A Brewery at the stadium would be awesome.
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I think a public contribution to the stadium and to infrastructure in the district is warranted because this district and the stadium are a net public benefit.
300 million plus assuming the risk that the facility runs in the red frankly feels a bit like getting taken to the cleaners.
Negotiate. Make it contingent on MLS, find a private partner who can assume some of the risk on non-MLS bookings, get some guarantees from Kane as far as development timelines, and finally make the number something closer to $100 million (maybe 150?) and I’m in.
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If you’re talking about me (as one of the MLB proponents), go back and read through my history on this site. I’ve been very consistent on what I believe are smart risks for the city to take. I believe Dix Park is the #1 priority for this city until it’s finished. I am against any large, long-term public investment being made on entertainment until we are squared away on how Dix will be funded. That includes soccer stadium, baseball stadiums, etc.
With Dix in the balance I feel Raleigh needs to make very strategic decisions and be very focused on ROI. They need guarantees and they can’t be getting caught up in owning stadiums (soccer, baseball, football, etc). Dix is.at least a $300 million project by itself. Without the land lease high-rises, the park is going to lean heavily on the tourism tax bucket. Thats just the reality.
So instead of blindly accepting a deal that I think we all agree makes no sense unless we land MLS, why can’t we be critical of it and ask our city to work with Kane/Malik on a deal that makes more sense for everyone. Make the $300 million contingent on getting a franchise, or give them a smaller portion for a smaller stadium that can be expanded.
I don’t understand how we aren’t all pretty aligned on this.
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IMO
Dix is not in the equation until the city actually gets a firm financial commitment on a path forward…
I’m not against Dix, but as we have no money committed then why is the money for an Arena in this project off the table?
We bought the land for $52 million. We paid Van Valkenburgh $3 million to map out the plan. We adopted a master plan.
Dix HAS to get funded. This is the biggest, most important project Raleigh has ever, and maybe will ever take on (IMO). I understand t’s not like they need the $300+ million to complete it right at this moment, but we need to be in a position to fund it if and when the time comes.
A $300 million stadium that wants to tap $13 million a year for 25-30 years is a HUGE commitment that will be on the books for a long time. If you sign off on that, it better be the right move.
If you build it, and miss on MLS, you’re in trouble. Can we all agree on that? NCFC / The Courage/ Shaw Football / College soccer / an occasional concert is not going to fill that stadium and if that stadium isn’t staying filled, then it’s not Malik or Kane’s problem. It’s Raleigh’s problem.
That’s all I’m saying. This is a REALLY good deal for them and a REALLY risky one for the city/county. They have to understand that and figure out a way that if this doesn’t work out, it doesn’t cripple Raleigh from moving forward on other major projects like Dix. There has to be a way to meet in the middle here where all parties have a stake in the success or failure of this venture.
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What makes you believe that Dix Park might compete for Prepared Food & Beverage Tax in the future? Is that how park & recreation projects are funded?
“the plan lists four funding options: public funding (city general fund, bonds, taxes), fundraising (Dix Park Conservancy donations, grants), earned income (concessions, event fees, rentals) and value capture (leases of park property, real estate value capture of neighboring property).”
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I’m afraid Dix is going to be a slow burn. The State has a phased departure timeline and I think a lot of the more exciting parts of the master plan will wait until DHHS is completely gone. Some elements, like the land bridge and re aligning Western are going to be particularly expensive. I’m a little concerned that large parts of the Dix plan will be changed before they get to it.
I think we’ll end up with Park bonds somewhere down the line. The ideal scenario would be if an MLS stadium got built and the City did end up getting the tax benefits that Kane/Malik have advertised. If those taxes were realized they might could actually help fund Dix rather than be a drain. I think the proximity of Penmarc is a benefit to Dix as well. If they did build 1.5M sf or whatever crazy amount of office they were planning, the Lake Wheeler corridor is going to see a significant boost in traffic and be improved sooner than later, with just cause.
I’d like to see the whole area South of Western have a Renaissance.
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If we wait until Dix is fully funded and complete, well…there goes anything else in my lifetime.
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It says so in the master plan. It’s one of 4 bullet points on the graphic that speaks to funding. The main funding outside of grant money is land lease off lake wheeler, which was a hot button topic that the city backed off of a bit during the adoption of the master plan.
Phase 1 and 2 are on a 10 year timeline. The
last estimate was that the entiree project is slated to take 20-25 years. All of which fall within the timeline of this stadium $$ ask.
Look, everyone gets their own opinion . Mine is that unless they can guarantee MLS, I don’t want to guarantee them $300 million on a 20k seat stadium over the next 20 years… I also don’t think Kane walks away from the property after he just shone such a bright light on it and exposed it’s value to the world. Again, just my take.
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DHHS has leaseback options on areas of Dix for the next 10-25 years depending on the facility. It’s a phased exit from the site. They may move sooner than that, but I don’t think they’ll complete the master plan construction items before DHHS is gone. I would be shocked if the City/State both hold to the planned timelines, and something very impressive will have to happen to the land off Lake Wheeler for it to generate the funds to build the park. If they spend $7M to rehab a building and turn it into a boutique hotel, they’ll have to pay off the $7M before making anything to spend on significant park construction. If Goodman, Goodnight, and the Poole estate want to fund the park we could see progress on a rapid timeline, but I don’t know how realistic that is either.
