CRAWFORD | For Louisville, pro soccer stadium looks like a safe - WDRB 41 Louisville News

CRAWFORD | For Louisville, pro soccer stadium looks like a safe bet

Posted: Updated:
WDRB photo by Eric Crawford WDRB photo by Eric Crawford

LOUISVILLE, Ky. (WDRB) – The biggest challenge for Louisville City Football Club owners in building a new downtown stadium for their fledgling franchise has been the behemoth basketball arena down the road.

With the KFC Yum! Center financing struggles fresh on the minds and wallets of everyone from the Metro Council to local taxpayers, undertaking a stadium project that would require some public money is a tricky sell in Louisville.

So one of the first things that Louisville City FC board member Mike Mountjoy told me when I sat down with team ownership recently was, “This isn’t the KFC Yum! Center.”

Fellow board member and co-owner Tim Mulloy quickly chimed in, “We are the backstop on this, not the taxpayers.”

Those were some of the same themes that Louisville mayor Greg Fischer sounded when he announced that the city has come to an agreement with owners of Louisville City FC to commit $30 million toward a planned soccer stadium in the Butchertown area, on the site of an industrial brownfield. The 10,000-seat facility will be built with the ability to expand easily to 20,000, the minimum required for attracting a Major League Soccer franchise.

As part of a larger $200 million development in the area that will include restaurants and office space, the project is expected to revitalize the Butchertown area and provide a boost to Waterfront expansion and other areas near East Market that are developing.

Fischer made clear, the city will not build the stadium or own the stadium. The city’s prime contribution will be the cleanup of the land, and the land itself. But the owners of the team will build and pay for the stadium.

“It’s going to be a great front door," Fischer said. "It’s going to be a great look from the interstate for the city ... For a piece of property so close to the central business district not to be developed is a real shame, and you’re going to see great growth there.”

Is this a good investment for a city already being stuck with the maximum payments it can have under law for the KFC Yum! Center? Fischer and Louisville City FC officials point out that the city won’t own this stadium, and won’t be on the hook for yearly payments. Moreover, the city had to get involved financially for the developers to get a Tax Increment Financing district around the property. The minimum city investment for that is $15 million, but Mountjoy said it could make that back several times over because the club does not plan to keep local TIF revenues, but let the city keep those instead.

Fischer said about half of the city’s $30 million investment would be paid back by the club, which would keep TIF revenues on the state level to support the stadium, with ownership developing property around the stadium to further support the facility.

Soccer stadiums, as a rule, are not big money makers. But they can spur development that makes money for a wider area.

The city commissioned a study that looked at many sites around Louisville, including the Fairgrounds, before narrowing to four or five, including a property on the West side of Ninth Street. The Butchertown site came with the most obstacles – the clean-up needed, much of the land was privately held, it wasn’t on the market. But it also promised some of the most upside, with a pedestrian bridge from Indiana nearby, and a chance to plug into other development just East of the main business district.

The United Soccer League endorsed the site, which fits with the specifications Major League Soccer would have for an expansion project. Team owners said the state didn’t seem to have a great deal of interest in building it at the Fairgrounds, which was an option I had proposed in a recent column.

“We’ve got to be downtown, because our fans want to be downtown,” Louisville City president and chairman John Neace said. “Millennials and that current landscape are a big part of this.”

“This is the right time for this investment,” Fischer said at an afternoon news conference. “Soccer is tremendously popular among young adults, who we want to encourage to move to our city. We have 30,000 open jobs. We need more people to move here. And it’s really popular with our growing international community, as well. “

One thing that really isn’t at issue is whether Louisville soccer fans can fill the stadium. Louisville City has been among the top-drawing teams in the USL since the franchise began play in 2015. It recently packed 13,182 into Louisville Slugger Field, where it has played its home games, for a match against FC Cincinnati.

Sharing Louisville Slugger Field has served the club well as a starter home, but the facility really isn’t adequate for a professional soccer team.

Given its KFC Yum! Center experience, no one in Louisville will go into any new facilities project with eyes closed. Rarely do they pay off, if you’re looking for a large return on a public investment.

In this case, the public investment is rather small, about $15 million after the initial investment is paid back.

With the KFC Yum! Center, for the city to make money it had to lure businesses into the downtown district around the arena to generate enough tax revenue to be successful. It has not.

With this project, it’s on the developers to bring in enough businesses and restaurants around the stadium to make the project work. If it doesn’t, the city could be out some money. But it also will have a refurbished area in Butchertown where now stands an industrial brownfield that really isn’t generating revenue for anybody.

Yes, the people who really stand to profit from this are the owners, who are developing the area around the stadium. But they’re also the ones taking on most of the financial risk. The city money in this is the catalyst to begin construction, and the key to obtaining TIF financing.

Will the city benefit? In this case, it appears most likely that it will. We’re all wary of public financing of this kind of thing.

And I’m the first person to say that there are times when this city overspends to develop things downtown that could’ve been built elsewhere. I’m not for sacrificing the fiscal well-being of this city on the altar of a downtown that sometimes seems more monument to politicians than practical for the people.

But in this case, for its initial investment the city gets to clean up an industrial brownfield and enhance its waterfront area, while the debt is undertaken by the club ownership, which also is responsible for the yearly payments. Even in a worst-case-scenario, if the city got none of its money back, it still would wind up with a property that was better off than before the project started, at least with the potential of generating tax revenue.

And the guess is that the worst-case scenario won’t play out in this situation, because soccer is immensely popular and growing. And if this franchise were to strike gold and somehow catch the eye of MLS, it could pay off many times over. Even if it doesn’t, Louisville fans have proven they will support the club at its current level, and that support doesn’t look like the type that will go away.

In short, this is where the club ownership wants the stadium, where the city wants it, where the league wants it, and where the team’s fans want it -- I've heard from them. And the Butchertown community seems to be in favor of it.

If the city’s contribution isn’t excessive – and in the case of these stadiums, this one isn’t – I don’t see why this shouldn't work.

The Metro Council will have its own questions, of course, and it should. And if we've learned anything in this city, it's to withhold final judgment until we see everything on paper. But there should be no question about this – as sports investments go, pro soccer in this city is a pretty safe bet.

Copyright 2017 WDRB Media. All Rights Reserved.

  • Sign Up for the WDRB Sports Newsletter

    * denotes required fields

    Thank you for signing up! You will receive a confirmation email shortly.
  • Sign Up for WDRB's Sports Newsletter

    * denotes required fields

    Thank you for signing up! You will receive a confirmation email shortly.
Powered by Frankly
All content © Copyright 2000 - 2018 WDRB. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.