Vision of Texas president Greg Fenves powered innovative partnership for new basketball arena

“What starts here changes the world.”

The iconic branding for the University of Texas served as the literal and figurative backdrop for the Thursday press conference that announced the partnership between the school, Oak View Group, C3 Presents, and new Minister of Culture Matthew McConaughey to build a world-class events center for the Longhorns basketball programs and the Austin music community.

Changing the world requires vision, leadership, and compromise. The type of strategy and synergy that often gets bandied about as meaningless corporate buzzwords, but provided the figurative foundation that will support the unique and forward-thinking public-private partnership to build the new arena on the Forty Acres. A figurative foundation that will result in the actual foundation becoming a reality in the near future — the plan is to complete the arena by 2021.

“It’s a truly innovative agreement that brings together multiple world-class organizations and brands to create one of the best college basketball arenas in the nation and a state-of-the-art venue for the city of Austin,” President Greg Fenves said.

As athletics director Chris Del Conte made clear on Thursday, it was the vision and leadership of Fenves that enabled a partnership as unique as the city of Austin.

“Just a year ago a week ago, I was sitting in New York City when the boss talked about coming to be the athletics director at the University of Texas and working for him,” Del Conte said. “I was inspired by his audacious goals for the university... and he talked about having a grand facility that we can provide unbelievable entertainment for this great city, but we needed a new venue for our athletics programs as the medical center will start to expand.”

And then Fenves demonstrated the audacity of his vision.

“You know, we’re going to build this at no cost to the athletic department or the university,” Fenves told Del Conte.

Even for an athletics director known for his own vision, Del Conte was skeptical, but also inspired. And while the two worked together to make it happen, Del Conte made it clear where the primary credit belongs for that accomplishment.

“Today, boss, this is really about your vision,” Del Conte. “What you wanted for the university is laid out here today. When you looked at putting that RFP out in February, I thought there was no way someone was going to participate in this. I just couldn’t wrap my head around the thinking.”

The partnership — described by Del Conte as the intellectual property of Fenves — demonstrates the president’s leadership, a trait so sorely lacking at the university in recent years.

What Fenves did was help pull together the two competing impulses for the Erwin Center replacement. One impulse was providing the Longhorns a more intimate basketball arena that creates a home-court advantage with a notoriously fickle fanbase. The other impulse was providing the city with another premier venue for large concerts.

For more than 40 years, the Erwin Center has served in an extremely capable capacity as a music venue and events center with a capacity of nearly 18,000 that has hosted acts like U2, Paul McCartney, Garth Brooks, and Madonna.

For more than 40 years, the Erwin Center has often served in a less than capable capacity as a basketball venue that fits the school.

When Steve Patterson was the athletics director, he attacked those competing realities with his characteristic lack of tact. And not nearly enough vision.

“The reality is that Austin has had a free arena for three and a half decades at no investment whatsoever,” Patterson said in 2014. “You look at the growth projections five years out, to be a top 25 market in this country and not to have invested a nickel in an arena is a heck of a position for the city of Austin to be in.”

Needless to say, Patterson’s remarks went over poorly with city leadership, though current mayor Steve Adler was less publicly opposed to the idea when he took over.

What Patterson’s comments illustrated the difficulties in financing the new arena. When the Erwin Center was built, it cost $34 million, a little less than $140 million in 2017 dollars. Patterson originally estimated a potential cost of $500 million for the new arena, though Thursday’s agreement will result in an arena initially estimated at a cost of $338 million.

Texas originally built the Erwin Center with university funds, but Patterson certainly wasn’t in a position to be able to raise several hundred million dollars. Even for Del Conte, justifiably known as one of the best fundraisers in college sports, that would have been a monumental challenge — the renovation of TCU’s basketball arena that Del Conte oversaw cost a mere $80 million, a quarter of what the Erwin Center replacement will cost.

Enter Fenves.

The president recognized that the demand for live music in Austin created a massive opportunity for the university — if the city lost those major acts that took their tours through the Erwin Center, it would represent a major loss in revenue. With Patterson, the miscalculation was attempting to leverage the benefits provided to the city over decades to force the city to pay for a new arena, when the real potential was in securing a private partner that would use those music and event revenues to profit from an initial investment in construction.

