You’re not paying for it. That’s the point. As @TedF said earlier, this is exactly what this pool of money is for.
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PNC is also a null point because they built an arena and giant parking area with zero opportunity for mixed use. They designed that entire project to be a “get in, get out via car” development. I think Bulls stadium in Durham would be a better comparison. Surely Kane, the master of parking deck pedestals, would not waste dozens of acres on surface parking like PNC, and the fact that this area is walkable (distance more so than safety) to a bunch of residential and is on a BRT line is huge for spurring adjacent development. Yes it’s a sports stadium but it’s more a mixed use opportunity zone.
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Random observations, thoughts & questions (some rhetorical), with a few opinions thrown in for good measure:
- Gotta agree with @Tenkai here. How does the ROI of the soccer/entertainment complex itself (without Kane’s developments) compare to the ROI of other projects seeking inter-local funds? I’m not discounting the increased property tax revenue that Kane’s office/retail/residential developments would provide, but you’ve got to compare apples to apples.
- @Tenkai & @dtraleigh, building a stadium/arena and hoping adjacent development will occur is not a promising proposition. Having a developer (and one with Kane’s track record) involved on the front end is the closest thing to a sure thing. Kane delivers.
- I’d like to see specific details from Malik regarding what other events would be hosted at his stadium/center/complex, whatever you want to call it. (Guess I should refer to it as DESC). If college football, who/what/when. If lacrosse, who/what/when. If concerts, who/what/when. I want to see verifiable and realistic projections re: revenues from visitors outside of Wake County.
- Look, I’d like to see the DESC get built and I’m okay if it is allocated some of the inter-local funds. I just have to remind myself that this is a for-profit venture, and there are non-profits that need money as well.
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NC Courage is not just one of the best teams in the US, it’s one of the best women’s soccer teams in the whole world and gives this area international attention. This soccer stadium and complex would help them and might even bring in more sporting events to this area.
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Carraleigh would have to be bought up and turned into dense multifamily and mixed use property. If that happens, yah, it will be connected.
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While I understand wanting to see this sort of detail, it’s this same level of assuredness that’s keeping Raleigh from building larger towers. There has to be a level or risk if you want the big reward. Frankly, given the health and viability of Raleigh, this is as close to certainty that you are going to get. Not only do we have an exploding downtown, rapid growth, and excellent fundamentals, we have a proven developer partnering with an established owner of the area’s two soccer teams.
There’s no doubt in my mind that this project, if it does go to the Penmarc site, will stretch the core of the city all the way to the Beltline in a very meaningful way that will only encourage developers and investors to pour into south Raleigh (if Kane doesn’t beat them all to it).
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A good comparison in size would be the Allianz Field area in St Paul. 35ish acres of MLS stadium and proposed development.
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You have to believe there is more to this story.
Let’s just talk worst case scenario.
- You build the stadium to MLS spec but MLS doesn’t expand past 32 teams and Raleigh doesn’t get one.
- Stadium ends up being used for NCFC and Courage games and other soccer events + concerts
Either they know something we don’t about MLS expansion or they aren’t putting all their cards on the table here. I find it very hard to believe that Kane would build an entire district this far from the downtown grid around a stadium with no MLS bid.
While NCFC and Courage will see an uptick in attendance, those teams will not be able to generate the out of town pull to fill hotel rooms or the buzz necessary to anchor a full new city district this far from the core. It’s also not great to bank on concerts either. One this this area is not short on is concert venues. PNC, Red Hat Amphitheater (soon to be replaced by Dix Amphitheater) Koka Booth, Walnut Creek. An fully uncovered outdoor venue created for soccer would have a hard time competing with these sites for 20k + sized acts.
So, maybe they slow play the stadium and move a more temporary type stadium (like the Cary one) here until things become more clear. Either way, Kane holding that land is likely a good investment for him in the long run. But betting it all on a stadium with no professional team just seems too risky for a savvy investor like Kane.
For Malik, this is a no brainer. He gets the tax money to build a stadium so he doesn’t have much skin in the game. But why would Kane assume all the risk here?
Lots of questions still to be answered.
