Plans for a local professional soccer stadium garnered support from a second Metro Council committee Thursday, clearing the way for the proposal to go to the full council next week.
The council’s labor and economic development committee, after a two-hour meeting, voted 4-1 to ask the state to create a tax increment financing district, which would funnel some of the new state taxes generated on the property toward paying off the privately financed stadium.
Owners of the second-division Louisville City FC plan to build a $50 million, 10,000-seat stadium for an eventual bid to join Major League Soccer. The city has proposed issuing $30 million in bonds to buy 40 acres in Butchertown and lease/sell 12 acres to the club for $14.5 million over 20 years. Club and city leaders expect the stadium to spur additional private investments of about $130 million for hotels, restaurants and offices.
Club leaders have identified the TIF as a critical step toward making the soccer stadium district a reality. Club officials hope the district will generate about $200 million in state taxes, of which $30 million would support the planned private developments on the property.
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 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.
Councilwoman Julie Denton, R-19, voted against the creation of the TIF because she said she had additional questions that had not yet been answered and she worried about the city’s fiscal health given other significant challenges ranging from road repairs to pensions.
Some of her Metro Council colleagues who sat in on the meeting — though they were not voting members on the committee — said they shared her concerns. Councilman Kevin Kramer, R-11, said he wondered why city and club officials were pushing so hard to get the deal done now, when they could easily delay any votes for two weeks to give council members more time to analyze the proposal.
“I don’t know why the rush?” Kramer said. “What are we afraid of?”
However, some council members also voiced strong support for the project.
Councilman Brent Ackerson, D-26, said that while he usually criticized TIF deals and giveaways to the wealthy, he said the pursuit of a professional sports franchise for Louisville represents a “once-in-a-lifetime opportunity.”
While some questions remained, and every opportunity comes with some risk, Ackerson said that the return on the city’s investment, both in dollars and prestige would be “huge” and would finally allow the city to compare with some of its regional rivals, including Cincinnati, Nashville and Indianapolis.
The budget committee on Tuesday had approved issuing $30 million in bonds to purchase the 40 acres of land and to pay for environmental cleanup and infrastructure, such as roads and sidewalks. Including interest, the city expects the land to cost $42 million.
The city said it expected additional developments on the site to generate about $12 million in property taxes over 20 years, meaning it would leverage a net investment of about $15.5 million to spur private developments of $130 million.
Jeff Mosely, the city’s director of economic growth and innovation, told council members Thursday that an appraisal estimated the value of the land at about $25 million. Council members and Louisville-based think tank the Pegasus Group had questioned why the city would agree to a purchase price without an official appraisal.
Mosley said Thursday that the city had worked closely with John Hollenbach, a principal with real estate development company Hollenbach-Oakley, who had estimated the land value at about $25 million. Hollenbach also is one of the soccer club’s owners.
The full Metro Council is expected to take up the bond and TIF issues at its Oct. 12 meeting. Mosley has said that time is of the essence because the city’s options on the land expire on Nov. 10.
Mike Mountjoy, one of the club’s owners, told Insider after Thursday’s meeting that he hoped the club leaders had been able to answer all of the council members’ questions. If not, he said, they have his cellphone number.
“We don’t want a question not to be answered,” he said. “We’re not trying to hide a thing.”
The soccer club on Thursday also released a TIF impact analysis, according to which the project would support nearly 2,500 jobs statewide, generate labor income of about $1.8 billion over 20 years and create about $261.4 million in state and local tax revenue. The analysis was commissioned by the club and produced by Commonwealth Economics.