MLS expansion latest: Fallout from St. Louis's stadium vote defeat, more updates
- St. Louis's hopes evaporate after Tuesday night's vote, while San Diego is orchestrating a public vote of its own. Plus, info on David Beckham, MLS's timeline and updates from Charlotte and Detroit.
There was one certainty in this convoluted, whirlwind MLS expansion race: if St. Louis could build a stadium, it would get a team. The country’s 20th-largest market lost its NFL franchise and had a renowned, deep-seated passion for soccer. MLS had wanted to be there for years, was happy with the prospective ownership group and proposed stadium plan and was ready to say ‘yes’ once the latter was finalized.
The hurdle for the St. Louis investors, however, is that they needed $60 million in city funding to build their stadium next to Union Station. That required a vote, and elections are never certain. They made their case, held rallies, conducted a social media campaign, promised a minimum $255 million investment, scholarships and even received endorsements from the mayor and the city’s police union. It wasn’t enough. The proposal to funnel the proceeds from a half-cent business use tax toward the stadium was defeated 53%-47%, or by about 3,000 votes.
The outcome is neither a repudiation of soccer in St. Louis or of MLS. There were two primary reasons for the defeat. The first is that voters who felt burned by the Rams departure and the money still owed on what is now called The Dome at America’s Center apparently weren’t ready to believe the claims, which were seconded by Mayor Francis Slay, that the soccer stadium would have a net positive economic impact.
The second reason is that a significant part of St. Louis’s soccer support comes from the suburbs, where youth clubs, ethnic enclaves, churches and schools have anchored the sport for generations. Those were the fans who’d be coming into the city for MLS games. But they were ineligible to vote. Tuesday’s election was decided by 58,000 voters in a metro area of 2.8 million. It was city money on the table, however, so fair is fair. The result doesn’t mean St. Louis isn’t a soccer town. It just won’t be an MLS town.
In a statement, investor Jim Kavanaugh wasn’t ready to declare the bid definitively dead. But unless something totally unexpected occurs, MLS won’t be going to St. Louis.
“Our ownership group was clear from the start that without a successful passage of Propositions 1 and 2, there would be no path forward to see this project through and bring Major League Soccer to St. Louis,” said Kavanaugh, who owns the USL’s St. Louis FC and was partnering with former Bain Capital managing director Paul Edgerley on the bid. “While this is likely the final stage of our journey, we owe it to ourselves and to the thousands of people who believed in this effort, and voted for Proposition 2, to step back for a day or two before making an official announcement. In the short term, we will be thanking supporters and volunteers, both within the city and throughout the region.”
So what now? For St. Louis, it’s USL soccer in suburban Fenton for the foreseeable future. For MLS, Tuesday’s result is a disappointment but not a setback. There still are 11 groups/cities lining up outside trying to get in, and although they can’t match St. Louis’s soccer history, some have wealthier investors, some come from larger markets and some are requesting no public money. The league will have no trouble filling its four expansion slots.
For bidders, their chances obviously increased with a shoo-in now out of the way. The cities that might benefit most from Tuesday’s result are Cincinnati, Detroit, Indianapolis and Nashville. MLS seeks a national footprint and if it wants greater representation in the Midwest and a chance to enhance the weaker rivalries in that part of the country, it now must look beyond St. Louis. The league may not have chosen two markets there.
Elsewhere on the expansion landscape:
San Diego's MLS expansion bid opts to put stadium deal proposal to public vote
St. Louis had no choice but to submit their proposal to a public referendum. San Diego didn’t necessarily have to go that route. After collecting the required number of signatures during a campaign this month, the bid fronted by local private equity investor Mike Stone (and including Padres managing partner Peter Seidler and new San Diego resident Landon Donovan) could have pushed the city council to decide on its own whether to permit the MLS hopefuls to build their arena on the Qualcomm Stadium site.
Instead, SF Investors and SoccerCity SD want their proposal placed on the November ballot.
“We think this vote will reflect in no uncertain terms the taxpayers’ overwhelming support for our plan, which will turn this city’s liability into a massive city asset with no taxpayer dollars,” Stone said at a Tuesday news conference.
The SoccerCity group initially was reluctant to put their proposal to a vote because it feared the delay would ruin its chance of being awarded one of the two MLS spots awarded this year. But that’s no longer an issue. FS Investors told San Diego media that MLS won’t make its decision until after the Nov. 7 vote. While that certainly doesn’t contradict the league’s timeline—it always has said its deadline is the end of 2017—it confirms that no decision will come before then. With St. Louis’s exit, MLS will need all the time it can get to evaluate other bids.
SoccerCity is confident its proposal will pass. Polling has been decidedly in its favor and it’s asking for no public funding, as Stone indicated. The group wants to purchase the 166-acre Mission Valley property, which is city-owned, at market value. It then will demolish Qualcomm, split the cost of the new $200 million stadium with San Diego State, add mixed-use development and a 55-acre riverfront park and still leave space for a potential NFL stadium if that league opts to return.
San Diego investors have told SI.com that they expect opposition from rival developers and perhaps environmental groups that prefer more parkland.
