Louisville FC — build it, or they may leave

Mar 1, 2017 at 12:34 pm
Louisville City FC

[April 12, 2017 Update] So the word is out, and Butchertown is where Louisville City FC wants to build its 10,000-seat stadium on land around the former Challenger Lifts Inc. site at 200 Cabel St. But why does the team want to move out of the Bats stadium into its own, and who will pay for a stadium, which could cost as much as $50 million? Ultimately, the question will be how much will the city of Louisville contribute? In a statement released Wednesday, Mayor Greg Fischer said “Louisville City FC ownership group must, for example, commit significant private dollars to the private-public project before the city would commit taxpayer dollars.” "The future of this project depends on Louisville City FC gathering the necessary significant private capital and appropriate state assistance to make this project a reality,” Fischer said. “When those conditions are met, we will work with Metro Council to move the project forward.” To read more about the issues and event that led to Louisville City FC’s push for a new stadium, read LEO Weekly’s past story:

Louisville City FC, the city’s professional soccer team, has been a success on the field and off in its two seasons.

But the field is a problem.

LouCity, which plays in the United Soccer League (USL), shares Louisville Slugger Field with the Louisville Bats minor-league baseball team. It’s like crashing on your brother’s lumpy couch for two years while paying the rent, utilities and Wi-Fi and cleaning up the dog crap in the backyard.

Worse, the team is losing money there — a lot of money —  and it will be booted from the USL if it’s not on track to move into a soccer-specific stadium by 2020.

City officials are working with the club to select and acquire a site for a soccer stadium in or near downtown Louisville. The team is expected to announce that site soon. But it is unclear how much, if anything, the city would contribute to the cost of a stadium, which could run $30 million to $50 million, according to a study. Any city funding would have to be approved by Metro Council, and it could face opposition from taxpayers, who may not be enamored of private businesses getting public money.

“We’re losing money until we get into a stadium,” said Jonathan Lintner, LouCity’s director of media relations. “Our owners aren’t saying ‘revenue’ like, ‘How much will we make?’ It’s how much can we stand to lose?”

So what’s so bad about Slugger Field?

Nothing, if you are the Louisville Bats. The city paid $25 million to build it in 2000 to attract the Triple-A affiliate of the Cincinnati Reds, and it’s one of the best minor-league parks in the country.

However, it was not built to host soccer games, and the Bats’ contract has them swinging the big stick.

The soccer team can’t put a schedule together until after the Bats select its dates. LouCity doesn’t receive any money, or have any say, in concessions and doesn’t share in the revenue from the luxury suites and advertising signs sold by the Bats.

LouCity also foots the bill to convert the baseball field to a smaller-than-preferred soccer pitch at 105 yards by 75 yards.

Despite that, LouCity has been one of the most successful teams in the USL in its two seasons. The club averaged 7,218 fans last season, third in the 29-team league; has advanced deep in the playoffs; and has the league’s best record over two years.

However, the team had operating losses of about $700,000 in 2015 and a reported $1 million in 2016, and the USL is requiring teams play in a soccer-specific stadium by 2020. So the team can’t survive or stay at Slugger Field.

”A stadium would be so huge from a visibility standpoint,” LouCity’s Lintner said. ”We go on the road to places that seat 6,000 or 7,000 ... The fans are right on top of the field. It feels like you’re playing in a high school basketball gym.”

In January, LouCity officials announced that architecture firm HOK (responsible for the Mercedes-Benz Stadium in Atlanta and a new stadium for FC Barcelona) will design a stadium that would seat 10,000 and could be expanded to 20,000. LouCity officials said they have settled on a site in the “urban core” of Louisville, but have said little else.

click to enlarge Louisville City FC
Credit: Em Dash Photography
Louisville City FC vs. Rochester at Slugger Field

A stadium of its own

LouCity had inquired about relocating in Southern Indiana, Insider Louisville reported in January. Prominently mentioned was New Albany. That’s where LouCity chairman John Neace’s business, Neace Ventures, is located. Neace canceled a scheduled interview with LEO Weekly because the team wants to announce stadium plans before commenting further.

Louisville would prefer Louisville City FC stay in town.

“Well, hell yes,” said Chris Poynter, director of communications for Louisville Mayor Greg Fischer.

Poynter said that it would take time to work through any funding proposals for a new stadium, but it would require “substantial private financial resources.”

Metro Government spent $75,000 on a feasibility study by Conventions, Sports & Leisure International and Legends released last summer. It paints a mostly-positive picture of a new stadium that would include public financing.

CSL’s study shows several hypothetical scenarios to finance a soccer stadium. All of CSL’s funding scenarios include $6 million in tax increment financing and $6.5 million to $18.5 million in “Metro General Funds/Other Sources.”

It envisions a positive cash flow for a stadium that would hold about 29 events a year — LouCity regular-season, playoff and exhibition games plus concerts and other events. It estimates the team would profit $400,000 plus per season.

It also estimates that, over 20 years, the stadium would generate $195 million in new spending from construction and operation of the stadium and would net more than 2,100 new jobs — directly or indirectly.

CSL, however, is not in the business of underselling the potential of new stadiums.

In 2013, CSL presented a favorable report on the economic impact of the Angels baseball team for Anaheim, California. CSL is a subsidiary of Legends Hospitality Holding Company. A few days later, Legends Hospitality, another Legends subsidiary, was awarded the Angels’ concession contract. Legends is also co-owned in part by the Dallas Cowboys and New York Yankees.

