In an attempt to show Major League Soccer that political and civic support exists for a new soccer stadium in Sacramento’s downtown railyard, Republic FC and city officials will bring a preliminary term sheet to the City Council next week outlining plans for a 25,000-seat stadium project costing $226 million.
The City Council is scheduled to vote on the agreement, released Wednesday, at its meeting on Tuesday. While the city is not being asked to provide new financial investment for the project, the agreement does provide a guideline for the city’s permitting process and stipulates that Republic FC would cover construction budget overruns, reimburse the city for security at stadium events and handle design and predevelopment costs.
The total project budget includes $180 million in private financing for construction of a stadium on 16 acres in the northeast section of the railyard, which has stood mostly vacant for years. The other $46 million comes from the “significant infrastructure investments” already spent by the city, state and federal governments at the railyard, including the ongoing construction of roads and utilities in the development.
Republic FC said it could open the stadium as early as March 2018. The stadium would not be built unless the minor-league team is granted an expansion spot in the country’s top professional league, Major League Soccer. If approved by the City Council next week, the term sheet would be submitted to MLS to help the league assess Sacramento’s viability as an expansion market.
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“It demonstrates that we have resolve as a community,” Republic FC managing partner Kevin Nagle said.
MLS has plans to expand to 24 teams – from its current 20 – by 2020. Atlanta is scheduled to join the league in 2017, and Los Angeles has been awarded a second team, but it likely won’t be ready to play until at least 2018.
Minnesota’s Twin Cities also have been awarded a team, and a stadium is scheduled to be completed in St. Paul by 2018.
The final spot would go to Miami. However, the Miami Herald reported Tuesday that a team ownership group led by international soccer star David Beckham was searching for a new stadium site because property owners living within a proposed stadium footprint appear reluctant to sell to the investor group. MLS has said it won’t go to Miami without a stadium deal in place.
MLS officials also have said they are considering expanding beyond the 24-team mark.
“We don’t wish any ill will on the other cities, but we’re going to be ready whether the others are or not,” Nagle said. “What we’re attempting to do is make it easy for MLS to bring Sacramento in, in the event that there’s any issues with the other cities.”
MLS spokesman Dan Courtemanche declined comment on the release of the term sheet.
Nagle said Republic FC representatives are planning to attend the MLS Cup championship match the weekend of Dec. 6 and that the team expects to meet with the MLS next month. Courtemanche said league officials are “evaluating our future expansion plans and expect to have more details in the coming months, likely after the first of the year.” He added that expansion will be discussed during the league’s annual owners meeting on Dec. 5.
The release of the term sheet is part of a months-long effort by Republic FC and Mayor Kevin Johnson to prove the city’s viability as an MLS market. That campaign has included hiring a stadium architect and program manager. Next week, the team plans to unveil updated architectural renderings of the stadium.
The mayor called the release of the term sheet “another major milestone in our efforts to bring Major League Soccer to Sacramento.”
Under the term sheet, the city “would agree to assign the appropriate planning, engineering, building, safety and other staff to enable the parties to achieve that (March 2018) timeline, and Republic FC would pay all standard entitlement, planning, permit and impact fees.” The term sheet also provides an outline for what eventually would become formal agreements between the city and team on the location, design, financing and operation of the stadium.
Although the city isn’t making a financial contribution to stadium construction, “there’s still an important role for the city to play to make sure things happen in a timely fashion,” Assistant City Manager John Dangberg said.
Developer Larry Kelley, a Republic FC minority owner, last month closed on an agreement to purchase the entire railyard site – now mainly dirt and historic railroad buildings – for $18.1 million. Public agencies have invested a total of $270 million on infrastructure in the railyard, including installation of bridges, roads and lighting. The $46 million credited to the stadium project was calculated as a portion of that overall budget based on the number of acres devoted to the stadium.
Republic FC would be responsible for predevelopment costs, construction cost overruns, stadium design, maintenance and operation. It also would reimburse the city for police and traffic control at stadium events. Besides arranging for 6,500 parking spaces, the team could build and operate parking facilities on nearby city-owned land if “suitable parcels are identified,” the term sheet says. The city and team would split the revenues 50-50 from those facilities.
Nagle expressed confidence that his investment team – which includes members of the San Francisco 49ers and Sacramento Kings ownership groups – can privately finance the soccer stadium. He said he has had discussions with “three or four” potential lenders to finance the project but said he expects to be able to pay for two-thirds of the budget with cash equity. He said additional investors in Republic FC may be added.
Nagle also said his group is in negotiations with potential sponsors for a naming-rights deal for the stadium.