Charlotte won’t get county money for MLS stadium, expansion race now bigger mess than ever

The Mecklenburg County commission voted 5-3 on Wednesday to hand over the site of 83-year-old Memorial Stadium to the city of Charlotte for a new soccer stadium for a potential MLS team — but no money for building it, which is what the ownership group had been hoping for. Commissioners said they wanted to see a soccer stadium built, but, you know, by the city, not them:

“They manage stadiums and they have a division in the city that deals with pro sports teams,” [Commissioner Jim] Puckett said. “They have a dedicated tax revenue stream that’s for entertainment and can be used for pro sports. They have the expertise and funding stream to deal with that.”

The team’s original plan was for a $175 million stadium where $101.25 million of the costs would be paid off by the county, with the team repaying the public via $4.25 million a year in rent payments. (Note to readers who can do math: No, $4.25 million a year is not enough to repay $101.25 million in bonds unless you get a 1.5% interest rate, which I know they’re low but get serious.) Now they’ll instead have to try to hit up the city of Charlotte alone, which has already indicated that its maximum contribution is $30 million.

That would leave the team to shoulder $145 million of the cost, plus MLS’s nutso $150 million expansion fee, which is a hefty chunk of change. On the other hand, the team wouldn’t have to make those rent payments, so maybe it could just go to a bank and borrow the cash, and make mortgage payments instead? Or maybe the rich NASCAR track heir who wants to launch the MLS team would rather have somebody else on the hook for loan payments if his team, or MLS as a whole, went belly-up at some point as a result of its pyramid-scam spree of handing out expansion franchises like candy to anyone who wants to pay $150 million for candy? Yeah, probably that.

If you’re keeping score, the MLS expansion candidates are now:

That’s a whole mishmash of stuff indeed, and I don’t envy the job of the MLS officials tasked with having to pick two winners this fall (and two more next fall, because they can’t cash those $150 million expansion-fee checks fast enough). You have to wonder if commissioner Don Garber doesn’t think to himself sometimes, maybe it’d be easier just to stick the expansion franchises on eBay and take the highest bids. It would mean giving up on the pretense that they’re actually selecting the best soccer cities or something, but get real, nobody believes that anyway.

Phoenix Rising co-owner vows MLS stadium will get no subsidies, other than “normal” ones

Since writing my post noting that Phoenix Rising hasn’t provided funding plans for its proposed MLS stadium yet, I’ve had an email back-and-forth with team co-owner David Rappaport. And he’s provided a bit more detail on his ownership group’s “no public subsidies” pledge:

Phoenix Rising FC is partnering with the Salt River Pima-Maricopa Indian Community and the Solanna Group, which is a real estate company owned by members of the Salt River Pima-Maricopa Indian Community, to construct a new, soccer-specific MLS stadium. No tax breaks or funding from the state of Arizona or federal government will be provided that are not normally offered to real estate projects in Native American communities. Stadium construction costs will be repaid from revenues generated by ticket, merchandise, food and beverage and sponsorship sales.

That’s a lot more specific, and helps rule out such things as tax-increment financing or other public kickbacks, which is definitely reassuring.

The question then is what that “not normally offered to real estate projects in Native American communities” clause means. Salt River is the same site that was considered and rejected for an Arizona Coyotes arena last year, so we have at least a little background on what kind of tax advantages a venue on Native American land would receive. The Salt River reservation has the same sales tax rate as Scottsdale (7.95%, marginally lower than Phoenix), but it promises other unspecific tax benefits. One of these could be a property-tax exemption for land owned by the reservation (same as for land owned by other governmental entities); if Salt River continues to own the property (or even just “has control over” it, which is considered the same thing by Arizona law), this could save Phoenix Rising a few bucks.

There’s also this:

The income of a corporation owned by an Indian tribe or tribal member is not subject to Arizona’s corporate income tax if its income is derived from businesses located on the reservation. Income from a corporation not owned by a tribe or tribal member, regardless of whether it is located on a reservation, is subject to the state corporate income tax. Corporations owned by tribes or tribal members that derive their income from non-reservation sources are subject to the income tax in the same manner as all other corporations with income in Arizona.

Again, if the ownership is structured right between Phoenix Rising, Solanna, and the reservation, there could be some tax benefits here, though it’s tough to say how significant they’d be without knowing more details.

Anyway, this is all reassuring, though I’ll still be eagerly awaiting a fleshed-out stadium funding plan. A typical MLS team brings in maybe $30 million in annual revenue, out of which it has to pay player payrolls (generally less than $10 million), plus other expenses; adding on $10-15 million a year in debt payments (if we’re talking about a $200 million stadium) would take a hefty chunk out of their ledgers. It’d help if they can keep costs down, but given they’re talking about a “climate-controlled” venue … I’m interested to see how it all pencils out, let’s just put it that way.

Phoenix Rising plans MLS stadium, let’s not worry about cost or how it’ll be paid for

In the mood to read an entire article about a new stadium plan that never discusses how much it will cost or who will pay for it? Then Soccer Stadium Digest has you covered!

Phoenix Rising FC, once considered a dark horse in this race, is one of the only candidates facing none of the obstacles to stadium development that hampers other markets…

[blah blah blah]

Situated at the intersection of major Valley arterials Loop 101 and Loop 202, the complex is an easy drive from…

[blah blah blah]

In May, the club secured financing with Goldman Sachs, which recently structured both Banc of California Stadium in Los Angeles and Audi Field in Washington, DC.

[etc]

Okay, yes, Phoenix Rising FC has partnered with Goldman Sachs as “structuring agent” for its stadium plan, but that just means they’ll be the bank that they borrow stadium funds from. How much will a 25,000-seat stadium cost? Dunno. Who’ll pay for it? Team execs have previously said it won’t require “public funds,” but as we all know, there are lots of means of getting taxpayer subsidies that can be counted as not public funds. (Tax kickbacks, for starters.)

It’s entirely possible that Phoenix Rising is set to build a new stadium on its own — as Orlando City SC (mostly) did — in which case it’d be worth applauding. (As much as one should applaud a private business for doing what private businesses should do without trying to fob costs off onto the public.) But it appears that the USL club’s owners aren’t being very forthcoming about their cost or funding plans beyond “don’t worry about it,” and the Phoenix-area and soccer media isn’t pressing them on it, which, c’mon guys. It’s fine to be excited about a possible new MLS team, but try to remember to do your jobs while you’re at it.