Sacramento, MLS to announce expansion
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.