I think with Kane/Penmarc the issue is prioritization. With the Stadium, Downtown South could become Kane’s signature project, eclipsing North Hills and Smoky Hollow. After seeing the first Downtown Stadium proposal and now Downtown South there’s clearly a vision for how all of this could work together and feed off itself.
- With the stadium, I think it’s likely that the other projects keep moving at full speed with Downtown South added to them.
- Without the stadium I think they could still acquire the site, but it may fall behind the build out of North Hills East, the revamp of the Lassiter Mills side of North Hills Proper, Smoky Hollow, the Clancy site.
I respect everyone’s opinion here. It’s just an interesting topic because of it’s scale, and because there’s so much to speculate on.
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Sorry, I may have missed this, but did you provide any actual research for this? You seem to feel very strongly that stadiums generate lots of growth, but I don’t think I’ve seen you provide any evidence.
To me, when it comes to ROI, we’re obviously comparing the total economic activity with and without the stadium. To generate ROI in this context, then the economy would have to grow faster because of the stadium inself. So, if for example, without the stadium we had 3.5% growth, and with the stadium we had 3.6% then the difference in those two numbers would be the Stadium’s ROI. But, if the numbers are the same, it seems like the stadium (or museum, or whatever) didn’t actually generate any ROI.
It seems to me (and this is where I’m asking you to provide data to the contrary) like the stadium development would probably shift development from one part of the city to another. So, any towers or apartments built near the stadium would come at the expense of some other project (for example, if the Stadium gets built it might mean that one of the other downtown properties, like 400H or Nexus will either be delayed or cancelled). Unless citywide demand for office space or hotel rooms would be significantly impacted by a stadium (or a museum, or any single project). So, in essence, there might be a lot of development right next to the stadium but it’s coming at the expense of some other part of the city. That in itself might be a good thing (if it means fewer suburban apartments).
Two things that are worth noting is that 1. on their own, individual attractions don’t typically generate a lot of tourism, but a collection of attractions makes the city more attractive. 2. I’m totally on board with the idea that an MLS team is a cultural asset. Sports form an important part of our culture, and I think having sports teams adds to the cultural richness of a city. I won’t be on board with these economic arguments until someone shows me convincing data.
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$2,000,000,000 = assessed property value of ‘Downtown South’
$23,178,000 = combined annual property tax revenue to the City & County…EACH YEAR
$695,340,000 = cumulative tax revenue to the City & County over 30 years NOT INCLUDING property value increases nor is this inclusive of occupancy and meal tax revenue generated over time, NOR is it including ancillary development around the project that WILL also happen and further increase the tax revenue numbers.
seems to me that the ROI is pretty straightforward for the $13MM being requested. If I could get that sort of return with my real estate investments, I wouldn’t be on this board. I’d be living on an island…my island.
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I don’t think anyone is questioning the math of the numbers you are putting out there (Edit: Looks like @daviddonovan is doing just that in the next post). I think people are questioning the assumption that everything is going to work out perfectly in a proposal that answers very few questions.
- Will we get MLS?
- If not, who fills the 20k seat stadium?
- If stadium isn’t a true economic driver, is there demand for all of this office space, apts, retail, etc this far away from downtown proper?
- If there isn’t a huge demand for those things, does Kane follow through and build all of it anyways? Nothing holds him to having to do this.
- Will the economy stay strong, keeping Kane in the game for 25 years as this is all built out?
- If the 20k seat stadium is not staying filled all the time, is it making money? If it’s not, it’s a suck on the city. What do we do then?
- If the stadium ends up being a suck on the city, then we can’t fund other things over the next 25 years (+) that we might really want or need to. Do we have a backup plan or way out of this if that happens?
So, see, these are all legitimate questions that they have not answered, and they all really should have been when asking the city to take a large risk and really trust developers to be good on their word regardless of economic climate.
I think you are right. If they build the stadium, fill it nightly, pack the district and put up all of these high-rises around it, then maybe this really is a fine deal for the city and we will see ROI.
Most people on here are asking the tougher questions of how they propose to do all of that when they can’t guarantee a high-volume tenant for their proposed stadium.
I understand people questioning these things seem like Debbie Downers, but they are just the ones that are demanding answers before we sign over $300 million public dollars.
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(EDIT: Actually @Loup20 I am indeed questioning the math of the numbers Jesse is putting out here. Let’s question it!)
So this figure of $2 billion being the assessed property value of Downtown South is really, really wrong. Like, there are some things in life that are a matter of opinion and reasonable people can disagree about. This is not one of them.
That $1.9 billion figure that NCFC throws around is not what the value of the land would be once it’s finished. This is the total amount of money they plan to invest in the project over multiple decades, mostly for things like raw materials and salaries for workers.
