Tuesday, May 7, 2013

Mayor Buddy Dyer talks Stadiums

On Tuesday, Orlando Mayor Buddy Dyer made headlines by stating that the new soccer facility being built by the San Jose Earthquakes of Major League Soccer (MLS) was "kind of like a high school stadium". 

That's quite a statement to make considering Orlando City and Dyer left Tallahassee last week with their tails between their legs after their stadium funding bill never made it to the House of Representatives for a vote. 

Is this just another example of "Buddy being Buddy" or does our beloved mayor actually have a point? We decided to find out what a new MLS stadium is going for these days across the league and what you get for that money.

$67M, New Earthquakes Stadium: At 18,000 seats, the new stadium in San Jose will be the smallest in the league when it opens in 2014. With 12 suites and roughly 1,000 club seats it also has the smallest luxury sections in MLS. While the stadium is an improvement over the current 10,000 seat college stadium the team uses, it is bare-bones with basic materials. The primary reason behind the low cost is because construction and maintenance are being paid for by the team owner entirely. Of course there is a catch to this privately funded stadium, not everything is as it seems. As part of the stadium land deal the team owner struck an agreement with the city to purchase 65 acres of industrial land adjacent to San Jose International Airport and close to downtown that would be re-zoned for mixed-use. With the change in zoning the value of the land value increased from $80M to $130M on paper. Ultimately the team owner paid $89M for the 15 acres where the stadium is being built and plans to develop the remaining 40 acres into mixed-use space that could mean more of a profit off-the-field than on in the future. In the end the stadium is a pre-fabricated, single level concrete design with bleachers and fixed seats, nothing more than a basic stadium.

$95M, BBVA Compass Stadium: When Orlando City planned their stadium they took several trips to Houston to visit the Dynamo's new facility which opened last spring. At 22,039 seats it is the third largest soccer-specific stadium in MLS behind Red Bull Arena and the Home Depot Center. With 34 suites and 1,100 club seats, the facility offers revenue opportunities for the high-spending clientele from the oil and tech-rich Houston area. In addition, the Dynamo went with a modern, space-frame, perforated steel panel exterior to make it look less like a stadium and more like a landmark. The interior is not much more than concrete and steel with high-end finishes and wall art strategically placed to ensure the biggest bang for the back. Ultimately the funding was $60M from the team, $10M from the City in land, and $25M from the County in tax breaks and cash. Also another consideration was the BBVA Compass paid $20M for a 10-year naming rights deal on the stadium or $2M per year to the team. The stadium has hosted several international friendlies, World Cup qualifiers, and a surprise host to several rugby matches.

$105M, Orlando City Stadium: We won't get into great detail here as we have already published an inside look at the new stadium as well as a cost breakdown prior to Friday's news from Tallahassee. When it comes to cost, Orlando City's proposed stadium would be the second most cost-effective facility in MLS behind Houston's. With total seating around 19,000 the stadium would have luxury upgrades and high-end video boards to allow the city to market the venue to other events besides soccer and potentially draw more money from seat licenses and naming rights. 

$110M, Rio Tinto Stadium: Opened in 2008, the home of Real Salt Lake located in Sandy, Utah is considered to be one of the better stadiums in the league. 32 luxury seats, 1,000 club seats, and a total of 20,000 seats combine with some unique architectural features to blend in with the beautiful mountain backdrops. Roughly $10M in land costs were donated by a local contractor, $20M in local hotel taxes were diverted towards the stadium, and the team owner paid the remaining costs while also retaining full ownership of the facility. Mining company Rio Tinto paid between $20M-$30M for a fifteen year naming rights deal for the facility with the money going back to the team. The stadium has hosted the MLS All-Star game in 2009, international friendlies, and World Cup qualifiers.
From there the prices continue upward from $120M for PPL Park just outside of Philadelphia to the "crown-jewel" of the league, Sporting Park outside of Kansas City which was completed at a cost of $200M.

One theme that holds true for all of the stadiums mentioned besides Orlando is that the teams paid more than the Lion's ownership group is proposing. The teams paid between $60M-$80M to fund their stadiums. With the exception of Rio Tinto, the city or county maintained ownership of the each of those facilities upon completion, thus increasing future revenue potential. 

Orlando City is proposing to pay $30M towards their stadium which would be owned by the City of Orlando upon completion. Why is that a reasonable contribution compared to that provided by the other teams mentioned above? San Jose, Houston, and Salt Lake were all existing MLS franchises before they built their new stadiums. They each paid a franchise fee of between $10M-$15M when they joined the league; Orlando City is expected to pay between $40M-$50M to join the league. In the end the franchise fee can only be paid by the owners so the team's contribution of $70M-$80M out of the total $150M-$160M to bring MLS to Orlando is right in line with other franchise costs and stadium efforts.

Come to think of it, Buddy might have a point after all.
UPDATE: After speaking with Robert Jonas of CenterlineSoccer.com Ihave adjusted the figures associated with the new Earthquakes Stadium in San Jose. My apologies if there was any confusion previously.

Photo Credit: Courtesy of Orlando City Soccer Club

7 comments :

  1. Great article. It's good to have comparisons to help put things in perspective. My biggest concern right now is getting the county to agree to the $25M. Hopefully Mayor Jacobs understands the benefits this will bring to her county. Also, is there any reason why they couldnt move forward with an alternate funding plan and still go back to the State next year? Obviously they would not want to be tied in with other teams.

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    1. Mayor Jacobs was rumored to be signing off on the county's $25M this month if the state funding bill would have passed. Since that is not the case I expect her to hold out a bit long.

      The new funding plan will come later this month. I expect the team to boost their portion from $30M to $40M, ask the City to pick-up $25M, and ask the County to pick-up $25M for a new total of $95M. The possibility of State money in the form of a cash investment from the economic development fund is still possible, but it would be smaller, like $5M-$10M.

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    2. Any ideas on where the City's $25M is going to come from? I am sure they may have some issues getting more money out of the city, but would depend on "how" the City is going to provide the funds...

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  2. Where is the corporate backing?

    What about naming rights? Disney? Amway? Bueller??? Come on!

    Look at the other facilities mentioned in this article. BBVA, Rio Tinto...if you want a stadium worth around $100M you need some corporate backing or else you are forced to rely on the whims of state politicians, and we saw how that turned out last week.

    What has the ownership team done with regard to enticing corporate sponsorships?

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    1. I'm kidding here, but it would be interesting to see a LegoLand Stadium. "Built Brick by Brick"!

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  3. I would hope a financial expert hit this already but would Orlando City qualify for the money Universal receives for providing employment in a distressed neighbourhood?

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