»» UPDATE to this story: Sacramento is officially a Major League Soccer city
A historic day for Sacramento soccer has arrived. Just in time.
Major League Soccer Commissioner Don Garber today is expected to announce Sacramento as the 29th franchise city in the nation’s premiere professional soccer league. The capital city has made it in under the gun after five years of trying to win an expansion franchise; MLS, which has been growing quickly over the past decade, is set to add just one more team, a 30th, then shut down its expansion for an indeterminate amount of years.
Earlier this year, Sacramento officials had hoped a group of private investors would work a deal with the league to become the 28th entrant. But negotiations remained slow, and St. Louis stepped up in August to grab the 28th spot. The Sacramento deal nevertheless came to fruition in recent weeks.
Mayor Darrell Steinberg, who helped facilitate the talks, will join Garber, the Sacramento soccer investor group, Republic FC officials and Gov. Gavin Newsom on stage for the 11:30 a.m. announcement at The Bank venue on J Street.
Several hundred people, including Republic fans, will attend what is expected to be a “standing room only” event in the former bank building that is now a food and beer hall.
“Today is a historic day for Sacramento,” Steinberg said in a text to The Sacramento Bee. “Sacramento is no longer just becoming the next great American city. We are.”
The new MLS team is expected to take over the banner of Sacramento’s existing Republic FC soccer team, which has played in the lower-tier United Soccer League since 2014.
Republic team officials called the moment historic and thanked fans.
“Today is a day that will go down in history for our club and our city,” the team said in a statement. “We would not be here without the support of our fans and the entire community. This is their day.”
The news conference will be followed at 4 p.m. by a fan gathering on Capitol Mall, including speeches, music, food and other entertainment.
The announcement will mark the successful conclusion of a laborious five-year effort by Sacramento community leaders and various investors to secure a franchise in MLS, the top soccer league in the United States and Canada.
That effort stepped up a level this spring after Los Angeles billionaire businessman Ron Burkle, who co-owns the Pittsburgh Penguins of the National Hockey League, and Hollywood movie producer Matt Alvarez joined Sacramento businessman Kevin Nagle as lead investors, injecting more financial heft into the local effort.
The Burkle group has been in negotiations with MLS league officials on final deal terms since late April.
That group has said it plans to begin pre-construction site work immediately on a $250 million, 20,000-plus seat stadium on undeveloped land in the downtown railyard east of Seventh Street.
The City Council this year agreed to offer the soccer investment group a $33 million incentive package to help it seal the deal with MLS. That included setting up an infrastructure financing district that would use future increased property tax to reimburse the soccer development group for building an estimated $27 million worth of streets, sewers and other new infrastructure on land near the stadium. The deal also 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.
Steinberg said he will ask the City Council in the coming weeks to modify the financing agreement to give the development group more financial flexibility. After discussions with Burkle, the mayor said he will propose the $27 million portion be made as a loan to the soccer investor group. The loan would come from a city reserve fund.
The Burkle group would pay the loan back to the city with interest. If the Burkle group begins building other projects on land it is buying near the stadium, that development would produce new property tax revenues that could be used to supplement Burkle’s loan repayments to the city.
The mayor said the proposed loan makes it easier for the Burkle group to finance its $200 million league expansion fee, as well as pay for increased construction costs. The league has bumped the expansion fee up in recent years from $70 million to $150 million to the $200 million level this year.
That expansion fee is part of an estimated $500 million to $600 million the Burkle group is expected to invest to bring the team to Sacramento.
That includes Burkle’s pending purchase of the 14-acre stadium site plus an additional 17 adjacent acres to do additional development, potentially housing, retail, entertainment or other commercial development.