[Wattleigh]

https://www.bizjournals.com/houston/...Pos=1#cxrecs_s

NRG Park needed millions in upgrades. It got the financing from an unusual source

By Chris Smith – Sports Business Journal
Jul 18, 2023

As Houston’s NRG Park neared its 20th anniversary last year, it had become apparent that the 350-acre sports and entertainment complex was in need of an overhaul. Its four facilities, which include NRG Stadium, site of this year’s NCAA men’s Final Four and the home of the Houston Texans, and the historic but currently unused Astrodome, needed upgrades to lighting, water and HVAC systems, as well as those controlling building automation and fire and life safety. Those are critical components for a set of facilities that host more than 5.5 million visitors per year, and yet it was unclear how the upgrades would be paid for.

“Anybody who runs a stadium and says they have enough money to run the stadium and do what they want is full of crap,” said NRG Park CEO Ryan Walsh. “These are very important infrastructure needs that we had, coming up on the 20 years, and we didn’t really have a funding mechanism. And the county certainly wasn’t just going to give us money.”

Walsh ultimately turned to Johnson Controls International, the building technology and services company that was managing NRG Park’s chillers and boilers. Not only could JCI provide the necessary facility upgrades, but it would also finance the $34 million project while guaranteeing cost savings of $54 million across the next 20 years. The partnership would effectively cover upgrade expenses and the cost of capital while ultimately leaving Harris County, which owns NRG Park, with a financial surplus. It blew away any competing financing options.

“Even the county, who has a really great buying power on the market, they were looking at 3% to 4% on the return,” said Walsh. “Over the life of 20 years, that’s tens of millions of dollars, almost, from the standpoint of looking at cost savings. So for us this was an absolute no-brainer, when it’s essentially 0% interest for all intents and purposes, and you still are able to put back into the coffers at the end of the project.”