Orlando’s MLS stadium deal not as taxpayer-friendly as reported, still better than a poke in the eye

Elliott Turner, aka Twitter’s @futfanatico, also had a piece in Vice Sports on Friday, this one a long analysis of Orlando City S.C.‘s stadium deal, which I’d previously praised as a rare moment when “a professional sports franchise is actually agreeing to pay to build its new stadium, and pay (something) for the land to build it on, and pay property taxes on the stadium once it’s complete,” though the next day I had to unpraise it when it turned out the team was still expecting the city to use its eminent domain powers to force private owners to turn over part of the stadium land. Turner has even more problems with the deal, though, calling it “a new way to milk taxpayers”:

  • The team will now operate the stadium, not the city, meaning it will cover operating expenses but also won’t share revenues.
  • The team’s non-relocation clause has been cut from 15 to ten years, and it will no longer pay a $20 million fine if it moves before then.
  • The city is still on the hook for sewer and infrastructure upgrades that could amount to $16 million, which will wipe out the $9 million profit the city will turn on the land it bought and re-sold to Orlando City S.C.
  • Under the previous deal, the club was going to pay $675,000 in annual rent; by owning the stadium itself it won’t pay rent but will pay property taxes, but those will likely amount to less than the rent would have.
  • Under the new contract, Orlando City S.C. can deduct future construction cost overruns from the $18 million purchase price it’s paying the city for stadium land.

So how bad is all this? Not real bad, honestly: Operating costs can easily outstrip any revenues. The non-relocation clause is likely a non-issue if the team owns the stadium and would be saddled with it if it moved. Sewer costs are a standard city expense that property taxes are supposed to help cover. And most importantly, that “rent” wasn’t going to pay back the city and county’s $40 million in construction costs under the old deal, but toward paying back a $10 million loan that the city was going to provide toward the team’s share.

The most salient item uncovered by Turner is that the $18 million land purchase price may get eaten up by cost overruns, which is a real concern. But even then, getting a lousy price on land sales is a perfectly cromulent tradeoff for getting out from under $40 million in taxpayer cash obligations. The Orlando City soccer deal may not be the stadium utopia we had hoped for, but it’s at least close, and much closer than the original deal that the team owners originally proposed. I may not be quite shocked and awed by it, but if all stadium deals looked like this one, the world would be a significantly better place.

 


3 comments on “Orlando’s MLS stadium deal not as taxpayer-friendly as reported, still better than a poke in the eye

  1. I’d had a premonition that the “private financing” bit was a little too good to be true tho, especially given that the owners spent years begging for state and city/county tax dollars.

    But when the local baseline for stadium funding dickery is handing some $400M in free money to the deVos family, any deal (including this one) by comparison seems like a mere bucket of cold water to the face.

  2. Also: it’s incredibly telling that no media outlet in the Central Florida area had bothered to follow up on the new funding scheme for the stadium. I’d have assumed that a simple public records request would have dug up the deets on it much earlier, but alas.

    We do see some Sentinel trucks adorned with OCSC logos, and even the alt-weekly here has OCSC-related adverts in their print editions…

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