MLS Stadium as Cornerstone to Sacramento Development

Sacramento Republic FC stadium rendering

With Ron Burkle investing in Sacramento Republic FC and a proposed downtown stadium, it’s time to review exactly what’s in the works, as the ownership jockeys for a future MLS expansion team.

The proposed stadium site would be part of a larger development on 240 acres on the edge of downtown Sacramento. Yes, 240 acres is a huge amount of infill for development, which is why city officials are giddy when considering all the possibilities. Medical giant Kaiser Permanente has already committed to building a huge medical center on part of the site. The city has committed to a new Sacramento Supreme Court building, with construction beginning this year and completing in 2022. And Burkle‘s investment in Sacramento Republic FC includes a purchase of the land needed for a new MLS stadium, which could open by 2022 if Burkle lands an MLS expansion franchise this year.

But none of this will come easily or cheaply. Developing 240 acres on the edge of a downtown area is a daunting challenge: though Kaiser Permanente and Sacramento Republic FC will bear their own construction costs, city officials estimate that it will take $300 million or so in infrastructure work to attract other investors. The city is also moving ahead with an incentive plan to land MLS and the stadium development. Once these three cornerstones are in place, you can look for other commitments in terms of office space, a light-rail station and affordable housing from the city and developers. This will likely include some sort of sports and entertainment district, designed to take advantage of the potential MLS stadium. From the Sacramento Bee:

Burkle alone brings a national business portfolio to the soccer site, where he is said to be planning an entertainment district. Burkle is a major investor in upscale hotel chains, and the site would be perfect for a hotel, said Lloyd Greif, a Los Angeles investment banker who’s known Burkle for years. “There’s an opportunity for him to make a killing on the real estate,” Greif said.

But deep-pocketed investors may bide their time before developing.

In Pittsburgh, where Burkle owns the Penguins of the National Hockey League, officials gave him rights to 28 acres of land in 2007 surrounding the team’s old arena. Burkle built a hotel, but the rest of the land remains untouched. Recently, the Penguins hired a prominent redevelopment official amid signs the team wants to jump-start development.

The potential lesson here? The larger the development, the longer it takes to arrange all the necessary pieces. So while a new MLS stadium has the potential to make a huge impact on downtown Sacramento (something we know MLS officials like to see when it comes to expansion franchises and new stadiums), that impact won’t be felt for many, many years.

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