City, NM United chart anomalous partnership - Albuquerque Journal

City, NM United chart anomalous partnership

Copyright © 2021 Albuquerque Journal

It’s not about soccer.

And it’s not about a stadium.

At least that’s the messaging of Peter Trevisani, principal owner of New Mexico United, and the team’s passionate supporters hoping Albuquerque voters on Nov. 2 approve a $50 million gross receipts tax revenue bond to jump start construction of a stadium for Albuquerque’s third-year professional soccer team, which competes in the USL Championship league.

“This is an aspirational project that really can change so many things,” Trevisani said Sept. 23 at a joint news conference with city of Albuquerque leaders about a preliminary agreement for United to be the primary tenant in a proposed $70 million soccer-specific stadium, which could also be used for a limited number of other purposes.

But, even aside from the fact that a location has not yet been chosen for construction, the Albuquerque-United deal is unique from other public-private stadium deals in several ways, starting with the fact that it’s going before voters at all. City leaders elsewhere have approved public financing packages for several USL stadiums without a public vote.

And based on the league’s recent history, many of its teams’ stadiums are built, or already have much of the financial legwork completed, even before the USL brings in a team at all. Here, the team came first with plans for a stadium to follow.

And, while United would unquestionably be a primary beneficiary of a new stadium, the city of Albuquerque — not the team — would own the stadium and is putting up the bulk of the money.

“United’s plan is unlike anything else we’ve seen in that league,” said Neil deMause, co-author of the book “Field of Schemes.” He also runs the Field of Schemes website that takes a critical look at publicly financed stadiums and arenas around the country.

“It’s more similar to early MLS stadium plans, both in terms of the size and the costs. I think it’s sort of an acceleration of the kind of small-scale stadium deals that we’ve seen the USL do.”

While there is a $10 million upfront commitment from United as well as an agreement to pay $22.5 million in rent over 25 years after the stadium is built, most of the financing would come from the bond plus nearly $9 million already secured from state lawmakers, including $4 million directly from the governor’s office.

As currently proposed, the stadium United would call home would have the largest public subsidy for a United Soccer League stadium in the country.

It’s an investment city leaders and the team suggest would serve as a catalyst toward other events, projects and developments well beyond soccer.

“We believe that our city is better when it’s united, and coming together in this facility is a major step in ensuring that New Mexico United and so many other things yet to come are going to be here in the future,” Trevisani said.

Rio Grande Credit Union Field at Isotopes Park (Roberto E. Rosales/Journal)

There’s no questioning the team’s “Somos Unidos” messaging has been easily, and abundantly, articulated since 2018 by the team and United’s army of passionate supporters, artists, poets, digital marketing and social media campaigns.

Yet, there is no concrete picture or comparison of what exactly the city — and the voters’ tax dollars — would get should the bond issue pass. But a bit of history and a look at a few other stadium deals may help shed some light.

The game plan

USL Championship is sanctioned as a second-tier, Division II professional league by the U.S. Soccer Federation.

Like so many other fledgling professional sports leagues outside the major sports — National Football League, National Basketball Association, Major League Baseball and National Hockey League (with Major League Soccer, the country’s top level of professional soccer, arguably now on that list) — the USL’s early growth, evolution and team movement over the past decade have brought some skepticism about its long-term viability.

But unlike other leagues, the USL has made no secret that one of its primary strategic initiatives — aimed at growth and long-term stability — is stadium development, even requiring in its franchise agreements that teams be in or at least on the road toward a soccer-specific stadium within three years of joining the league.

“For every major professional sport in the United States and around the world, … the stadium is the foundational piece of their financial structure,” said Justin Papadakis, the USL’s chief operating officer and chief real estate officer. “That is the case in the NFL, NBA, MLB, MLS, and that is the case with the USL. …

“It’s a key strategic priority, and one that we’re executing on. And you can go no further than the fact that USL is going to be the largest stadium builder in the world by building another 30 stadiums over the next five years.”

