After the Tacoma City Council voted 8-1 to approve a Letter of Intent that could pave the way to a soccer specific stadium in Central Tacoma, one would have thought the mood among The Soccer Club of Tacoma (TSCOT) would be jubilant. But given the work that still remains, the mood was one of relief, and for good reason.
While the margin is about as convincing as it gets in politics these days — especially when public funding is involved — the resolution merely advances the ball; it doesn’t put it in the back of the net.
“I’m excited that it was 8-1,” said Aaron Artman, President of the Tacoma Rainiers. “I think that sends a good signal to get to work to figure out the deal. To have some progress and something definitive with votes matters.”
Prior to the vote, the city released a revised LOI, along with a couple of amendments which will serve as a blueprint of a deal in the event the parties are able to agree to terms. The feasibility study released back in May 2019 has placed the cost of the stadium at approximately $60 million, and even with the public contributions promised by the city ($15 million) Metro Parks ($7 million), and the private investment from TSCOT ($18.5), there is still money left to find. About $20 million, according to the council.
And make no mistake: That money must be accounted for before shovels go into the ground. As it stands, the amount of public ask on funding has caused some reservations among some on the City Council, especially with some of the other details unresolved.
“For me it’s the number, the sticker shock of having $38.5 million in public money,” said Chris Beale, the lone council member to oppose the resolution. “Some of it is going to get paid back, but it’s part of our bonding capacity. For me, in order for the agreement to seem more palatable, they’ve got to come back with a much larger outlay in cash.”
The LOI does require TSCOT to pay at least $900,000 per year over the proposed 30-year lease term. In addition to paying $2.5 million up front, they are also required to cover all cost overruns and maintenance on the stadium.
That’s not to say that the task ahead is impossible. Far from it in fact. All of the parties seem to want to get to yes, and it’s a project that everyone seems to want. Those that spoke during the public comment period prior to the vote were overwhelmingly in favor of the proposal. Even council member Beale, the loan “no” vote, said he hopes the deal comes back in a way that could allow him to support it. But there is some significant groundwork to be laid before then.
First, the LOI will go before Metro Parks on Monday March 9, the entity which controls much of the land surrounding the stadium. The negotiations between TSCOT have been long and complicated, and if Metro votes against the LOI next week, that could scuttle the deal entirely.
“This is Metro Parks property, it’s not even city property,” said council member John Hines, who supported the resolution. “We need to have Metro Parks board vote on this issue to get some assurances that they can even use the land. This isn’t just public dollars, this is public land too.”
There has been some consternation about how the Metro Parks Board will vote on this agreement; multiple sources described the negotiations as difficult and time-consuming.
“There have been some metro parks commissioners who have been very adamant about [opposing] it, saying ‘absolutely no,’” Beale said. “So we’ll see.”
Assuming Metro Parks authorizes the LOI, TSCOT must work with Metro and the City to identify where the additional $20 million is going to come from. The LOI references funding sources such as New Market Tax Credits and potential funding from the State in the form of credits from the State’s share of local taxes.
“It includes the opportunity to go after New Market Tax Credits and opportunity zone financing structures,” said Sounders General Counsel Maya Mendoza-Extrom. “It is now looking at more complete picture of how we fill that gap.”
Securing funding from the Washington State Legislature may prove to be a tall task, but TSCOT argues that there are significant benefits to that investment.
“The State has to play a part in this,” Mendoza-Extrom said. “We do think this is a potential training site venue for the World Cup (2026), and that makes this an investment of statewide significance.
“The State has used mechanisms to fund both Century Link Field and T-Mobile Park,” Mendoza-Extrom added. “Tacoma’s asking not for an equivalent level of tax dollars, but something. Those are really meaningful mechanisms are small in terms of how the affect average person in the State of Washington but have potentially massive impact on putting a stadium together.”
The other component of this deal that is central to the stadium plan is the mixed-use development. Multicare has committed to investments of well over $200 million to construct a sports rehabilitation facility and sports complex, and there is talk of affordable housing and other retail developments — projects that if realized would add significant value and taxes to the City
“If this gets done, we’re spending $200-240 million in private money to do the development to do the mixed-use retail and to transform Tacoma,” Artman said. “If we don’t do this project, the City will earn $1 per year for the next 30 years (the current rate of return on the land).
That said, the details on the mixed use development are not spelled out in the LOI, and it could be difficult to put such a complex deal together by the deadline TSCOT is hoping to meet to start construction in Fall 2020. “Our intent is still to be able to open the stadium by 2022, but that’s going to require shovels in the ground by October. We have a pretty short timeline to figure out if this works.”
One option could be to divide the stadium and mixed use projects, but leaving the mixed-use project unresolved could cause issues in getting a deal approved.
“The idea of having mixed use where restaurant, shopping, where more dollars are generated, that’s the selling point,” Beale said.
Given the proposed return, Artman believes that the investment by the City will more than pay for itself.
“If we do the project, there is going to be hundreds of millions of dollars in investment and tax revenue,” Artman said. “I think that balances out the $15 million the City is putting in, the $7 (million) Parks is putting in. The return on that is $250 of private investment, not to mention tax revenue of somewhere between $40-50 million over the first 30 years.”