Charlotte, MLS officials have met, but city hesitant on rushing stadium funding vote
Charlotte investor Marcus Smith would have been happy with the opportunity to put his proposal to a vote, but that didn’t happen.
In late January, the city council opted not to make a decision on a plan that called for Smith—the Charlotte Motor Speedway CEO—to foot half the cost of a $175 million stadium in Elizabeth. The remainder would be split by Mecklenburg County and the city of Charlotte through hotel tax revenue earmarked for tourism projects. The county said ‘yes.’ The city, which spent millions on the Hornets’ arena and on upgrades to the Panthers’ stadium, wasn’t ready to move forward or consider the proposal.
“It’s been so rushed,” Charlotte Mayor Jennifer Roberts told reporters in January. “People feel there are still a lot of unanswered questions. It doesn’t mean we don’t ever want to do soccer. It’s not responsible to the taxpayers when we don’t have all the answers to their questions.”
It’s been quiet since then. Is the Charlotte bid dead? Not quite. SI.com understands that Smith met with MLS executives last month in Atlanta, and that the league is considering a trip to Charlotte in order to meet with city officials, business leaders and media. That indicates interest remains on both sides.
Smith and his partners did not return an email requesting comment.
Detroit MLS group's study favors soccer stadium over jail at proposed downtown site
MLS hopefuls in Detroit are also waiting on a decision. The stadium plan put forward by NBA owners Dan Gilbert and Tom Gores is part of a $1.88 billion proposal. It hinges on constructing a new $420 million jail and justice center for the city in exchange for the piece of downtown property on which a half-finished jail currently sits. And it requires Wayne County’s approval.
In January, the Detroit Free Press reported that the county was targeting May for a ruling. Last month, the principal of Gilbert’s Rock Ventures, Matt Cullen, told The Detroit News that the group is responding to queries from the county.
“We owe them some updated information, kind of in the May-June time frame. And I would expect we’ll have a lot of clarity for them by that time,” Cullen said. “They’ll want to know, at that time, what control we have over the site [for the new jail].”
On Tuesday, Rock Ventures released a study conducted by the University of Michigan’s Center for Sport & Policy, that claims the proposed stadium and mixed-use development on the downtown site would generate a $2.39 billion economic impact and create 2,106 permanent jobs. In contrast, simply completing the half-finished jail would create only $352 million in economic impact, the study said. The construction phase on the two sites alone would result in an estimated $51.9 million in tax revenue for Michigan and the city of Detroit. The permanent jobs would add an additional $6.4 million, and property taxes eventually would reach $46.7 million annually.
Rock Ventures commissioned the study. The only public funds Gilbert and Gores are requesting are the $300 million that would have been spent anyway on completing the downtown jail.
For Beckham, it's Miami or bust; Las Vegas not an alternative option under his deal
Despite three years of frustration and failure at three potential stadium sites (plus lengthy delays at a proposed fourth), MLS still hasn’t given up on David Beckham and Miami. Representatives from both sides continue to talk. Speculation ramped up last month, however, when the Oakland Raiders’ plan to move to Las Vegas was approved by the NFL. Beckham made in appearance in Vegas last April to tout the construction of a new stadium there and said, “To bring a great organization like the Raiders is incredible, but it’s bigger than that. It’s about the MLS coming here. It’s about bringing in the biggest European teams like Manchester United.”
It’s no coincidence that Beckham has a business relationship with Las Vegas Sands, whose chairman, Sheldon Adelson, was involved in the initial Raiders stadium effort. He’s since pulled out, however, leaving Beckham’s connection to Vegas more tenuous. Nevertheless, Beckham’s troubles raised questions concerning the future of the franchise he’s already purchased from the league. Could he abandon Miami for Las Vegas?
The answer is no, unless he were to work out an entirely new deal with the league.
The discounted franchise he purchased under the terms of his initial playing contract is valid only for the city he and MLS agreed upon. That’s Miami. If Beckham wants to pull out, it’ll cost him dearly. In addition, he’d have to want to go to a city that interests MLS, and there’s no reason to conclude Vegas is such a place. It’s barely a top-30 market (it ranks 29th in population, just below Cincinnati), has no history of supporting major pro sports and now suddenly will be saturated by NFL and NHL teams.
MLS has better options, meaning Beckham’s best chance to become an owner remains in Miami. MLS commissioner Don Garber has said there’s a deadline, but he hasn’t offered specifics. The league’s board of governors is scheduled to meet April 24 in Colorado Springs. Expansion is always on the agenda. A few days ago, MLS probably figured it had three teams to award. Now it’s four. And if Beckham can’t work things out, the board may decide it’s five.
Beckham's group released yet another optimistic statement at the end of February:
"Miami Beckham United is 100 percent committed to Miami, and we will continue working with Major League Soccer and Commissioner Garber as we finalize the launch of our world-class club. We have long viewed South Florida as prime territory for MLS expansion, and we see a tremendous opportunity to build our club's brand in this market while attracting top talent from around the world. We're making progress toward our goal of fielding a team in 2019, and we appreciate the strong support of our fans as our kick-off draws closer."