Plans for Major League Soccer
Since its founding in 2012, Sacramento Republic FC aspired to become a part of Major League Soccer (MLS), reportedly making plans to join even before Republic FC saw their first opponent on the soccer field. Now, there is growing momentum around the prospect, bringing the newest MLS expansion team right here to Sacramento.
Local die-hard fans of the game, along with local politicians, are making the case for big-league soccer in Sacramento. Sacramento originally approved the construction of a 20,000 seat stadium project in November of 2016.
Republic FC officials first submitted bids to MLS in 2017. Initially, according to Mayor Steinberg and the City, the proposal faced light resistance from MLS over the desire for more private investor involvement. In a 2017 update on the project, Sacramento Kings minority owner and Republic FC investor, Kevin Nagle, made a declaration on the team’s website. “One area [of the bid] remains open to improvement: the strength of our funding plan.” Nagle stated that costs, including fees and plan costs, would rise by $150 Million, years after stadium investors formed in 2014. Strengthening the plan required the addition of a “New Major Investor” as well as more partners. Enter billionaire, Ron Burkle. Earlier this year, Burkle announced the purchase of controlling interest in Republic FC. He also announced a stadium site, which would be located between 8th and 10th streets and adjacent land.
For his part, Councilmember Jeff Harris, whose district is slated for the stadium project, praised the terms.
Because the project includes acreage that could be developed around the stadium, there would be widespread impact for nearby residents and businesses. Also, with high and fast-rising rents, a homelessness crisis, and strained city finances, the project is not without some controversy.
However, recently, action by City of Sacramento officials, coupled with private sector investors and land developers, pointed at increased intensity for the project. Just a few weeks ago, Sacramento advanced a preliminary term sheet, with official bids submitted by the City shortly thereafter. As part of the terms, Sacramento would allocate $33 Million in fee waivers, cost reductions, and tax refunds and rebates to the overall $252 Million project. According to City officials, Sacramento’s contribution would focus on developing infrastructure in and around the development area. The development plans include areas in and around the Sacramento Railyards and also areas north of the River District. By some accounts, the stadium project represents long overdue development to downtown Sacramento’s eastern region.
In early April, Sacramento City Council adopted a resolution approving the term sheet for the stadium project on a 7 – 0 vote. The sheet from the staff report spelled out “key terms, process, and framework by which the parties agree to negotiate.” The key terms summarized include:
- Stadium Development
- A Non-Relocation Agreement
- An Enhanced Infrastructure Financing District (EIFD)
- Reimbursement of Municipal Services
- A Digital Signage Plan
- A Team Training Complex and Youth Academy
- Community Benefit Programs
- Public Sector Tickets
The same staff report estimated the creation of ” between 1,310 and 2,639 jobs.” In addition, the City estimated $214 million in local economic output over the life of the construction period. According to plans, the actual stadium site sits on 14 acres. However, private investors expect to purchase an additional 17 acres of land to be commercially developed around the stadium. City officials say, when pooled together, stadium and so-called “ancillary” development could reap over $1B in capital investments.
Coinciding with recent City action on the new MLS stadium is the advancement of the Old Sacramento Waterfront development project. Another large scale, multi-million dollar investment into Sacramento’s downtown.
Movement on the development of what some City officials call the largest infill site in the nation also followed reports that President Trump and lawmakers recently agreed on a $2 Trillion national infrastructure plan. No telling yet whether or not those funds could make their way to the Sacramento region.
Furthermore, during the April 9th Council meeting, members expressed a desire to see strong local hiring and business involvement. When pressed on the matter, City officials said any hiring goals would be determined by the general contractor assigned to the project. Local hiring and business involvement came under a microscope as the city continues to grapple with growth and how it could provide benefits for African-American and other disadvantaged communities. More information on these efforts can be found under Community Benefits within the summary of the terms.
The Waiting Process
John Dangberg, Special Economic Development Advisor to the City Manager was one of the presenters of some of the key terms at the April Council meeting. The council submitted the terms to MLS for review. ‘That’s a unanimous vote. Send!” said Steinberg over cheers from the uniformly supportive attendees, as measured by public comments.
A decision by MLS is expected this summer. Also vying to be the next MLS franchise is St. Louis.
To note, the terms don’t go into effect unless Sacramento is selected for the new MLS franchise.