EDITOR’S NOTE: This story has been updated to reflect actions taken by the Metro Council budget committee. An earlier version focused only on the labor and economic development committee, which did not take any action on the matter Tuesday.
UPDATE: The city’s proposal to spend $30 million toward a $200 million soccer stadium district cleared its first hurdle Tuesday evening when the Metro Council’s budget committee approved the deal.
Some city leaders, including Mayor Greg Fischer, have proposed buying 40 acres of land in Butchertown for $24.2 million, spending $800,000 on cleanup and $5 million more on infrastructure. The city then wants to lease 15 acres to Louisville City FC for $14.5 million over 20 years. The club plans to build a privately funded $50 million stadium on the land, with the remainder to house $130 million in private hotel, restaurant and office developments.
The budget committee approved the deal on a 4-1 vote, with two committee members voting “present.”
Before the full council votes on the matter, the labor and economic development committee on Thursday plans to vote on how to proceed with a request for a state tax increment financing district, a key component for the club’s owners, which also would have to be approved by the state.
The club plays its home games at Slugger Field and has identified building its own stadium as the top priority to assure the club’s long-term viability. The second-division club has lost money, even though it has achieved success on and off the field in its three seasons, finishing second or first in its conference each year and welcoming more fans each season.
Jeff Mosley, Louisville’s director of economic growth and innovation, told the council’s Labor and Economic Development Committee that the project would generate significant economic benefits, including 1,400 construction jobs, 1,700 jobs on site, while eliminating a brownfield.
In addition, Mosley said that a soccer stadium district would add an amenity that would allow the city to better attract and retain millennial talent needed to support Louisville’s continued economic growth.
The city projects that its $30 million bond for the land would cost it $42 million including interest. Mosely said the city estimates it would gain $14.5 from the club in lease/purchase payments and $12 million in additional property taxes.
Mosley also said that the city’s potential downside is small.
“If the deal goes south … we have the land in our pocket,” he said.
Mike Mountjoy, one of the club’s owners, said that building the stadium was critical to the club’s future both in finances and league requirements.
“We lose money every time we play,” he said.
Also, he said, if the club does not have a stadium by 2020, it won’t be able to remain a member of the second-division United Soccer League.
Mountjoy said that before he got involved in LouCity, he did not care about soccer, but be believed that soccer’s popularity in the country would continue to grow, in part because of the declining participation in football and the growing international population locally and nationally.
Owners have had discussions with potential tenants for office space and restaurants, he said, and “they all want in.”
The owners believe that with help from the city and state, revenue can cover the debt service on the stadium and other developments and generate “some level of return,” Mountjoy said.
He said he envisions the stadium as a “jewel” in the center of a new development that will benefit the city financially, through property and payroll taxes, and keep more young people from leaving Louisville.
Tuesday afternoon, after an hourlong meeting, a Metro Council committee on Tuesday tabled discussions on the proposed $200 million soccer stadium district development for two weeks to provide the city more time to answer questions about items including the deal’s prudence and wages.
In that meeting, Jordan Harris, co-executive director and founder of the Louisville-based research organization the Pegasus Institute, questioned whether the city’s plan was prudent, given that Louisville had identified tens of millions of dollars in deferred maintenance on basic infrastructure, including roads and sidewalks.
Harris also said that the city was making a lot of assumptions about the return on the land investment and had not provided any origins for the estimates of the remediation cost or the land value. A lot of questions remain, he said, and he urged the council to take more time to solicit public input.
Councilwoman Barbara Sexton Smith, D-4, however, said that Harris’ questions have been answered and that an overwhelming number of residents from all over the city have, for months, have told her that they support the project.
The greatest risk to the city, she said, is to pass up this project.
Louisville resident Carter Wright, a LouCity supporter and member of Jobs With Justice, a workers’ rights organization, urged the council to make sure that jobs that were created as a result of the stadium district pay living wages.
Wright said jobs at stadiums often pay wages that are so low that workers qualify for Medicaid, food stamps and other public assistance, which places a financial burden on the rest of the local taxpayers.
He said that the council should look to Milwaukee, where city officials, Milwaukee Bucks leaders, union members and other stakeholders adopted a model that requires jobs in the arena district to pay $15 per hour by 2023 and to make a significant portion of the jobs available to people from the poorest parts of the city.
Some council members also had questions for city and club officials, but because of time constraints, the committee tabled the discussion and asked Mosely to provide answers to some questions in writing. That committee will hold a special meeting on Thursday.
Mosely said he would be happy to do so, but he also reminded the committee that time was of the essence because the city’s options on the land expire on Nov. 11.
The project on Tuesday also received support from Greater Louisville Inc., the local chamber of commerce.
“The soccer district project, along with others recently announced, is an important step towards revitalization of neglected areas of our city while attracting new people, businesses, and investment to greater Louisville,” GLI President and CEO Kent Oyler said in a press release.