Louisville City FC: Numbers At A Glance
Louisville City FC: Numbers At A Glance

Ask an expert

Stadiums are “consumption items” that don’t lead to positive growth, according to Jose Fernandez, an associate professor of economics at UofL. They are built and often abandoned for newer, nicer stadiums.

The decision to build a stadium raises myriad complex questions, he said. “How is it going to be cost effective?” Fernandez said. “Who else would be renting it to hold events there? And how does that affect competition for those events from other facilities in the area?”

He pointed to a 2011 study that appeared in the Journal of Sports Economics on the impact of minor-league baseball stadiums in cities. It showed that teams and stadiums at best slightly increased per capita income by a range of $67 to $202 per person, depending on the level of team and stadium.

The study also found no significant negative income effects tied to team or stadium type, meaning that non-positive, measurable impacts were neutral and not statistically significant. And the study cautions that “no cost-benefit analysis was conducted, so there is no implication that cities should invest in AA or rookie stadiums.” Most academic research in this area had shown “nonpositive effects” on income, employment, sales tax revenues and spending, the study says.

Most city officials want to build stadiums and support professional teams because they believe they attract new employers, Fernandez said. “And new employers hire new employees,” he said. “It’s not for the current residents.”

Fernandez said the fairest way to help fund a stadium would be for the city to float a bond and allow investors to choose whether to participate.

“If you are a fan, of course you want someone else to subsidize the stadium,” Fernandez said, pointing out that using public funds means people who don’t care for soccer or don’t go downtown would also help pay for a new stadium.

A look at how near-by stadiums were funded.
A look at how near-by stadiums were funded.

Public funding paranoia

The team’s fans are confident that Neace, a venture capitalist, and the team’s ownership group can see through a deal for a new stadium. But they fear that the bad taste left by the KFC Yum! Center’s financial struggles could poison support for public financing of a stadium.

“If money is going to come from public funds, it makes you anxious,” said Tom Farmer, president of The Coopers, a Louisville City FC support group.

LouCity officials believe that a new stadium would help the team really take off with fans.

Take Farmer. He is the kind of fan that front offices dream of. He grew up in Powell County, Kentucky, had virtually no exposure to soccer and considers himself a fanatical UofL basketball fan. But he attended a LouCity game in 2015 and loved the atmosphere. Two years later and he is president of the fan club.

He loves the team, the league and the nearly-instant rivalries with clubs in Cincinnati and St. Louis. He’s not all that concerned whether the team joins Major League Soccer, the top professional league in the United States.

LouCity officials had considered putting in an MLS expansion bid in January but held back for perhaps a later round of expansion.

“Honestly, we just want the stadium,” Farmer said. “If it’s in Butchertown or West Broadway or the site of the old Louisville Gardens, we’d be happy wherever it is.”

One place it won’t be is at UofL.

The university’s Mark & Cindy Lynn Soccer Stadium, which opened in 2014, meets LouCity’s desires of being near downtown and visible from a highway. The field sits between Floyd Street and I-65 on the Belknap Campus. It seats 5,300, but Kenny Klein, UofL’s sports information director, said there are no discussions about increasing the capacity or sharing with LouCity. Louisville’s men’s and women’s soccer teams play there now.

“It would probably be too much of a demand on the surface,” Klein said about adding another tenant.

click to enlarge Louisville City FC vs. Charlotte - Credit: Em Dash Photography
Credit: Em Dash Photography
Louisville City FC vs. Charlotte

Slippery Slugger Field

LouCity officials, players and fans believe a new stadium could solve a lot of problems.

First is the financial situation. The city reported the team lost $700,000 its first year. Neace told Insider Louisville the team lost $1 million in 2016, though a team spokesman would not confirm that figure.

In addition to the revenue streams denied at Slugger Field, LouCity also struggles to convince pro teams and international teams to come to Louisville to play exhibition matches or “friendlies.”

The field is a mix of natural grass and synthetic turf, which is needed to cover up the infield and retractable pitcher’s mound. It also doesn’t quite measure up to the FIFA’s preferred dimensions of 120 yards by 80 yards.

That makes it hard to get teams outside of the USL to agree to play LouCity. The club sees those opportunities as crucial. A friendly with the Orlando City MLS team that spawned Louisville City FC drew 9,434 fans to Slugger Field. That’s the second-biggest home crowd LouCity has had.

The players don’t like the mix of surfaces because it makes them lose their footing.

“Slugger field is a great field, the atmosphere is terrific, and it’s a perfect location,” LouCity defender Kyle Smith said. “The problem is the turf and grass. You see players slipping all the time. The turf is in a critical area.”

“When you are on the turf, you have to make sure you have good footing when you clear the ball,” he said. “There are no shoes you can wear (to help).”

The Coopers’ Farmer tries to make the best of the situation. When rival fans make fun of LouCity for playing soccer in a baseball stadium, he tells them that just makes the team more American.

He is confident the stadium plan is on firm footing. And he has one thing he is looking forward to, above all else, when he slips into his seat in a new soccer-specific stadium where the team can control the concessions.

“Adequate beer sales,” he said.

This article is the feature story from the March 1 issue, covering the Louisville City FC's mission to secure a soccer-specific stadium and what that means for the city and the taxpayers. To read a related story from the issue, about the region’s other cities pushing for soccer stadiums, click here.