Sacramento to get MLS team now that city tax kickbacks will help pay for rising MLS expansion fee

The Sacramento Bee is reporting that Sacramento Republic F.C. will finally be officially named the latest MLS expansion team on Monday, after five years of haggling. And the Bee also makes clear what it took to shake loose an expansion approval:

The City Council this year agreed to offer the soccer investment group a $33 million incentive package to help it seal the deal with MLS. That included setting up an infrastructure financing district that would use future increased property tax to reimburse the soccer development group for building an estimated $27 million worth of streets, sewers and other new infrastructure on land near the stadium. The deal also includes $2.4 million worth of building permit fee waivers and other tax rebates, and up to $3 million worth of traffic control and policing on city streets adjacent to the stadium during soccer matches.

The city also will rewrite its signage ordinance to give the team rights to install five digital billboards around town.

As discussed here last month, this is a better deal than many cities are getting for their new MLS stadiums; as also discussed, $33 million plus some free billboards isn’t nothing, and it does seem like the league held out on an announcement in order to get these concessions from the city. (And Sacramento Mayor Darrell Steinberg says he will ask the city council for additional concessions to “give the development group more financial flexibility,” as the Bee puts it, like loaning the money to team owner Ron Burkle and letting him “repay” it later with property tax payments on his other developments nearby.)

The most telling sentence in the whole article, though, may be this one:

The mayor said the proposed loan makes it easier for the Burkle group to finance its $200 million league expansion fee, as well as pay for increased construction costs. The league has bumped that fee up in recent years from $70 million to $150 million to the $200 million level this year.

So if we’re taking the mayor at his word, the city of Sacramento is having to chip in $33 million–plus from future tax receipts plus other goodies, because otherwise the local sports team’s billionaire owner wouldn’t be able to afford the $200 million expansion fee that the league set based on the notion that cities will help subsidize any new expansion teams. Maybe it’s time to consider switching MLS’s designation from “Ponzi scheme” to “extortion racket”?


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8 comments on “Sacramento to get MLS team now that city tax kickbacks will help pay for rising MLS expansion fee

  1. “So if we’re taking the mayor at his word …” Steinberg’s word means nothing and never has. I would not be surprised if a backroom deal exists to give even more money away. As you know, there is nothing else to spend money on: all homeless have gotten their luxury apartments, the streets are like driving on glass, the schools are producing only Rhodes scholars, the city parks could compete with Versailles and win …

  2. I travel all over the country for work, and the only place I have ever been mugged was walking along the river by the train museum in Sacramento the one time I was there.

  3. Sacramento doesn’t seem to have a Sonic Drive In within its borders.

    Do you think I get the city to pay franchise fees for me to open one? If they’re giving away all that money for a private soccer team…

  4. “Insanity: Doing the same thing over and over again, and expecting a different result.” ( Albert Einstein). Taking this to soccer, I have heard for decades, that soccer is “The next big thing” yet, it remains by and large, a sport where in this country, only the ladies are good and generate the public’s interest ( sort of like tennis, figure skating and gymnastics). Which is why I simply do not understand Municipalities spending millions on soccer stadiums when taxes are too high and ( or) scarce resources can be used in critical areas of need?

    1. Also something we’ve been hearing for decades: that Albert Einstein said that insanity quote, even though he didn’t.

    2. The situation for soccer in this country isn’t as dire as you are describing it. Yes, the women’s national team is successful on an international level, and the men’s national team is not. But MLS men’s soccer does generate crowds that are roughly equivalent to basketball and hockey. A city like Sacramento is not going to be getting a baseball team or an NFL team. So I can see why they would be excited about adding soccer to the mix.

      1. Actual MLS crowds (as opposed to reported) probably average a bit below NBA and NHL, plus of course there are less than half as many soccer games in a season as basketball and hockey. But sure, MLS seems to have comfortably established itself as just below the Big Four sports tier, well ahead of things like the WNBA and arena football.

        (Whether that, or for that matter and NBA or NHL franchise, is worth getting $33 million worth of excited over is another story.)

      2. “Sacramento” is not excited. Soccer fans and the mayor are excited. The rest of us want our tax dollars spent where we were promised it would be spent.

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