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The professional soccer team set to occupy a proposed Albuquerque stadium has made public what it plans to invest in what would be its new home.
New Mexico United would contribute $10 million to help construct the city’s proposed multiuse soccer stadium and pay $800,000 annually in base rent to be the venue’s primary tenant, according to terms laid out in a new three-page “letter of intent to lease.”
The team would also have to pay the city another $100,000 per year but otherwise get to keep all revenue generated by the stadium outside of specific city-organized events.
The letter is not a formal lease agreement, which still needs to be negotiated.
The document released Thursday provides new details heading into a Nov. 2 election that is expected to determine the proposed stadium’s fate.
The ballot will ask voters if the city should issue up to $50 million in bonds to help fund a venue estimated to cost $65 million-$70 million. Voter approval is not technically required for this type of bond – backed by the city’s gross receipts tax revenue – but Mayor Tim Keller’s office has said he would not pursue the stadium if the bond fails.
Should voters greenlight the public investment, officials say the $10 million upfront pledge from United – combined with about $8 million in previous state appropriations – means the city should have enough money available to actually build it.
The team’s planned annual rental and revenue payments, meanwhile, would cover about 30% of the city’s stadium bond debt payments.
The city would owe an estimated $3 million annually for a term now expected to last 25 years. The city would use funding recently freed up by paying off old debt so the stadium bond would not raise taxes.
“Our goal here is to make this a good deal for the voters, a good deal for the city of Albuquerque,” Lawrence Rael, the city’s chief operating officer, said during a news conference Thursday morning at Isotopes Park, a facility United currently shares with the namesake baseball team.
United owner Peter Trevisani touted the letter as a “promise” bigger than numbers.
“This is a commitment that we’re here for the long haul. And, and I think most importantly, it’s a commitment that we believe in New Mexico. We believe deeply in our state, we believe deeply in our city, we’re willing to put not just our capital, but all of our resources behind it,” Trevisani said.
The letter, signed by Rael and Trevisani, is not a formal lease but provides “main points of agreement” going into that process and is legally binding should the bond pass, Rael said.
The document does provide an out to both parties, stating that either can terminate the letter of intent if the parties fail to reach terms on stadium design, funding or the ultimate lease and development agreement.
According to the letter, United will negotiate at least a 25-year lease with the city for the venue, carry out a “community benefits agreement” with the neighborhood where the stadium is built, “endeavor” to use local vendors for stadium concessions and try to bring in a women’s professional soccer team in the next three years.
The letter stipulates that the city, which would own the venue, will get exclusive use of it for 15 days per year and not be responsible for day-to-day operating costs.
Except for city-organized events, all stadium revenue – including potential naming rights sponsorships, other advertising and parking – would go to United, but the terms require the team to pay at least $100,000 in addition to the base rent.
Rael said the eventual lease agreement will outline what happens in a breach of contract, but that he is confident the city will be protected in part because the ownership is local.
“I know where these guys live. You all know. They are New Mexicans, and I think that’s really super important,” he said. “We have New Mexicans investing in New Mexico.”
He also noted the letter’s requirement that United have business interruption insurance “to support the team’s annual obligation to make base rent payments to the city.”
He said the terms outlined in the letter provide voters with additional details as they prepare to make a decision.
“This information that we’re presenting today really … in my opinion begins to put some structure and some commitment into the project,” Rael said.
Among the notable questions still surrounding the project is the location, which officials said they will determine if the bond passes.
A city consultant hired to evaluate a stadium’s feasibility considered four sites, identifying two as “preferred” locations – Second Street/Iron and Coal/Broadway.
The firm recommended 10,000 to 12,000 seats, estimating the project would cost about $65 million to $70 million based on the preferred sites. Both sites currently incorporate at least some privately owned land, and the consultant’s estimates did not include property acquisition costs. The projected price tag also did not include parking beyond spaces needed for staff.