Columns & Blogs

Soccer stadium proposal hinges on tax money it was already denied

It’s easy to fall in love with the idea of a stadium near downtown Raleigh, even if only as a concert venue, since this market’s interest in MLS continues to be unrequited. It makes a lot of sense.

So why does every proposal Stephen Malik makes to build a stadium require moving the political heavens and earth?

Two years after Malik unveiled dramatic plans to build a soccer stadium for North Carolina FC and the NC Courage on state-owned land north of the capital – with a predictable lack of cooperation from the state – the soccer clubs’ owner held another press conference Tuesday to unveil dramatic plans for a stadium as the centerpiece of a $2 billion John Kane development south of downtown and north of I-40.

While “Never go in against a Kane when real estate is on the line” may be one of the classic blunders, this second proposal requires no less of a political sleight of hand than the first.

The stadium is predicated on $13 million per year of hotel tax money from a city-county fund earmarked for tourism-focused developments like this one. But last week, after an 18-month process, the city and county managers issued their recommendations for the next cycle of disbursements, $55 million per year. Malik’s stadium proposal was kicked to a second tier of “medium projects” competing against Marbles Kids Museum, the North Carolina Museum of Art and William Peace University for about $7 million a year.

Tuesday’s press conference, which offered scant few details about the stadium itself and mentioned MLS only in response to a question, was essentially the kickoff of a lobbying campaign to get the Raleigh City Council and Wake County Board of Commissioners to overrule their managers’ recommendations in August – a sort-of political VAR, to use soccer’s term for instant replay.

What wasn’t mentioned was that any money that goes to the stadium is going to have to come from the pools of money allocated by statute to sporting venues and the convention center. In last week’s recommendations, PNC Arena was given $8 million a year to fund $115 million in badly needed updates and $2.4 million a year was set aside for a new small-scale indoor sports facility, one of the Greater Raleigh Convention and Visitor Bureau’s top priorities.

Malik acknowledged Tuesday that he wants to overrule those recommendations and steer money to his stadium instead by politically mobilizing, among other constituents, NCFC’s massive youth-soccer arm on behalf of his proposal.

downtownsouth03.jpg
A rendering of Downtown South, a proposed 55 acres of development south of downtown Raleigh that includes a 20,000-seat stadium that would be surrounded by nearly $2 billion worth of private development. Gensler

“The staff has a very difficult challenge in that the city owns the convention center, the county owns PNC, there’s a strong desire to support the status quo,” Malik said. “For a really visionary project, that’s going to require the leadership of the city council and county commissioners. We aren’t coming in at the end, asking to change the process. We’ve been involved in the process. We’ve been talking to the city council and county commissioners all along.”

While PNC and the convention center were the original intended beneficiaries of the hotel tax, and indeed wouldn’t exist without it, a region’s priorities can and do change. But Malik’s plan went through the process and wasn’t recommended. What was announced Tuesday essentially amounts to an end run, less a stadium announcement than campaign rally, right down to softball questions from friendly politicians in the front row.

Meanwhile, the Centennial Authority, the city-county-state body that actually owns PNC, is beginning lease-extension negotiations with Hurricanes owner Tom Dundon and the renovations are a critical part of that process, updating an arena that looks very much like it was built in the ‘90s. The authority asked for more than $200 million, got about half that and scheduled an emergency meeting Thursday to prepare a response. It may now have to launch a lobbying campaign as well.

“The two managers generally have their recommendations closely followed by the two government bodies,” authority chairman Tom McCormick said Tuesday. “I know Steve has been very active. I hope we don’t have to do (any lobbying). I hoped we could have had a more straightforward process, but it didn’t work out that way.”

As for MLS, it continues to make googly eyes at Charlotte and billionaire Carolina Panthers owner David Tepper while Raleigh fades from the radar. The original pitch for the stadium was directly downtown as part of an MLS expansion bid; the pitch now is a 20,000-seat multi-use venue a half-hour walk from downtown (albeit on a planned future bus-rapid-transit corridor) for soccer teams that would have a hard time filling it.

Kane, curiously, said the entire development would not go ahead without the $13 million a year from the city and county for the stadium, a pretty flimsy hinge for a $2 billion project that puts more than a whiff of a financial threat behind all this mustering of political capital. There has to be a better way to build a stadium that just about everyone agrees would be an asset than this.

Sports columnist Luke DeCock has covered the Summer Olympics, the Final Four, the Super Bowl and the Carolina Hurricanes’ Stanley Cup. He joined The News & Observer in 2000 to cover the Hurricanes and the NHL before becoming a columnist in 2008. A native of Evanston, Ill., he graduated from the University of Pennsylvania and has won multiple national and state awards for his columns and feature writing while twice being named North Carolina Sportswriter of the Year.
  Comments