Sacramento OKs $27 million soccer loan. Mayor says talks are on to land women’s team

A unanimous Sacramento City Council on Tuesday voted approval of a $27.2 million loan to the city’s private Major League Soccer investment group to help it build infrastructure around the group’s planned downtown soccer stadium.

The money will go toward building roads, water lines, sewer lines and a light-rail station on land adjacent to the stadium, which will be built just east of Seventh Street in The Railyard redevelopment area. The private soccer group will pay the loan back with interest from its own pocket or, if it moves quickly enough to build ancillary development around the stadium, it will be allowed to substitute new property tax revenue from the site for part of the loan repayments.

The group won the rights last month to operate an MLS team, which would begin play in 2022, making Sacramento the 29th franchise in the league. The Sacramento Republic FC team currently plays in a lower-tier United Soccer League. Soccer team President Ben Gumpert said the team plans to break ground in spring on the $300 million-plus stadium. The stadium will be privately financed.

Mayor Darrell Steinberg, who brokered the city loan with soccer investors, said he hopes that arrangement will encourage the Republic FC group to move quickly on developing the land around the stadium, helping further kick-start redevelopment of the largely empty Railyard.

Steinberg also said Tuesday he has joined with Republic FC officials in their efforts to land a National Women’s Soccer League team as well to play in the stadium.

“Our city has another once-in-a-lifetime opportunity,” he said. “Let’s bring women’s professional soccer to Sacramento.”

The loan details have not yet been worked out. City staff told the council they plan to sit down with the soccer group and bring loan terms back to the council for a vote early next year, including repayment schedules and collateral.

The loan will come from a city “risk” fund. Staff member John Dangberg, who helped put the deal together, said money in the risk fund is typically invested in some interest-producing instrument. In that sense, the loan with its interest repayment could be considered a similar use to that of other monies in the risk fund.

The city also has set up an infrastructure financing district on the 31 acres that the soccer group, headed by Los Angeles businessmen Ron Burkle and Matt Alvarez, is purchasing for the stadium and for surrounding development.

If the cost of building infrastructure on the site exceeds $27.2 million, the soccer group will pay to build it, but will be able to use future new property tax revenues in that financing district as reimbursement, according to a city analysis.

Beyond that, future property tax revenue from the site would go into city coffers, officials said.

The $27.2 million loan is the main part of an overall $33 million incentive package the city is offering, the other parts of which the council agreed to earlier this year.

Besides the loan, the incentive package 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.

Gumpert said the investor group does not yet have a plan for what kind of development it will create in the area around the stadium. Speaking to The Sacramento Bee last month, lead investor Burkle said the goal will be to create a district that enhances fan experience outside the stadium before and after matches.

In a statement issued Tuesday afternoon, the team said, “The 20,000-plus seat venue and adjacent entertainment district will be active beyond game days for fans and visitors year-round. The stadium will host MLS matches, Men’s and Women’s National team games, friendlies, concerts, festivals and other sporting, family and civic events.”

Speaking after the Tuesday vote, Gumpert said negotiations to land a women’s soccer team have been ongoing for several months, but he declined to offer any details.

“We want the stadium to be everything that it should be and that includes women’s soccer, rugby, football, concerts, farmers markets, festivals,” he said. “There is so much we can offer. And professional women’s soccer is toward the top of that list.”