(Also note that Malik talks about expansion to 36 teams and says all leagues have 36 teams, but that’s not true. MLB, NBA have 30. NHL has 31 and NFL has 32. So why did he specifically say 36?)*
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I agree with you @John and another point I keep reading on here is that this land was automatically going to be purchased and developed in the near future. As far as we know, this was not the case. Soccer and Steve Malik were the single catalyst for this development. He brought MLS to our doorstep (even though it is a convoluted process) and he built this partnership with Kane and presumably others to invest 1-1.5 billion dollars.
Then my challenge to you is to find an MLS stadium that has 1) been built in an urban environment and 2) been a catalyst to economic development around it. It’s not that easy. Many MLS stadiums are also NFL stadiums (Seattle, New England, Atlanta), in the suburbs (Dallas, Kansas City, Salt Lake, Chicago, Columbus), or built on legacy stadium sites (Toronto, Portland). The closest non-Chester proxy I can think of is Harrison, NJ, across from Newark, adjacent to both NJ Transit and PATH and therefore should be perfect for dense mixed-use development. But again, other than a few wood-frame residential buildings, there’s not much there there.
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You’re right that this tax is designed for entertainment/sports purposes, and that there’s no additional cost to the local taxpayers. However the cost to us is the opportunity cost—other projects that might be better investments that miss out on this money.
Re: your point about bringing in ppl to hotels and restaurants, we need to ask ourselves if a minor league soccer team is really going to bring people to our hotels/restaurants? I just don’t see it. And building this thing on spec with hopes of luring MLS? That’s an awfully big gamble. Cart is waaaay before the horse on this one IMO, especially since Malik has publicly stated he doesn’t like our chances for the 28th bid.
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Um…North Hills? I doubt that the district depends on the stadium; I see it as complementary, not obligatory.
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Malik is BRINGING the economic development with him in the form of his partnership with Kane. Kane continues to be successful on everything he touches. He’s also establishing it within the context of development that’s already happening nearby. First we have Dix Park a few blocks west. We have the development proposed at S. Saunders and Lake Wheeler. We have Earp’s land sold for residential. We have all sorts of investment pouring into South Park, and in the west South St. corridor. Frankly, I’m baffled how anyone in this informed community sees a risk of failure given its context.
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I wonder if Kane will call it the Penmarc? Seems like a cool name to call a development!
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Because when you’re talking about spending $300 million dollars on a project type that has turned out to be a boondoggle almost everywhere else it has been attempted in the country, yes I think you can be a little skeptical. These sports facilities almost never pencil out. There are better ways of spending the hospitality tax dollars, including an expansion of the convention center, which DOES generate big numbers for hotel nights and restaurants in a way a currently-minor league soccer team never could. That land, as it is, is too valuable to not be developed within the next decade, soccer stadium or not.
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Folks, United States Soccer has a Board of Directors. One of those members is guess who? Steve Malik. Guess who the other "pro representative’ is? Steve Garber, Chairman of Major League Soccer.
Do you naysayers think Steve has not been working this relationship behind the scenes for several years? Do you really think he’s just suggesting that he and/or Raleigh just invest a lot money (the vast majority from he and John Kane) at a pipe dream?
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In terms of hotel rooms I have no doubt it will bring in hotel stays. The soccer stadium can be used for high school and regional soccer tournaments and college soccer tournaments which always generate hotel stays. It might be able to host Shaw football and soccer programs as well? I love Marbles but it is mostly full of local kids and the parents may grab a bite there but they mostly don’t eat in the downtown restaurants with the kids. My feeling is that all of these attractions and more are needed in Raleigh. The more things there are to do downtown the more people will want to come and stay. The soccer stadium is just one more attraction that will be a place for people to visit downtown. This location answers the problem that many have with downtown stadiums in that they stay empty a lot of the time so having it on the edge of downtown is actually a plus. I measured it at 1.5 miles from the Hudson condominiums so a long walk but not out of the question if we improve the walkability.
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I know that the gateway project (that never seems to get out of the ground) already has that name, but a significant project at Penmarc sure would feel more like a gateway to me.
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To be clear, they are the ones investing $1.5B, and are asking for $300M over a couple of decades from coffers that they are predicting to replenish at a higher rate. Now, we know that numbers are presented in their best possible light, but we know that it won’t be a tiny number.
To be clear, they are not asking for the city to pony up $300M up front.
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