Included in that figure, which includes stadium renovations and rebuilds, is the expectation that United has a stadium in Albuquerque.

While Papadakis and the USL often do in-depth advance work with government bodies to get stadium deals rolling even before that city has a USL team, New Mexico proved different.

“Every market is a little unique,” Papadakis said. “(The USL often) goes in and structures the stadium deal and then brings in an ownership group in after the fact. In Albuquerque — in New Mexico — we were fortunate that we came across an amazing ownership group at the very beginning of our exploration of the market. And so we passed the baton very early on to the team.”

What also hasn’t happened often is the major publicly financed portions of USL stadiums going to the voters. Many were approved by public bodies without a vote, and often as part of larger revitalization efforts.

“The mayor and the administration’s perspective is pretty straightforward: We think this is an expenditure that is important to take to the voters and to let the citizens weigh in on a decision of this magnitude simply because it’s a lot of money,” Lawrence Rael, the city’s chief operating officer, told the City Council in August.

“I want to let you know that’s our motivation. We will say to you we believe the United has done a great job in their marketing and what they’ve created; they deserve an opportunity to go on and carry on a campaign and educate the community and let the community make a decision. … We believe the citizens have a right to make that decision.”

Debatable impact

Both the Greater Albuquerque Chamber of Commerce and the Hispano Chamber of Commerce publicly support and endorse the bond measure for a new stadium. And both have said their belief is that a new stadium in the Downtown area would serve as an economic booster shot.

That is a message echoed in the $450,000 feasibility study paid for by the city that pointed to several case studies of stadiums across the country being in the middle of areas where revitalization has been, by their assessment, prosperous.

But the role the stadium had in those larger revitalization efforts is debatable.

“At this point, there are innumerable economic studies that show that the economic impact of a sports stadium is nearly, if not entirely, zero,” deMause said. “You know, there are some studies that show it doesn’t exist. There are some studies that show it’s too small to be measured.”

In the ballpark

In its 2019 debut season, United led the league with an announced home crowd of 12,693 per match.

It did so while playing in city-owned Isotopes Park, a baseball stadium. The team and league banked on showing to a soccer-starved market that it could be a draw before asking for a stadium.

That’s also the path Louisville City FC took, first playing for five years in front of fans at Louisville Slugger Field, home to the Triple-A Louisville Bats, from 2015-2019.

With solid attendance figures to point to and years of buildup, the team ownership negotiated what would end up being about $35 million in public financing for the construction of the $75 million Lynn Family Stadium, which is also home to a women’s professional soccer team.

Southwest University Park, El Paso. (Courtesy Ivan Pierre Aguirre/El Paso Locomotive FC)

Louisville, leading the USL Championship this season in average attendance at 9,858 fans per game, has an 11,600-seat stadium that can be expanded to 15,304.

“Like Louisville, we knew we had something really special in New Mexico United and so we wanted to get it going as early as possible,” Papadakis said of the decision to play before a soccer stadium was built. “The baseball stadium had the capacity where we thought we could show the potential for this club … and how Albuquerque and how New Mexico can be one of the top soccer cities and states in the country.”

He said starting in a 5,000-seat stadium, even with sellouts every night, while working toward opening a larger stadium would have risked branding United as a 5,000-seat per game sort of team. Instead, New Mexico and Louisville excelled in their debut seasons, and helped forge their identities, thanks to their baseball stadium beginnings.

Lynn Family Stadium in Louisville, Kentucky (Courtesy Louisville City FC)

“Louisville, it’s just so analogous because they played in a baseball stadium and they were an amazing club on and off the pitch,” Papadakis said. “And now, by working with their city and county partners, and of course with the support of the residents of the city, (they) now have a beautiful venue that is generating significant economic impact and is, without a doubt, a community asset that I think everyone in the community is very, very proud. And you can do the same thing in Albuquerque.”

In Albuquerque, while there are hopes a stadium could jump start other things, the bond measure is only about the stadium.

