LOUISVILLE, Ky. (WDRB) -- Louisville Metro government will borrow $30 million to buy and improve about 40 acres in Butchertown so that Louisville City FC, the professional soccer team, can build a 10,000-seat stadium on the site.
The stadium, planned to open in March 2020, will be the centerpiece of a $200 million development that will also include restaurants, one or two hotels and office buildings and take a decade to build out.
Announcing the deal Friday, Mayor Greg Fischer said the stadium will position Louisville to compete for a Major League Soccer franchise “down the road” and help attract young, educated professionals to the city.
“This is a prime, prime piece of under-utilized real estate that is adjacent to the really popular neighborhoods like NuLu and Butchertown,” Fischer said while standing in a self-storage facility that is part of the site.
Mike Mountjoy, an investor in the privately held soccer club, said the stadium will cost about $50 million.
Louisville City FC has played at the Louisville Slugger Field baseball stadium during its three years in the professional United Soccer League. Attendance has grown steadily, with crowds averaging about 8,050 this season – up from 6,840 at the same time last year and 5,335 in 2015, according to team data.
Mountjoy, a founding partner of Louisville accounting firm MCM, said the team has been losing money despite growing attendance mainly because of an unfavorable lease at Slugger Field.
But the local investors who started Louisville City FC had a “strategic plan” to be the best team in the USL, which could lead to “an opportunity” to have an MLS franchise despite challenges like not being a “top 40” television market, Mountjoy said.
“This is the one opportunity we have in this community to have major league sports,” Mountjoy said during the news conference.
While 10,000 seats is too few for an MLS team, Mountjoy said the facility will be designed with a 10,000- or 15,000-seat expansion project in mind down the road.
The deal’s documentation won’t be made public until Monday, said Jeff Mosely, Fischer’s general counsel.
The financing hinges on state approval of a special tax district where a large portion of the new state taxes generated by activity on the site go back to Louisville City FC principals, who will also develop the non-stadium portion of the property.
It wasn’t clear Friday how much the state will contribute to the project through the tax-increment financing scheme.
Louisville City FC is scheduled to repay the city about half of Metro’s contribution – or $14.5 million – over a 20-year period. Metro government could get up to $2 million more if the stadium achieves unspecified “financial markers,” according to a press release from Fischer’s office.
Fischer sought to distinguish the soccer stadium deal from the financing of the KFC Yum! Center, the publicly owned downtown arena built in 2010.
The tax district that supports the Yum! Center hasn’t lived up to expectations, prompting the city and the University of Louisville to increase annual payments to the arena.
“Not one penny of Metro government money will go toward building the (soccer) stadium,” Fischer said.
If the investors fail to build the stadium, Metro government can take control of the site and “develop it however we want” or demand reimbursement of the city’s costs from the Louisville City FC investors, Fischer said.
“This is how you build a partnership,” he said.
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