You're not considering the enormous rebates that the Texans are getting for renting from the County.
When you look at the arrangement as a whole, the McNairs and the Texans are coming out pretty darn well.
******************
Texans have paid $4M in rent since 2002. Rockets paid over $250M.
Dylan McGuinness10-13 minutes 3/21/2025
As county leaders and officials with Bob McNair’s nascent football team were
closing in on a deal for a new football stadium in the early 2000s, the Texans landed a late concession that would prove to be a financial triumph for years to come.
The
Harris County-Houston Sports Authority, a joint city-county venture responsible for financing all of Houston’s major sports stadiums, would take out bonds to build the new football facility for the Texans and
Houston Livestock Show & Rodeo. It would pay off the debt over several decades, mostly with money from increased taxes on rental cars and hotel rooms. The tenants would each pay $1.5 million a year in rent that would go toward the bonds as well, and contribute some money from the events they hosted, including taxes on parking and tickets.
But there was a late snag in the negotiations: Financial analysts approving the framework wanted the tenants to guarantee more money. To address that snag, the Texans agreed to pay a higher rent, upping their annual payment from $1.5 million to $4 million over the course of the 30-year contract.
In exchange, the team would get a major tax break. Instead of paying taxes on parking and ticket sales, it would receive rebates from the sports authority – and the rebates would not be capped. They were in addition to a rebate on local sales taxes for all NFL-related transactions.
These concessions have proved costly for local officials – and a boon to the Texans. From 2002 through 2023, the rebates have totaled roughly $58.9 million in today’s dollars, adjusting for inflation. The sales tax rebates have added another $58.5 million to the team’s coffers, helping to wipe out – nearly entirely – the rent the team agreed to pay over two decades ago.
As the Texans consider whether to push for
public money to build a new football stadium, a Houston Chronicle analysis shows the team’s current lease agreement with the county has dramatically benefited the team and its billionaire owners, saving them over $100 million when compared to their Houston professional sports peers, the Astros and the Rockets.
Meanwhile, the Texans, the Rodeo and Harris County have started negotiating a new lease as the original 30-year deal nears its end point in 2032 – a process that could significantly alter the operating framework at NRG Park.
Two key factors led to significant savings for the Texans in its original lease. First, the team’s rent payments were essentially wiped out by the tax rebates, a perk that neither the Astros nor the Rockets enjoy. And second, the county insisted on owning maintenance efforts – and their often exorbitant costs – at NRG Stadium, whereas the Rockets and Astros have had to cover those costs at their facilities.
Since NRG Stadium opened in 2002, accounting for the rent and the tax rebates, the Texans have paid just $4 million total when adjusted for inflation. The Astros and Rockets, by comparison, have paid $242 million and $253 million, respectively, in rent and other lease payments since their facilities opened in 2000 and 2003.
The result for the Texans is one of the best rent structures – if not the best – in the NFL
. Geoffrey Propheter, a professor of public finance at the University of Colorado Denver who studies stadium financing, said the only NFL teams who pay less either own their stadiums or have to cover maintenance costs. The Texans’ average rent payment is what you would expect from about two McDonald’s locations in Houston, he said.
“Being the landlord of a McDonald’s would be a wiser investment than being the landlord for the Texans under the current lease terms,” said Propheter.
And since the county took charge of maintenance, the Texans have not had to devote nearly as much money to upkeep, saving tens of millions of dollars.
The Astros say they have spent $197.4 million on maintenance and capital projects at Daikin Park since Jim Crane bought the team in late 2011, or roughly $15.2 million a year. The Rockets report spending $70 million on Toyota Center since Tilman Fertitta purchased that team in late 2017, or $10 million a year.
The Texans say they have spent $68 million on capital projects at NRG Stadium since 2002, along with another $54.5 million to pay off additional loans for capital projects they requested, for a total of $122.5 million, or $5.5 million per year.
Texans officials stressed that the team’s lease does not impose the same responsibilities for maintenance as the Rockets and Astros. The county pushed to take on that burden at NRG Stadium, and it is the county’s own spending that should be compared to the other teams, Texans officials said.
The Texans are not obligated to cover maintenance projects, and there is little incentive for them to do so. Since the team does not control the stadium’s offseason calendar, and the money-earning potential that goes along with it, there is less reason for them to invest in the facility, team officials argued. The Rockets and Astros control their facilities year round.
Still, the county’s initiative to take on maintenance means the Texans do not have to cover those costs. And the rent rebates mean the team has relatively few carrying costs for its facility.
“We have abided by the terms of our lease that was signed over 20 years ago and stepped-up multiple times to pledge support to the ongoing needs of the building with contributions outside of our lease structure,” said Omar Majzoub, the team’s director of communications. “In collaboration with the Houston Livestock Show and Rodeo, Harris County and HCSCC, we have explored ways to adjust the structure of the lease that would allow for a more sustainable plan moving forward.”
The Texan rental advantage .............
THE REST OF THE STORY