Lynn Family Stadium in Louisville is part of a reported $200 million revitalization effort in the stadium district. In 2017, before approving spending $30 million to acquire land and set up infrastructure in the area for the stadium, the Louisville Metro Council first secured from the team’s ownership group a commitment of $130 million toward the larger revitalization effort, of which at least $45 million would go toward the stadium.

The stadium got $21.7 million in public funding and $30 million for the land acquisition costs and infrastructure work.

Unlike in Albuquerque, the stadium is owned by the team and, after reimbursing $14.5 million over a 20-year lease term, the land will also be owned by the team.

In Colorado Springs, like Louisville, the team also owns the stadium — the 8,000-seat Weidner Field — which opened earlier this summer. About $13.5 million in public money went to the project.

That money for the stadium was part of a larger 30-year “City of Champions” initiative in which $120.5 million in public assistance, primarily through tax rebates, would help build five sports-centric facilities. The new field is also located adjacent to a development that includes housing owned and developed by the Weidner Apartment Homes company.

Louisville appears to have provided the largest amount of public money to date connected with a USL team as its anchor tenant.

Albuquerque’s proposal would eclipse that, but ownership would stay with the city.

“It’s basically rolling the dice on a stadium that’s much bigger and more expensive than the USL really can justify,” deMause said. “And figuring, ‘Well, if it works out, great. And if it doesn’t work out, we’re not the ones paying for it.'”

Trevisani said the ownership aspect is a major difference compared to stadiums in other cities.

“This is a 180 from (those situations in other cities),” he said. “This is the city owns the stadium. New Mexico United is paying rent, sharing some other revenue streams, and I think, more importantly, guaranteeing $10 million to the project before shovel goes into dirt. That’s hard to find across the country.”

You’re looking at it

Perhaps the best comparison for what the city and United are hoping for isn’t 1,300 miles to the east in Kentucky or up Interstate 25 in Colorado Springs. Trevisani often points to Isotopes Park, which was the setting for Rael and Trevisani’s announcement regarding the new stadium’s Letter of Intent agreement on Sept. 23.

“I really think we’re trying too hard (to find a better comparison),” Trevisani told the Journal. “You’ve got Isotopes Park. The dollars are slightly different — also 20 years later. So you know, that would be the biggest change. But it’s the same city. It’s the same thing.”

Added Papadakis in a mid-September interview, “The city does have a good track record with bonding of sports stadiums.”

Voters approved the 2001 $25 million stadium deal to bring in a Triple-A team to a renovated park at the city-owned site of the old Albuquerque Sports Stadium, which opened in 1969 and was home to the Triple-A Albuquerque Dukes since 1972 and home to the Albuquerque Dodgers for three years prior to that.

The public money for Isotopes Park consisted of a $10 million, voter-approved general obligation bond backed by property taxes plus $15 million in loans, which have been paid down through stadium lease payments/revenue sharing stipulations and a 10% surcharge assessed on stadium sales.

Trevisani said the current bond proposal takes the Isotopes deal as a framework “and I think it actually pushes more chips in” with the team’s upfront $10 million commitment.

According to the Letter of Intent signed by Trevisani and Rael, beyond United’s $10 million initial commitment, it would owe $800,000 annually in “base rent” over 25 years and a minimum of $100,000 per year described in a section of the agreement that otherwise stipulates United can retain revenue from such things as stadium naming rights deals, team events and merchandising, among others.

What’s next?

Mayor Tim Keller has said the city won’t go forward with publicly financing the stadium if voters don’t pass the bond, even though the city has the authority to allocate money toward a stadium without a vote.

For United, the stadium bond is crucial, Trevisani said, but not a make-or-break proposition.

“If it’s a no, then we need to figure out OK, what is next?” Trevisani said. “I haven’t spent a ton of time on (thinking about what happens if the bond fails) because I’m focused on this right now. But we will figure it out. If we gave up every time we heard no, there’d be no team here.”

 

 


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