Sacramento council approves MLS stadium term sheet, owner swears he can pay for it himself

The Sacramento city council last night unanimously approved Republic F.C.‘s stadium term sheet, which proposes building a new $180 million MLS stadium almost entirely with private money, once MLS deigns to give Sacramento a franchise.

Republic owner Kevin Nagle says he and his investment partners can pay for two-thirds of the $180 million construction budget with “equity” (I assume he means cash, unless he’s really going to give the stadium contractors shares in the team) and borrow the rest. Add in an expected $100 million expansion fee, and that’s $280 million Nagle and his partners will need to earn back before turning any kind of profit — so figure close to $20 million a year in revenues needed in order to make this a reasonable investment. How does that compare to other MLS franchises?

Team

Value ($M) Revenue ($M) Operating Income ($M)1
Seattle Sounders 245 50 10
LA Galaxy 240 44 4
Houston Dynamo 200 26 5
Portland Timbers 185 35 4
Toronto FC 175 32 -7
Sporting Kansas City 165 29 4
Chicago Fire 160 21 -6
New England Revolution 158 25 7
FC Dallas 148 25 -3
San Jose Earthquakes 146 13 -1
Philadelphia Union 145 25 2
New York Red Bulls 144 22 -9
D.C. United 140 21 -1
Montreal Impact 128 22 -3
Vancouver Whitecaps 125 21 -6
Columbus Crew 112 18 -4
Real Salt Lake 108 17 1
Colorado Rapids 105 15 -3
FORBES estimates; revenue and operating income is for 2014 season
1
Earnings before interest, taxes, depreciation and amortization

Yeah, I have no idea how this is going to work out either, unless it’s a roll of the dice on MLS franchises making a whole lot more money in the future. Or rich people just think it’s fun to own soccer teams. Which, sure, so long as they’re spending their own money, it’s no skin off taxpayers’ noses.

Meanwhile, here are pretty pictures to look at. It sure does look fun, no? I don’t know about $280 million worth of fun, but then, I have no way of knowing what $280 million worth of fun looks like, so maybe I’m not the one to judge.

Sac stadium

Sacramento MLS stadium plan: Let us use city-improved rail yards land, we’ll pay for the rest

The Sacramento city council is set to vote today on a term sheet for a new Republic F.C. soccer stadium, which means that unlike all the past times Mayor “I Don’t Recall Being 100% Naked” talked about it, we have some actual numbers to evaluate. So let’s sit down with the term sheet, and begin.

First off, a term sheet is not a contract, or even a memorandum of understanding: It’s basically a sketch of how the financing and operations of a stadium will be worked out. So if the council approves it today, there will still be loads of details TBD.

That said, there’s a lot spelled out in the term sheet that rules out some of the more common hidden subsidies in these kinds of deals: The team owners would pay the entire $180 million construction cost, plus overruns, and would pay operating and maintenance costs. The team is even promising to pay property taxes, which as we’ve seen elsewhere isn’t always the case.

In exchange, Sacramento would turn over a chunk of land on the old railyards site that has received $46 million worth of infrastructure improvements to turn it into developable property. (This money has already been allocated, anyway; whether it’s all been spent is frustratingly vague in both the term sheet and the news articles about it, and Google Maps isn’t much help.) That’s not nothing — it’s land that could be used for something else otherwise — but since this is private land that’s gotten the public investment, the only taxpayer cost would be the money that the city has already committed to shelling out regardless of whether a stadium is built.

So, tentative thumbs-up for a plan that minimizes public costs! There are still many steps to go before this is set in stone, obviously, but if this goes ahead as written in the term sheet, it’d be a better deal for the public than pretty much any other MLS stadium deal outside of the one that the crazy rich guy is building in Orlando. Friends, they’ll call it a movement.

KJ commissions Sacramento soccer stadium report, shockingly gets answer he wants

Think Big Sacramento, the private nonprofit set up to push for new sports facilities by Mayor Kevin Johnson as part of his secret city government, has commissioned a report from consultants Capital Public Finance Group on the economic impact of a new Sacramento Republic FC soccer stadium, and come on, what do you think it said?

A new soccer stadium could generate $1.25 billion of economic impact over 30 years, according to the study commissioned by Think Big Sacramento.

