By Ben Nicholson
October 7 – An economic impact study analysing the impact of Sacramento Republic FC’s proposed MLS stadium has been released, cataloging an enticing list of fiscal benefits.
‘The Critical Mass Report’ prepared by independent financial advisory firm Capitol PFG estimates total net operational output of an MLS stadium in the Railyards to be approximately $25.6 million for Downtown Sacramento, $30.5 million for the City of Sacramento, $22.1 million for the County of Sacramento, and $13.8 million for the Sacramento Region.
The club appears to be unperturbed that MLS granted Minnesota the twenty-fourth expansion spot – the final expansion spot for the league’s previously stated targeted size come 2020.
Since then, and likely fuelled by the clamor and glamor of cities like Las Vegas and San Antonio presenting viable expansion opportunities, Garber expressed that the league would review whether to expand beyond this target. Announcements on this front, however, are not expected until December – after the Board of Governors meeting.
The report suggests that the oft-forgotten capital of California, Sacramento, could use the MLS to “re-establish Downtown as the cultural, commercial and community hub for the entire region.”
The ambitions are stated as such:
“The project will integrate all the elements that are attractive to a modern urban lifestyle, including proximity to transit, work, recreation and entertainment. It is the largest urban infill project in the country and will nearly double the size of Downtown Sacramento.”
The carrots dangling at the end of this stick are:
· The creation of over 1,755 jobs during the construction period, of which 130-220 will remain during ongoing operations
· The generation of $200 million of gross economic activity during the construction phase of the project.
· The generation of $30.5 million of annual economic activity with ongoing operations in the City of Sacramento alone, totaling $1.24 billion over a 30-year period, $774 million on a net present value basis.
· The provision of entertainment for an anticipated 500,000 annual visitors.
· The generation of an estimated $2.2 million of annual fiscal benefits within the County, with approximately $800,000- $900,000 directly benefiting the City of Sacramento.
· The provision of an entertainment asset to Downtown Sacramento to aid in a key economic development goal of the City of Sacramento.
These figures are premised on observation of similarly situated USL clubs who have expanded successfully into the MLS. The report cites expansion cities Seattle (2009), Portland (2011), Vancouver (2011), Montreal (2012) and Orlando (2015), using the baseline average figure of $16million per year as the operational spending on the team and stadium.
Each of these cities had already developed fan bases and proven sponsorship and ticket sales, which only rose upon expansion. Thus the report uses the operating figures of these clubs and assumes a similar 325% increase in ticket sales so as to draw the monetary conclusions.
The report highlights how Sacramento Republic FC has outperformed the other mentioned teams at the USL level. For example, in 2014, the team averaged 11,293 attendants per game, and already has a waiting list of over 600 for MLS-only season tickets.
Therefore, since the proposed $200million stadium will seat 18,000-22,000 spectators, the club would not even need the anticipated 325% attendance increase for in fact they could only house less than a 100% increase, which is presumably accounted for in the calculations for ticket sales.
But soccer is not all that the stadium is good for. The idea is that on top of the 20-22 soccer games per year played there, college and high schools would use the stadium on occasion for games, as would rugby matches, lacrosse, and festivals and concerts.
An unstated but apparently necessary component of the calculations is that the stadium is privately funded and subject not to the vanilla tax credits that cities have dolled out to their peril in previous stadium build adventures.
Evidencing this is that the report considers “property taxes, sales taxes, transient occupancy taxes and other taxes and fees [to provide] an estimated $2.2 million of annual taxes and fees will be realized within the County, approximately $800,000-$900,000 going directly to the City of Sacramento.”00
The calculations are contingent on the development of “additional surrounding development, including retail, restaurant, office space and residential units.” But already promising moves are happening in this arena as businesses have made contact, inquiring about the availability to operate in the exciting new area.
However, all of this is contingent on the MLS awarding the city an expansion spot in the first place.
If the city does get the green light, the plan is to have the stadium completed by 2018.
Contact the writer of this story at moc.l1734848866labto1734848866ofdlr1734848866owedi1734848866sni@n1734848866osloh1734848866cin.n1734848866eb1734848866