Louisville’s pro soccer club plans to break ground on a $65 million Butchertown stadium in August after the state agreed Thursday to support the project with $21.7 million from taxes. The entire development project, which includes offices, hotels and commercial space, will cost $193 million.

An executive with Louisville City FC, the defending champion in the United Soccer League, said Thursday that the state assistance will help the club’s owners meet loan obligations for the development.

“We’re very, very grateful for all the support we’ve received,” Brad Estes, the club’s executive vice president told Insider Louisville Thursday morning.

The stadium’s projected cost increased to $65 million, from the previous estimate of $50 million, he said, and the number of seats, previously at 10,000, has increased to 11,300.

“We’re seeing additional demand,” Estes said. “There’s just a lot of excitement right now.”

That excitement comes not only from the stadium plans but also from the club’s continued sporting success, he said. With 10 matches played this season, LouCity FC is in first place in the USL’s Eastern Division.

Beyond a stadium, club owners plan to develop two hotels, offices and retail establishments at the site next to Interstates 64 and 71. The owners have had initial discussions with potential development partners, but Estes said he could comment who LouCity FC may partner with. The state TIF is a “lynchpin” that will allow those discussions to progress, he said.

The owners will fund the stadium project with their own money and bank loans, which they will pay back, in part, with the $21.7 million in Tax Increment Financing that the state approved Thursday. TIF districts capture taxes from new developments in a specific area — in this case, the 37-acre stadium development site — and funnel a portion of those taxes back to projects within the district.

Jack Mazurak, communications director for the Kentucky Cabinet for Economic Development, told Insider Thursday morning that 60 percent of sales, withholding and property taxes on new developments in the district during the next 20 years will go to the city of Louisville, which applied for the TIF on behalf of the club owners.

The state’s contribution is capped at $21.7 million. How much the state ultimately allocates is dependent on how much the value of the property increases following the development of the soccer stadium project.

The club also received support from the city, which agreed to purchase the 37-acre stadium site property in September for $30 million —  $42 million total including interest — and sell it to the club for up to $16.5 million.

Estes said the help from the state and the city were critical to making this project a reality.

“We would not have been able to do this without the support of the state and the city,” he said.

Estes reiterated the importance of the stadium to the club’s viability.

The team is playing its home games at Slugger Field, home of the Louisville Bats, and besides rental costs incurs expenses to convert the baseball field to a soccer pitch and loses out on revenue streams including concessions and advertising. So far, the club has not generated a profit.

“We have lost money in the first three years, but we had budgeted to lose that money,” Estes said. “We’re doing better than we thought (and) we are continuing to shrink those losses.”

The stadium will allow the club to generate additional dollars from sources including leasing the facility for other events, stadium and pitch naming rights, concessions and parking. The stadium will have 18 suites and other premium seats, as well as standing room behind the goals for hardcore supporters.

The club also plans to roughly double its employment once the stadium opens, Estes said. Excluding players, the club has 20 to 25 full-time employees, depending on the time of year.

LouCity FC plans to begin site work next month and construction in August, with completion expected in March 2020.

 

Source: insiderlouisville.com

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