Real deal isn't ready yet

(by Amelia Nielson-Stowell and Leigh Dethman desnews.com 2-23-06)

Real Salt Lake says it's met all the county requirements for public funding of a state-of-the-art soccer stadium, but Salt Lake County officials aren't ready to rubber-stamp anything just yet.

A day after the hotel tax bill passed the House, Real Salt Lake released a funding proposal that outlines pouring roughly $45 million of public money into the stadium.

However, Salt Lake County officials say they were thrown for a loop by the "premature" release of funding details.

"This is an extremely complex deal that involves a soccer franchise," said Darrin Casper, the county's chief financial officer. "This is something you don't do in a couple of weeks. We haven't rejected them, we still have a lot of work left to do. But why they had a press release saying they've met the mayor's criteria baffles me."

Real Salt Lake plans to break ground on the 22-acre soccer stadium in Sandy this fall but has said the stadium can only be built through a private-public partnership. The $145 million project includes a broadcast studio and hotel, and officials are asking for public dollars to go toward infrastructure, such as repairing roads and adding a sewer line.

If HB371 passes, the county has been told by the Legislature that the majority of its share of hotel tax dollars must go to the stadium project. The bill, sponsored by Rep. David Clark, R-Santa Clara, would allow all counties in the state to levy a 1.25 percent tax on hotel accommodations for tourism projects.

"There is absolutely no doubt about the fact that we are not getting this tax authorization unless soccer is a part of it," Salt Lake County Councilman Joe Hatch said. "There is no way I and almost anybody else would take advantage of this tax and spend it in a way contrary to the Legislature's intent. That would be absolutely the worst, and we would never do that."

Under Real's stadium funding proposal, a 20-year bond would be created with Salt Lake County to split hotel taxes over the period from 2016-23. The first 10 years of the county's hotel tax dollars are already committed to expanding the Salt Palace and adding a parking garage to the South Towne Expo Center, money lawmakers approved only for that restricted use last year.

Real's plan does not pigeonhole all of the county's hotel tax money for the stadium. For the first seven years of the bond, 65 percent of the county's hotel tax dollars would go to stadium infrastructure while the county could use 35 percent for other tourism projects. And for the last 10 years of the project, the stadium and county would split hotel tax funds 50/50.

"These things don't work unless there's some public-private partnership there," team owner Dave Checketts said. "The notion that any of this money is just lining our pockets is just erroneous. They're (the county and city) taking over the land, just the way they do with any other private enterprise. . . . This just happens to be more public because it's private sports."

Salt Lake County Mayor Peter Corroon has outlined five conditions for the stadium partnership in order for the mayor to pledge his support. One condition says it must benefit all county residents, a point Real says it will accomplish by bringing hundreds of visitors to the county each season.

But Councilman Mark Crockett, who is leery about using public dollars for soccer, says the project seems to benefit only Sandy.

"Though it may be great for Sandy, it is not clear how this deal does anything much for tourism or the county as a whole," he said. "It would require downtown and west-side hotels to subsidize their own competition in Sandy."

Stadium funding must primarily come from non-Utah residents, protect the county's triple-A bond rating, and Sandy must be a partner in the finance plan to gain Corroon's approval.

Several county officials were upset Wednesday after Real Salt Lake released its proposal, which labeled project details that it says accommodate Corroon's criteria.

"It's premature to say that the county has made any kind of decision like this," Corroon said.

Although Real maintains it will protect the county's triple-A bond rating, Hatch said Real can't be sure because the proposal has not gone before the county's debt-review committee.

Real's proposal calls for a minimum of $41 million, with $34 million generated by the county's hotel tax and another $7 million of tax increment. The latter would come from property taxes on the stadium site that Sandy would divert back into the project.

"To us, we think this would be a great investment because it would go towards those roads and such," said Sandy Mayor Tom Dolan. "Because this project will create jobs, we'll look at this as an opportunity."

The tax increment would have to come through Sandy's redevelopment agency in the form of an RDA project. RDAs are a tool used by cities to cure blighted areas by diverting property taxes into city rejuvenation projects.

Sandy's portion of the funding hinges on Sen. Curt Bramble's RDA reform bill, SB196. The Provo Republican's new approach takes a three-track process for cities to still bring in developers with tax incentives but with a tighter rein on tax dollars.

In 2005 legislation designed to overhaul the state's RDA system, Bramble included a provision that excluded the use of RDAs to pay for a sports stadium or arena. But now, SB196 would change Bramble's old law, giving Sandy the chance to use RDA funds to help build a permanent home for Real Salt Lake.

Bramble maintains last year's legislation was not aimed against soccer stadiums — it was to aid school districts and other taxing entities who lose their cut of property tax dollars when an RDA project is approved.

After a public funding route is approved, Real's Checketts said, the team's next step will be granting naming rights. Like MLS stadiums the Home Depot Center in Carson, Calif., and the Pizza Hut Park in Frisco, Texas, the Sandy stadium will also be named after a corporate sponsor.

Real officials also said Wednesday that they have not decided whether alcohol will be sold in the stadium.

"We've really battled through this," said Checketts of the team's yearlong fight to get public funding. "Now we have a change to build Soccer City USA."