Politics & Government

Should Charlotte pay $100 million for soccer stadium? Other cities spent far less.

Under a proposal discussed last week by Mecklenburg Commissioners, Memorial Stadium and the Grady Cole Center would be demolished to make room for a new 20,000-seat stadium for a possible Major League Soccer team.
Under a proposal discussed last week by Mecklenburg Commissioners, Memorial Stadium and the Grady Cole Center would be demolished to make room for a new 20,000-seat stadium for a possible Major League Soccer team. jsiner@charlotteobserver.com

When the Minnesota United, one of Major League Soccer’s expansion teams, reached a deal to build a new stadium in St. Paul, the team agreed to pick up much of the tab.

Under an agreement approved in March, the soccer team will cover the cost for the $150 million stadium itself.

In return, the city voted to spend $18.4 million for improvements around the stadium, including sidewalks, lights, parking and landscaping.

Charlotte’s first proposal for an MLS team would require taxpayers to give much more money.

A proposal presented to Mecklenburg County commissioners in closed session last week calls for the city and county to each spend $50 million toward a $150 million stadium in Elizabeth just outside of uptown. The local ownership group of Bruton Smith, the billionaire race track owner, and his son Marcus, CEO of Speedway Motorsports, would spend $50 million for the stadium.

The county would also demolish Memorial Stadium and the Grady Cole Center to make room for the stadium, and the county would provide the land, assessed at $12.9 million.

The county would own the stadium, but the Smiths would manage it. That agreement is similar to the city’s deal with the Charlotte Hornets. The team manages the city-owned and funded Spectrum Center.

Charlotte’s early proposal – which has not been discussed publicly – would require taxpayers to spend more than has been spent to benefit other recent MLS franchises, including teams in Los Angeles, Miami and Orlando.

Marc Ganis, president of a Chicago-based sports consulting firm, said Charlotte’s early proposal to have the public pay for two-thirds of the cost of a stadium is high by MLS standards. That’s more of a ratio usually seen for NFL, NBA and Major League Baseball stadiums.

“The proportion of (public money) in Charlotte is higher than it sometimes is with other soccer stadiums,” he said.

When the MLS was founded more than 20 years ago, most teams played in large stadiums built for football. Though some teams still play in football stadiums, the trend has been toward building smaller, more intimate stadiums that seat between 20,000 and 30,000.

When commissioners discussed the proposal last week, the county’s presentation included information on the projected economic impact of the proposed Elizabeth stadium, and the projected impact of other MLS stadiums.

It did not include detailed information on how much public money was pledged to build other MLS stadiums, according to two people familiar with the discussion.

Here is how recent MLS cities and cities vying for teams have funded their stadiums:

▪ Orlando City began playing in MLS in 2015. The team’s original deal with local and state governments was to build a $115 million stadium with roughly $65 million in public money from the city, county and state, according to the Orlando Sentinel.

But due to the high fan interest in the team, the ownership group is now building a larger stadium – without public money.

▪ New York City received a second team in the same year as Orlando. The team currently plays in Yankee Stadium, and is trying to build a soccer-specific stadium somewhere in the region. There are no details on how the new stadium might be financed.

▪ In Miami, soccer star David Beckham recently bought most of a 9-acre site for a $150 million stadium that his ownership group is planning to finance on its own. Beckham also said he plans to pay the property taxes on the stadium.

MLS has said it will award a new team to Miami if Beckham can build a stadium.

▪ MLS has awarded a new franchise to Los Angeles for the 2018 season. The team will play in a new 22,000-seat stadium that costs $350 million.

The ownership group, which includes former basketball player Magic Johnson, will finance Banc of California Stadium.

▪ Atlanta’s new team will play in Mercedes-Benz Stadium, a $1 billion stadium that’s being built primarily for the Atlanta Falcons football team. The public is spending $200 million on the stadium while the Falcons are paying for the rest.

▪ St. Louis is one of roughly 10 cities, including Charlotte, that’s hoping for an expansion team. It has been considered one of the strongest contenders.

The team was seeking $80 million in public money, along with state tax credits, toward a $150 million stadium.

That stadium is one of the most similar to Charlotte’s proposal. But it appears an effort to put the funding proposal on a ballot this spring has failed, according to the St. Louis Post Dispatch.

▪ In Sacramento, another city competing with Charlotte for a team, the local ownership group plans to pay for the $180 million stadium on its own. The city is planning to spend $46 million on infrastructure near the stadium, though some of that spending was approved before the stadium was announced.

The city and county, and the Smiths, are not commenting on Charlotte’s stadium proposal.

“Currently, we are in a competitive environment with many other destinations, so we will refrain from publicly discussing details and releasing records while in active negotiation,” the city said in a joint statement with the county and the Charlotte Regional Visitors Authority.

The proposal for an MLS stadium in Elizabeth would fall inbetween the public-private investments the city and county have made for other Charlotte stadiums.

To build BB&T Ballpark for the Charlotte Knights, the city and county each spent $8 million toward the cost of the $55 million stadium.

When the Carolina Panthers built Bank of America Stadium more than 20 years ago, the team constructed the stadium on its own. (The city donated the land and made infrastructure improvements.)

The Charlotte Hornets have the most generous stadium/arena deal. The city built Spectrum Center on its own, and the Hornets manage the building for the city. Both the team and the city pay to maintain the building.

If the proposal moves forward, city and county leaders may argue that the value of MLS franchises is increasing, and that Charlotte must spend more tax dollars to land a team.

Soccer icon David Beckham officially announces plans to bring an MLS team to Miami on Feb. 5, 2014.

Steve Harrison: 704-358-5160, @Sharrison_Obs