7 million.
$146.7 million to Facebook to build data center in Fort Worth (2015): Package includes rebates from city of Fort Worth and Tarrant County on real and business personal property taxes spanning 20 years.
$135 million to build The Ballpark in Arlington (1991): Voters approved spending $135 million in sales taxes to build the home stadium for the Texas Rangers. The city paid off the debt 10 years early.
$133 million to Toyota to build truck assembly plant in San Antonio (2003): Package included $60 million from the state for training, infrastructure and employment services, and remainder from the city of San Antonio and Bexar County in property tax abatements, land and site preparation and a training facility.
$113.8 million to Cabela’s to build retail stores in Fort Worth and Buda (2004): The state provided $600,000 from the Texas Enterprise Fund and $20 million for highway improvements in Buda. Tax increment financing to reimburse the company for upfront costs amounted to $57.2 million in Fort Worth over 20 years and $36 million in Buda.
SOURCES: Dallas Morning News research; Good Jobs First subsidy tracker database; Austin American-Statesman; Fort Worth Star-Telegram; Houston Business Journal; San Antonio Express-News; and Texas governor’s office
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