This is what the new Sacramento Republic FC stadium will look like at downtown railyard
Major League Soccer may finally choose Sacramento as its next site for expansion, perhaps within days.
The MLS Board of Governors meets Thursday in Los Angeles to discuss expansion, among other topics, and Sacramento has never been more ready to finally get the nod from America’s premier soccer league.
Sacramento has a billionaire owner at the ready in Southern California supermarket magnate, Ron Burkle. Sacramento has a stadium site ready to develop at the old downtown railyards. Sacramento has the full backing of the city, including a city-approved series of rebates and fee waivers valued at $33 million.
Those incentives were offered to Burkle’s group to increase the chances of building a stadium that would act as a catalyst for other development on a piece of land that has sat like a big, ugly swatch of dirt adjacent to Sacramento’s downtown for generations.
Why is this good for Sacramento? Because it signifies that a far-away future of activity, commerce, housing and development on a 244-acre site – one of the biggest urban landfill projects in America – may finally be at hand after decades of talking about it.
Sacramento stands to get a privately-financed development deal in exchange for cutting red tape for its developer partners. It will get a $252-million facility to house Sacramento Republic FC without sacrificing a dime from the city’s general fund. It will be in partnership with Burkle, who has made a fortune buying undervalued assets and developing them into moneymakers.
Oh, and Sacramento would get another amenity – an MLS team – for a city and a region that needs amenities as it continues growing and attracting new residents and investment from the Bay Area and beyond.
Sacramento has no downsides here, unless you count the occasional questions about the long-term viability of MLS itself.
The soccer league cannot be mentioned in the same breath as the NFL, NBA, or MLB. The league is barely more than 20 years old. When the NBA and NFL were 20 years old, they were strictly second-tier leagues. As recently as the early 1980s, NBA championship games were shown late at night on tape delay due to minimal interest.
Does that mean that MLS will one day rival America’s top sports leagues? Here is the answer: It doesn’t have to.
MLS’ national TV deal is only $90 million compared to $255 million for the NFL. But MLS has strictly contained its operating costs. It has built a self-sustaining model in which local owners build their own facilities and make money on the team and through ancillary development deals tied to the team. Fortune Magazine reported in 2017 that the average MLS team is worth $233 million, a 20 percent increase from 2016.
Burkle probably is not buying into Sacramento just to own a soccer team. He’s buying into Sacramento as a businessman because of the promise of the city and the future of that 244-acre site.
Why does that matter to Sacramento?
Because the development of a soccer stadium and the railyards would be a continuation of the momentum Sacramento has enjoyed since helping finance the Golden 1 Center downtown.
In that deal, the city monetized its parking assets to float a $255-million bond to help finance its new arena.
In the case of the soccer stadium, as Tony Bizjak of the Bee recently reported, the city would: “Offer the team roughly $5.4 million worth of development fee waivers and tax rebates, and would set up a special infrastructure financing district on site to capture tax revenue to pay for up to an estimated $27.2 million in infrastructure around the stadium.”
Did you catch that? The city is offering fee waivers and rebates. The city is offering to set up a financing district to pay for the infrastructure around the stadium. That’s very similar to what San Francisco did to help secure what is now known as Oracle Park, home of the San Francisco Giants.
The owners of the sports team – in this case, Burkle’s group – would pay for the stadium. The city would help finance the infrastructure around the stadium. The city gets something valuable for its relatively modest investment and encourages more development.
When he was on the Sacramento City Council, Kevin McCarty was a huge critic of the city’s deal to build Golden 1 Center. But now, as state Assemblyman, he is a big fan of the soccer stadium deal. “This is a very fair proposal,” McCarty said recently to The Bee. “This is a much easier pill to swallow for the critics.”
But, it wouldn’t be Sacramento if it didn’t have critics and, lately, social media has been full of chatter about why Sacramento should divert $33 million to help the struggling Sacramento City Unified School District instead.
The answer: Federal and state money funds schools. Cities don’t fund schools. Moreover – and details are important – the city isn’t handing Burkle a $33-million check out of the general fund. The city is waiving fees and capturing tax dollars to pay for infrastructure for a project that will benefit the city.
Even as a minor league soccer team, Sacramento Republic FC has tapped into a wellspring of community spirit. Republic games are alive with rabid fan groups, rock bands, locally-made craft beer in an environment that is very family friendly. That all happens in a temporary stadium erected on the grounds of Cal Expo.
Imagine it in a 22,000 seat stadium at the railyards. Imagine fans massing downtown and marching – as one republic, one community – to the stadium. Imagine a new outdoor concert venue when the team isn’t playing. Imagine life and development in a once dead spot along Interstate 5.
This all started as the brainchild of entrepreneur Warren Smith. It was pushed forward through the investment and dedication of investor and philanthropist, Kevin Nagle. Sacramento Mayor Darrell Steinberg helped forge a deal between Smith and Nagle and then helped attract Burkle. Through years of hard work, local developers Larry and Denton Kelly have pushed the railyards to be where development could finally happen.
And many other locally-based men and women have invested money and countless hours to create a special fan experience and business opportunity for Sacramento.
A big win for Sacramento is ready to happen after more than five years of trying. MLS just has to say, “yes.”