by Julie Tisdale
City & County Policy Analyst
I remember when Major League Soccer launched in 1996. It was just a handful of teams, and none of them were close to North Carolina. If you’d told me then that, 20 years later, not one, but two, North Carolina cities would be vying for MLS franchises, I’d have laughed. This was North Carolina. My father may have grown up playing soccer on the West Coast, but it was different here.
I was wrong.
Soccer’s popularity has boomed. From ten teams in 1996, MLS has grown to 20 teams now. Next year, that will jump to 22, and there will be 24 teams in 2018. Finally, in 2020, the league expects to add two more teams, numbers 25 and 26. And that is where things start to get interesting for North Carolinians.
Both Raleigh-Durham and Charlotte want one of those expansion teams. My gut tells me that North Carolina won’t get both. And so we have a position before us where our state’s two largest metros will be competing against each other for a franchise.
At the Locke Foundation, we’re big believers in competition, whether it be in health care, education, utilities, or sports. Two teams with competing bids should mean that the stronger fan base, the better stadium, and the more robust business plan will win out. That should be good for the eventual soccer team as well as for the league and the host city.
But here’s the problem. In recent years, it has become common for teams and owners groups to ask cities and counties for large sums of money to build the stadiums in which they will play. Buoyed by bogus studies about the economic impact teams will have on their cities, they ask for cities to spend tens or even hundreds of millions building state of the art facilities.
In Charlotte, this has already happened. Bruton and Marcus Smith, owners of the Charlotte Motor Speedway, are looking to bring an MLS team to Charlotte, and they’re asking the city and county to each put up $50 million, in addition to $50 million the Smiths would spend themselves. County Commissioners have already met and begun to consider that proposal.
Steve Malik, owner of North Carolina FC (formerly the Carolina Railhawks), has said his group is prepared to pay for a stadium in the Raleigh area itself, but that they’d likely be looking for some other taxpayer-funded infrastructure or parking. In both cases, Charlotte and Raleigh, the exact details are still up in the air.
What I fear is that Raleigh and Charlotte will watch, and then try to out-do, each other. If Charlotte pledges money, then maybe Raleigh will try to offer more, leading Charlotte to sweeten their deal, pushing Raleigh to add more, and on, and on. And the losers will be taxpayers.
Any “public support” will really mean that taxpayers end up footing the bill, probably through increased property taxes. And that might be a trivial amount – similar to the money for a unplanned vacation that you manage to absorb through belt-tightening without defaulting on your mortgage. On the other hand, it might be a total disaster, like it has been for Bridgeview, the suburb of Chicago where their MLS team, the Fire, have their home. The town loses $3-4 million on the stadium every year, has seen its credit rating drop, and has had to increase property taxes to cover the loses. This occurred despite claims that the stadium would spur economic development.
So Wake, Durham, Charlotte, and their adjacent counties should beware. If the soccer team is a good investment, if it will be profitable. If it is, its stadium will generate money for its owners and private investors will jump on the opportunity. If the owners aren’t willing to put up their own cash, or if they can’t find investors to foot the bill for a stadium, then that should serve as a warning to cities and counties that this project is risky – so risky that private investors, who spend their careers speculating about these things, don’t want to get involved. If it’s too risky for them, then it’s too risky for North Carolina’s taxpayers, too.