I agree with you Jedi that we should build it now. I also feel that the stadium will have a resounding draw amongst Utahn's and their families, now. No other sport has wider appeal amongst kids, and one thing that Utahn's are very much about, are their kids. That's what this stadium and its surrounding fields should be about more than anything else,"the kids."
County number-crunchers call it a risky investment
By Leigh Dethman
Deseret Morning News
A stadium deal for Real Salt Lake could be dead by next week.
Salt Lake County's Debt Review Committee unanimously voted Tuesday that giving $30 million in hotel-tax revenue to help finance the $110 million soccer stadium in Sandy is a risky investment. Two members of the committee abstained from voting.
County Mayor Peter Corroon now must weigh the odds. He said he will decide early next week whether to recommend that the Salt Lake County Council commit public funding for the stadium.
"I'm not one who has never taken gambles in my life," Corroon said. "But if I don't think it's a risk worth taking, I won't."
Team owner Dave Checketts believes public funding for a stadium is not a gamble at all.
"There is little to no risk for the taxpayers of Salt Lake County," Checketts said in a written statement.
Even in the "unlikely" event that the team fails and abandons the stadium, Checketts said, the county still comes out on top: Salt Lake County would still hold "substantial assets" after the team leaves, including $13 million in land that will appreciate in value over the years and a shared parking lot with the South Towne Exposition Center.
The team would also have to pay the county $10 million if it moves within 30 years, if Corroon were to approve the deal.
But that wasn't enough to sway the Debt Review Committee. The team's weaknesses far outweighed the strengths, according to the committee's recommendation to Corroon.
The deal-breaker for committee chairman Larry Richardson was that he believes Real won't be able to pay off its debts. The committee based its decision on a financial model that blended the team's projections with figures from an independent financial consultant.
According to the committee's financial model, the team wouldn't have enough money to pay its $3.3 million in yearly debt obligations in four out of the next seven years.
"That's the problem there — they end up with so much debt and so much debt service," said Richardson, who also serves as county treasurer. "I said from the get-go, if it didn't cover the debt service, I couldn't vote for it."
Real Salt Lake leaders believe that they can make more than enough money through ticket sales and concerts at the stadium to pay off the debt.
The committee, however, didn't believe all of Real's "sunny" concert assumptions, said Doug Willmore, the county's chief administrative officer.
The committee's hybrid financial model cut the team's concert projections in half: The team forecast 11 to 18 concerts a year, but the committee predicted four to 11 a year. The committee also shaved the team's concert-attendance projections by 5,500 fans.
County number-crunchers also slashed projected attendance figures at Real games: The committee believes Real can get only as many as 12,800 people to buy tickets in 2013, while Real believes nearly 17,000 will pay up.
Checketts said he knows he can achieve Real's projections, because he's a veteran in the sports business.
"Throughout the review of our proposal, the committee has undervalued our experience in building and running professional franchises and entertainment venues," Checketts said. "Further, they have overvalued a pessimistic view that Salt Lake County really doesn't have the people and the market to make this sort of 'major league' project a reality. We continue to disagree with this sort of attitude."
Another weakness in the Real business plan was the financial "uncertainties," according to the committee's recommendation to the mayor. The team has only a "moral obligation" with the county to give the team $10 million in 2011 and another $10 million in 2015. If a future County Council were to decide not to bond for that money, the committee wasn't sure what would happen to the team's finances.
The other major uncertainty is the amount that Sandy would contribute to the project. The original deal plan, agreed to last August, called for $30 million from the county, $15 million from Sandy and an undisclosed amount from private investors.
The committee believes Sandy can raise only $7.5 million through a redevelopment-agency bond, although no taxing district has committed its money yet.
Sandy Mayor Tom Dolan insists the city can come up with the $7.5 million in redevelopment-agency dollars for the stadium.
"I'm not surprised about anything that happens in Salt Lake County," said Dolan. "We weren't invited to give much input into it, and I think they're using it as a scapegoat in their decision-making process. We know how we can come up with the money for it. But that's really not of interest to them. That's a cop-out."
Dolan said Corroon promised he would call the Sandy leader before he makes his decision next week. Sandy's next course of action will be determined after that, Dolan said.
Although Real insists it can't survive without a stadium of its own, Checketts isn't giving up yet.
"We remain hopeful that Mayor Corroon and the County Council will look beyond politics and have the vision to do what is best for Salt Lake County," Checketts said.
Deseret Morning News graphic
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