Lease clause could let Philadelphia Union threaten to move, make Chester stadium deal more awful than it is already

The Delaware County Daily Times ran a long article yesterday on the impact of the Philadelphia Union‘s taxpayer-funded stadium on the city of Chester, which begins like this:

As you approach Talen Energy Stadium, past the pristine views clear across the Delaware River, the scent hits you first, the mingling of roast coffee beans and grilled burgers from storefront vents. Above them rises four stories of apartments, accented by red brick and wrought iron balconies. The patio for dining and resident recreation hums with life, as boats idle near the pier and oblige excited children with honking horns.

It’s a great, evocative opening — and it’s all misdirection, because it doesn’t exist. This, it turns out, is just the image that was painted by the team’s owners in order to get $87 million in public money for its stadium project. Now, writes the Delco Times,”it reads like a fever dream, where the imaginary deluge of funds — was it a $400 million or $500 million renaissance? — seemed to jump weekly.”

That Chester is a cautionary tale against believing “if you build it, they will come” rhetoric (and yet another reason to hate Jerry Blevins’ least-favorite movie) isn’t anything new — the Philadelphia Inquirer wrote about this four years ago, and Bloomberg News two years before that. But what is new, to me anyway, in this article is the news that Chester’s terrible stadium deal includes a terrible lease clause that allows the Union to threaten to leave town starting this year by paying just a $10 million exit clause:

If after 10 years, the Union’s attendance lags in the bottom 25 percent of MLS for two consecutive years (which it has, the Union ranked 19th out of 22 teams last year), the club can choose to relocate, paying Delco a stipend of $10 million to exit the lease. In a climate where a prominent owner like Columbus Crew’s Anthony Precourt is strong-arming his way toward Austin, clubs have the leverage and precedent to leave, which would leave the stadium a white elephant even more marooned.

Union CFO Dave Debusschere (no, not that one, he’s dead) insists that the team has no intention of moving — which may well be true, but come on, people, you know that giving sports teams an exit clause is just handing them a gun and inviting them to rob you. This is probably not the most opportune time for the Union to demand stadium upgrades, what with the local paper reporting on how the stadium has been a disaster all around; but using exit clauses to pry loose publicly funded renovations is certainly a time-honored tradition, so you absolutely don’t want to leave the door open to it. It’s too late for Chester, but city lawyers writing future leases, bookmark this post, okay?


3 comments on “Lease clause could let Philadelphia Union threaten to move, make Chester stadium deal more awful than it is already

  1. For whatever reason people love bidding against themselves. Handing somebody a free arena isn’t enough–you need to make it easy for them to get out of the deal, as well. Same things happens in other avenues: Look at how often so-so coaches get extensions or CEOs of struggling companies get big raises. Nobody is going to hire away your under-performing coach/CEO but that doesn’t stop the people from panicking and throwing extra money at them to assure they’ll stay.

  2. Only politicians could be delusional to think that a soccer stadium of all things could help revitalize an area. Though I live under 30 minutes away i had never been by the stadium until recently. Visiting people in nearby homes who don’t even really have furniture in their home, and then seeing this stadium (and of course a nearby casino) – its just silly to look at.

  3. This was just never going to work… the supporters group went all in on social media to move the franchise/stadium forward, but it never looked like there was any broad support for an MLS franchise in Philadelphia.

    A decade on, sadly that has come true.

    On the plus side… where is the negative in letting a team leave that no-one goes to see and even fewer care about from a business perspective?

    The club is essentially a non paying tenant (IE: the amount they ‘contribute’ does not cover the operating costs associated with having them present). And non paying tenants have very little leverage in negotiations.

    Let them walk and leave the stadium locked up (assuming you can’t find alternate events that would actually generate some net revenue…). There is literally no down side to letting them exit the lease early.