Fenves worked closely with city leaders like Adler where necessary — in particular, the new arena will re-route Red River St. to provide the necessary footprint for construction. However, his major play centered on the capitalists. Instead of trying to strong-arm public welfare from the city, he bet on the profit impulse understanding the potential inherent in the Austin market. And Fenves was right.

Over the last 10 months, the key task for Fenves, Del Conte, and the rest of the university leadership was finding the right mix of partners to pull off the audacious plan.

In Oak View Group CEO Tim Leiwicke, Fenves found someone with a similar vision. Formerly the CEO of the entertainments group Anschutz Entertainment Group that owned multiple Los Angeles sports franchises and entertainment venues, Leiwicke founded OVG after serving as the CEO for the group that owns the Toronto Maple Leafs, Toronto Raptors, and Toronto FC, along with other sport and residential properties.

Leiwicke brought a world-class understanding of the intersection of sports and entertainment to the table, as well as connections to Austin-based C3 Presents, which produces festivals like Austin City Limits and Lollapalooza in addition to partnering with the university for Longhorn City Limits, the pre-game concerts before home football contests this fall. In recent years, Leiwicke even tried to buy C3 Presents, which is now partnered with Live Nation.

C3 Presents will help ensure that the new arena, unlike the Erwin Center, will fulfill its purpose of providing Austin with a world-class concert venue. The partner for C3 Presents, Charles Attal, is an Austin native who reminisced about attending games and concerts at the Erwin Center as a kid and called this project a personal one for him.

The unexpected partner in it all was Matthew McConaughey, the Academy Award-winning Texas alum and superfan who is now the Minister of Culture for this project, a self-proclaimed moniker that McConaughey gave to himself.

When the negotiations started, Del Conte wanted to know what McConaughey was doing there.

“I’m the Minister of Culture,” McConaughey replied.

McConaughey missed the press conference on Thursday because he was in London, but he was present at all the negotiations. Now he’s helping guide the process to ensure that the venue can effectively fulfill its purposes as a basketball venue and event center without any compromises in either direction.

“The passion he has for this university and the passion he has for the city is unmatched,” Leiwicke said. “This is not a token. He is actively involved in the design of this building and so when we begin to show you where we’re headed with what this building is going to feel like, how this building is going to react, how we price out concessions, Matthew is going to be an active voice.”

As with Leiwicke’s connection to C3 Presents, the OVG CEO also had a connection to McConaughey, as AEG produced the film Sahara in which McConaughey starred in 2005. The two remained in contact after working together on that project.

Brought together once again by Fenves and his vision, Leiwicke and McConaughey are now lending their own vision to the multi-purpose venue. The arena will seat 10,000 for basketball games and expand to a capacity of 15,000 for concerts, though the plans are still in preliminary stages for how exactly the venue will wall off those extra seats for basketball games.

“It’s like a baseball stadium,” Del Conte said. “You don’t build it for the weekend series, you build it for the Tuesday game. A 10,000-seat arena is perfect and fantastic for us. A sold-out arena has an unbelievable impact on a men’s basketball or women’s basketball game.”

Del Conte suggested essentially having garage doors, but those would pose engineering challenges on that scale. The firm in charge of coming up with solutions is Gensler, a global design and architecture firm that executed concepts as varied as the Shanghai Tower, the Washington Post offices, and The Star in Frisco, the multi-use development housing the practice facilities for the Dallas Cowboys. Called the best in the business by Del Conte, the athletics director expressed his satisfaction with the initial ideas from the firm.

The university will control the venue and receive revenues from the men’s and women’s basketball games there, along with school and community functions. OVG will receive all the other revenue to pay for construction for the first 10 years, at which point the university will begin to receive a portion of those profits.

Naming rights for the venue are another aspect of the deal — there have already been inquiries as the university and its partners work together to determine the process and revenue split for awarding those rights.

For now, the Erwin Center remains operational and the basketball programs are set to remain based in the Cooley Pavilion next door until the school determines how to replace that recently-renovated facility in several years. Del Conte believes that it’s a first-rate facility, so the university plans on keeping it until it’s no longer serviceable.

Specifics aside, the confluence of circumstances started in motion through the vision of Fenves brought together a world-class sports and entertainment advisory and development group, a world-class event production and promotion group, and a world-class actor with unparalleled passion for sports and entertainment.

Just the type of vision that this project desperately needed.