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Request for county funding for MLS stadium allows for ‘alternative locations in greater downtown’ Raleigh

February 1, 2019
Architecture firm Gensler designed the proposed mixed-use stadium complex in downtown Raleigh that the North Carolina Football Club is pitching for an MLS expansion team (Courtesy of Gensler).

It has been two years since Steve Malik and the North Carolina Football Club submitted their bid for a Major League Soccer expansion team, and eighteen months since Malik and NCFC unveiled plans for a soccer stadium and entertainment complex in downtown Raleigh. Over that span, MLS has awarded expansion teams to Nashville, Cincinnati and Austin, Texas. Meanwhile, Raleigh’s MLS bid and stadium effort have subsisted in seeming obscurity, a conspicuous silence that suggested interia.

Beyond the lack of public pronouncements, Raleigh’s MLS bid is alive and continues to toil away.

Earlier this month, North Carolina FC was one of eight groups to submit a plan after Wake County officially requested information about future hospitality projects that could be funded by the county’s Room Occupancy and Prepared Food and Beverage Taxes. Those taxes are levied expressly to support arts, culture, sports and convention facilities in Wake County. The request was part of Wake County’s required review of the financing and capital maintenance plans for the Raleigh Convention Center and PNC Arena, in order to “collect information on planned or potential projects that may request use of interlocal funds within the fiscal years of 2019 through 2025 and may exceed $20 million in total project costs.”

The five-page document that North Carolina FC submitted to the county sheds added and updated light on the status of the downtown stadium project. NCFC reiterates a proposed 22,000-seat Downtown and Entertainment Sports Center (DESC) whose primary tenants would be a MLS team for NCFC and the NC Courage’s NWSL team. The reply cites the affiliation with the NCFC Youth soccer club and the DESC as a possible location for tournament series events. It also forecasts that the DESC “will host numerous other sports, entertainment, public, and civic events above and beyond pro soccer,” the sort of multi-use cited with approval in the Destination Strategic Plan commissioned by the Greater Raleigh Convention and Visitors Bureau and published last August.

North Carolina FC requests interlocal funds of $11 million per year for 30 years beginning in fiscal year 2022. Those funds would go towards annual maintenance of the DESC and debt service of the estimated $150 million construction costs. As part of its eventual lease agreement for the DESC, NCFC would guarantee to cover any operating losses for the facility. The RFI response contends that the DESC will generate state and city taxes that will greatly exceed the funding request, including tens of millions of interlocal taxes.

North Carolina FC and Kane Realty, the organizers of the stadium project, recommend the establishment of an Entertainment and Sports Center Authority to manage the DESC, similar in concept to the Centennial Authority and its management of PNC Arena.

It remains far from assured that North Carolina FC will secure a MLS expansion team. Still, NCFC hopes this governmental buy-in will be the first domino leading to securing a stadium site and additional investors for stadium construction and team operations. In their RFI reply, NCFC asserts that team owner Malik “has an ownership group committed to equity funding of the project. Once funding and financing for the DESC are confirmed, as well as needed permits and approvals, approximately two years will be required to construct and open the DESC.”

When Malik announced his initial stadium plans in July 2017, the preferred site for the project was the state-owned Halifax Mall on the north end of downtown Raleigh. It appears Halifax Mall remains the desired location.

Nonetheless, NCFC’s RFI response states the “DESC is currently proposed for Downtown Raleigh, including the north end of downtown and several alternative locations in the greater downtown area.”

Indeed, according to reliable sources, Malik and MLS Commissioner Don Garber surveyed several possible stadium sites last October when Garber visited the Triangle in conjunction with the Concacaf Women’s Championship in Cary.

Major League Soccer’s last three expansion invitations to Nashville, Cincinnati and Austin leaves one expansion slot available short of the league’s stated goal of 28 markets. However, during his annual state of the league address last December, Garber opened the door for possible expansion beyond 28 teams.

“We will grant the 28th team and make that decision sometime in the next 12 months, and then we’re going to have to decide if we want to go forward beyond 28 teams,” Garber said. “I don’t anticipate an announcement, but there’s no doubt in my mind we can support having more than 28 teams in Major League Soccer.”

Wake County’s RFI is expressly for information and planning purposes. The county’s anticipated timeline is that responses will be reviewed and considered in light of available funding over the next couple of months. If funding is deemed available, the county could conduct a consideration of new investments from March through May, which may include a formal Request for Proposal (RFP) process to be detailed at a later date.

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