It’s tough to say exactly what the land would be worth when completed. (EDIT: I just went straight to the land maps and looked at assessed value rather than look for recent sales, for which there weren’t any good comps. A $2 billion valuation implies that this project would be worth several times per acre what North Hills is worth. And again, Kane and Malik would be developing this land “over a generation,” so much of the land would be assessed at its lower, undeveloped, value for decades.)
Malik and Kane say they have 55 acres under contract, but some of that is the Walnut Creek Greenway, which they can’t build on, and the stadium would take up close to ten acres and theoretically be city-county owned, so they wouldn’t be paying taxes on it, which is sort of the whole point from their perspective.
So an estimate that the land would bring in $23 million a year in property taxes based on a valuation of $2 billion is wildly off base.
(EDIT: I legit LOLed at the oddly specific $695,340,000 million in non-property tax revenue. I can’t even venture a wild guess where that figure could possibly be coming from.)
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Maybe I misunderstood your response but property taxes are paid on assessed land value plus building not just bare land. With that I don’t see how the 2 billion as base for the property tax calculation is wrong once fully developed
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Yeah, upon reflection, I opted to go straight to the land maps and look at assessed value rather than look for recent sales, for which there weren’t any good comps. A $2 billion valuation implies that this project would be worth several times per acre what North Hills is worth.
Sorry the edits are all over the place on this one, but Kane and Malik have also said that they would be developing the land “over a generation,” which is definitely how this stuff happens, so you’d have a lengthy period where much of the land would have little assessed building value, so you’d be taxing just the land value.
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If the county commits $300 million to this stadium, would Kane be willing to sign a contract that over the course of those 25 years that he will commit to building the $1.9 billion in development around it?
If Kane would sign that deal, then go ahead and give them the money. Problem is, I don’t believe any developer in his right mind would commit to that by contract.
That’s really my hold up. The city/county are being asked to commit to a ton of risk while Kane and Malik aren’t being held to anything. i think that needs to change. Money should be contingent on MLS coming (making the risk less for Raleigh owning the stadium), or Kane should commit to big money development around the stadium regardless of how it fares and what the economic climate may be.
**bc you better believe the city/county will be asked to cough up their $13 million annually whether the economy is firing on all cylinders or starting to slide.
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This debate has been really fascinating in unexpected ways, particularly in that the soccer stadium’s most ardent defenders are mostly people who aren’t especially huge soccer fans. FWIW, I like soccer well enough, but my position has absolutely nothing to do with how much I do or don’t like soccer. Over on the MLB thread I’ve talked frequently about how I really love baseball, but I don’t think that spending public money on a baseball stadium is a sensible idea, even though I personally love baseball and would go to games at the stadium frequently.
One thing that I have seen a ton, though, is the idea that having an MLS stadium would make Raleigh “cool.” Now, I seriously question the extent to which having a franchise in America’s third-most-popular soccer league would actually influence anyone’s perception of our city, but that seems to be the theory.
And I actually had the epiphany that most of my debates on this forum actually break down along this cool/normie fault line, rather than yimby/nimby, pro-growth/slow growth, liberal/conservative lines or whatever. Building a downtown stadium is “cool” … maybe even cooler if the league in question is vastly less popular than the NHL. Building a light rail is “cool” … maybe even if cooler if we don’t have any particular plans for where the line would go. Having old warehouses in the warehouse district is “cool” and so on. Conversely, expanding a children’s museum, or building a commuter rail where we already have railroad tracks and investing in bus rapid transit, or building ADA-compliant housing and office space next to a railroad station is super normcore and prudent and uncool, but there’s actually a lot of be said in defense of the prudent and uncool.
Anyway, I started talking with my work sources about this, and I really, truly have no idea what the city/county is going to do about the stadium, but everyone was quite convinced that Marbles is going to get the money for the expansion, so you all have that to look forward to! In particular, I hope this provides more space for folks to visit Freddie Frugal’s Spending Smarts at Moneypalooza, where kids, and maybe some adults, “learn to make smart money choices as you build budgets, balance needs and wants and aim high to save.” (“What do you need and what do you want? Take aim at good decisions!”) It’s really worth checking out.
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“wildly off base”?
305 Church @ North Hills (Allscripts building I believe) sold for $127,000,000 in February of last year…alone.
You are probably correct that the $2Billion is ‘off’…you are just wrong in your assessment of which direction that number would actually be…
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David, Loup,
Your thoughtful responses are appreciated.
I thought we had put the ROI topic to rest acknowledging that there are other factors at play but here you go:
For the valuation and tax base of this project at build out here some estimates:
1,750 residential units downtown class A would retail around 250k per door = 440m value
1.6m class A office space at 430/sqft = 690m value
1200 rooms at 400k a room = 480m value
That’s $1.6b excluding retail, stadium and extra land
Comparables:
(2019) Bullhouse Durham apartments 305units at 79mil = 250k/door
(2015) Renaissance North Hills 229 rooms at 80m = 350k/key (more likely 400k/key in 2019)
(2019) Cap trust tower 300k sqft at 127m ~ 430/sqft