We’ve been over the problems with using “economic impact” as a metric before (short answer: just because money is changing hands in your city limits doesn’t mean anyone in your city is benefiting), as well as the problems of hiring these consultants who just plug some numbers into a formula without trying to account for money that’s cannibalized from other local entertainment spending, or for economic losses from any public money that’s dedicated to the project instead of to other local needs. CPFG looks to be a local Sacramento group, so doesn’t have much of a track record, good or ill, in such matters, and it shows in the report, which is all of 19 pages long, 14 of which are taken up with overviews of Major League Soccer (attendance is up!) and the proposed downtown Sacramento site (“at the threshold of a new era”!). There’s no source given for any of CPFG’s numbers, and they don’t appear even to account for the fact that some people are already going to see Republic FC games, so counting the money those fans spend at a new stadium would be double-counting, and —

Sorry, this is way more attention than a quickly thrown-together PDF deserves, even if the Sacramento Bee thinks otherwise. Suffice to say that KJ bought himself some 19-page campaign brochures for his plan to get a new soccer stadium next to the Kings‘ new basketball arena. Wake me when somebody’s finalized how to pay for it. I know the Republic owners are saying “privately financed,” but we’ve heard that before.

Kevin Johnson set up secret government, asked Kings, Republic for donations during arena and stadium push

If you regularly read this site’s coverage of the Sacramento Kings arena saga, you may have the impression that Sacramento mayor (and former NBA great) Kevin Johnson will stop at nothing to get what he wants, whether it’s assembling his own prospective team ownership groups or coming up with bizarro-named astroturf organizations. But now, according to a long exposé in Deadspin, it appears his ruthlessness is way, way more extensive than anyone ever realized. Among the lowlights:

  • Johnson tried to take over the National Conference of Black Mayors to use it for his own ends, then when that failed, ran it into bankruptcy and set up his own competing black mayors’ group.
  • When the Sacramento News & Review issued a public records request over the black mayors’ group scandal, Johnson sued the newspaper and his own city to block the release of emails from his office. That case is still pending.
  • In the latest twist, KJ took advocates for charter schools (the crusade he shares with his wife, “Waiting for Superman” antihero Michelle Rhee) and gave them fake City Hall titles so they could work on his behalf during the black mayors putsch.
  • On the sports venue front, Johnson solicited campaign donations from the owners of both the Kings and Republic F.C. while seeking to build a new basketball arena and new soccer stadium for those teams.

Oh yeah, and then there’s the bit about Johnson being accused of sexually molesting multiple teenagers back in the ’90s, which is old news but worth remembering both because there shouldn’t be a statute of limitations on remembering stuff like this, and because it involved amazing secret recordings like this one:

Girl: “Well, I was naked and you were naked, and it wasn’t a hug.”

K.J.: “Well, I felt that it was, you know, a hug, and you know, I didn’t, to be honest, remember if we were both naked at that time. That is the night at the guesthouse?”

Girl: “Yeah. … Why would I be upset if it was just a hug?”

K.J.: “Well, I said the hug was more intimate than it should have been. But I don’t believe I touched your private parts in those areas. And you did feel bad the next day and that’s why we talked about it.”

Girl: “Well, if it was just a hug, why were either one of us naked?”

K.J.: “Again, I didn’t recall us being a hundred percent naked.”

Deadspin illustrated its latest piece with an image of KJ with devil horns drawn on. The site is known for being a bit over the top, obviously, but in this case, it seems like they’ve got it just about right.

Every city in the U.S. still thinks it can get an MLS franchise, and you know what that means

Sacramento Republic FC has chosen a designer for a new soccer stadium if it makes it to MLS (not that it doesn’t already have design renderings — hope you know how to design magical purple glowing radio towers, HNTB!), and the mayor of San Antonio is looking to help bring an MLS team to an expanded stadium in her city even as the local NASL owner is selling his franchise, and some developers in Las Vegas want to convert the 51’s minor-league baseball stadium for an MLS team, and…

…you know what? I’m going to go watch some baseball at the place with the free tickets. If there’s any important stadium news the rest of this week I’ll check in. If it’s just more MLS expansion teams, it can wait till next week.

Meanwhile, enjoy your vaportecture porn:

RepublicStadium2

Sacramento soccer team announces 20,000-seat stadium plan, says money will come from somewhere

Sacramento’s two-year-old USL Pro minor-league soccer franchise, Republic FC, announced plans yesterday to build a 20,000-seat stadium in the city’s downtown railyard if it’s admitted to MLS. And how would it be paid for?

Questions remain over how the stadium will be financed. Mayor Kevin Johnson has said no city money will be used to help build the facility. Nagle has said the Republic FC investor group will have the capacity to pay for the stadium, plus a league expansion fee of at least $70 million.

Sure, maybe? Larry Kelley, the developer who is planning to build a mixed-use district on the old railyard site, would be part of the Republic FC investment team, so it’s always possible he’d give them a break on the land as a kind of loss leader. Or “no city money to help build the facility” could really mean “city money, but only to help buy the land or provide tax breaks.” Nobody’s saying yet, but hey, pretty pictures!

Read more here: http://www.sacbee.com/2014/09/17/6715747/sacramento-republic-fc-releases.html#storylink=cpy