Sacra­mento, MLS to an­nounce ex­pan­sion

Lodi News-Sentinel - - SPORTS - By Tony Biz­jak, Mar­cos Bretón, and Michael McGough

Sacra­mento Repub­lic FC and Mayor Dar­rell Stein­berg will take part in a ma­jor an­nounce­ment about “the fu­ture of soc­cer in Sacra­mento” Mon­day in down­town Sacra­mento, the team an­nounced Wednesday.

Sources with di­rect knowl­edge told The Sacra­mento Bee on Tues­day that the MLS is ex­pected to for­mally an­nounce an MLS ex­pan­sion fran­chise at that news con­fer­ence. It will be fol­lowed by a fan event in the af­ter­noon. De­tails on a fan event are ex­pected to be re­leased later Wednesday.

Sacra­mento would be­come the 29th team in the fast-grow­ing league, and would be­gin play in 2022 in a new sta­dium to be built in the down­town rai­l­yard.

Stein­berg and key in­vestors Ron Burkle, Matt Al­varez and Kevin Na­gle will join “ad­di­tional spe­cial guests” for an 11:30 a.m. news con­fer­ence at The Bank on J Street, the team said in Wednesday morn­ing’s state­ment to me­dia.

In the case of re­cent fran­chise ad­di­tions, MLS Com­mis­sioner Don Gar­ber has typ­i­cally an­nounced the ex­pan­sion with lo­cal of­fi­cials dur­ing a pub­lic cer­e­mony in the new city.

The an­nounce­ment will mark the suc­cess­ful con­clu­sion of a la­bo­ri­ous five-year ef­fort by Sacra­mento com­mu­nity lead­ers and var­i­ous in­vestors to se­cure a fran­chise in MLS, the premier pro­fes­sional soc­cer league in the United States and Canada.

That ef­fort stepped up a level this spring af­ter Los An­ge­les bil­lion­aire busi­ness­man Ron Burkle, who co-owns the Pitts­burgh Pen­guins of the Na­tional Hockey League, and Hol­ly­wood movie pro­ducer Matt Al­varez joined wealthy Sacra­mento busi­ness­man Kevin Na­gle as lead in­vestors, in­ject­ing more fi­nan­cial heft into the lo­cal ef­fort.

The Burkle group has been in ne­go­ti­a­tions with MLS league of­fi­cials on fi­nal deal terms since late April.

That group has said it plans to be­gin con­struc­tion im­me­di­ately on a $250 mil­lion, 20,000-plus seat sta­dium on un­de­vel­oped land in the down­town rai­l­yard east of Sev­enth Street.

Sacra­mento cur­rently is home to the Repub­lic FC soc­cer team that has played in the lower-tier United Soc­cer League since 2014. The ex­pan­sion team will take over the Repub­lic FC ban­ner.

The team is­sued a state­ment Tues­day say­ing it looks for­ward to shar­ing in­for­ma­tion in the com­ing days: “We share the great ex­cite­ment and an­tic­i­pa­tion in

our com­mu­nity about Sacra­mento’s bid to join Ma­jor League Soc­cer. We will con­tinue to re­spect the MLS ex­pan­sion process and re­main con­fi­dent about the fu­ture of our club and our city. We look for­ward to shar­ing more in­for­ma­tion in the days ahead.”

Stein­berg, who served as a deal fa­cil­i­ta­tor, de­clined com­ment this week pend­ing a for­mal league an­nounce­ment. Stein­berg has pro­moted Ma­jor League Soc­cer as an­other step in the evo­lu­tion of down­town, and as an eco­nomic and en­ter­tain­ment en­gine for the re­gion.

“We have demon­strated to the league that we want this,” he said ear­lier this year. “We are ab­so­lutely the right choice for the league.”

The City Coun­cil this year agreed to of­fer the soc­cer in­vest­ment group a $33 mil­lion in­cen­tive pack­age to help it seal the deal with MLS. That in­cluded set­ting up an in­fra­struc­ture

fi­nanc­ing district that would use fu­ture in­creased prop­erty tax to re­im­burse the soc­cer de­vel­op­ment group for build­ing an es­ti­mated $27 mil­lion worth of streets, sew­ers and other new in­fra­struc­ture on land near the sta­dium. The deal also in­cludes $2.4 mil­lion worth of build­ing per­mit fee waivers and other tax re­bates, and up to $3 mil­lion worth of traf­fic con­trol and polic­ing on city streets ad­ja­cent to the sta­dium dur­ing soc­cer matches.

The city also will re­write its sig­nage or­di­nance to give the team rights to in­stall five dig­i­tal bill­boards around town.

Stein­berg said he will ask the City Coun­cil in the com­ing weeks to mod­ify the fi­nanc­ing agree­ment to give the de­vel­op­ment group more fi­nan­cial flex­i­bil­ity. Af­ter dis­cus­sions with Burkle, the mayor said he will pro­pose the $27 mil­lion por­tion be made as a loan to the soc­cer in­vestor group. The loan would come from a city re­serve fund.

The Burkle group would pay the loan back to the city with in­ter­est. If the Burkle group be­gins build­ing other projects on land it is buy­ing near the sta­dium, that de­vel­op­ment would pro­duce new prop­erty tax rev­enues that could be used to sup­ple­ment Burkle’s loan re­pay­ments to the city.

The mayor said the pro­posed loan makes it eas­ier for the Burkle group to fi­nance its $200 mil­lion league ex­pan­sion fee, as well as pay for in­creased con­struc­tion costs. The league has bumped that fee up in re­cent years from $70 mil­lion to $150 mil­lion to the $200 mil­lion level this year.

That ex­pan­sion fee is part of an es­ti­mated $500 mil­lion to $600 mil­lion that the Burkle group is ex­pected to in­vest to bring the team to Sacra­mento.

That in­cludes Burkle’s pend­ing pur­chase of the 14-acre sta­dium site plus an ad­di­tional 17 ad­ja­cent acres to do ad­di­tional de­vel­op­ment, po­ten­tially hous­ing, re­tail, en­ter­tain­ment or other com­mer­cial de­vel­op­ment.

The up­com­ing an­nounce­ment rep­re­sents the cul­mi­na­tion of a long ef­fort, start­ing with Na­gle and War­ren Smith, both of whom have been Repub­lic FC own­ers since the team was first launched in the USL.

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