Assessing MLS expansion candidates: Cities in the hunt and the long shots
A Major League Soccer expansion race that officially kicked off in January looks set to reach its first milestone in mid-December. An MLS Board of Governors meeting set to take place around MLS Cup will see owners decide which two of the 12 contending cities will be selected for teams 25 and 26. Teams 27 and 28 will be chosen at a later date.
To that end, the 12 prospective ownership groups have been jockeying for position for the entirety of 2017. Some cities that looked to be locks fell by the wayside. Others were never in the running. Yet several candidates have emerged with strong stories to tell.
In the first part of a two-part series, Jeff Carlisle assessed the front-runners and favorites to join the league with a month to go before MLS picks its two candidates. In the second installment, he looks at the cities with longer odds of joining the North American league.
In the hunt
Phoenix appears to have done the hard part in terms of its expansion bid. It has a stadium site selected. Its USL team is already playing in a temporary venue there. There are no local political hurdles to overcome.
But every MLS-related stadium deal has its own set of complications, and this one is no different. The site is on tribal land belonging to the Salt River Pima-Maricopa Community. Phoenix's ownership group and the Solanna Group, the developer representing the tribe, already have a joint venture for 75 acres, where the actual stadium will sit. But MLS won't grant a bid until the ownership group is bolstered. That means raising $125 million with the help of Goldman Sachs. That can't happen until Phoenix Rising agrees to a deal with Solanna for the 500-plus acres needed for the rest of the development project, all while getting approval from the U.S. Bureau of Indian Affairs.
"We need [to] get MLS comfortable with [securing the site], and I'm confident we have a pathway to do it," Phoenix Rising co-chairman Brett Johnson said. "What I don't want to do is raise $125 million, take on $125 million in debt, but not control the real estate around it."
In the meantime, Johnson is trying to placate concerns about the heat in the summer months. Johnson said Phoenix Rising have been engaging architects to make sure that fans and players will be comfortable. He is encouraged by the designs he has seen so far, which involve both passive (shade) and active (moving air) types of cooling. The proof, of course, will be in the execution.
All told, Phoenix's path to the expansion finish line in the 2018 time frame looks doable but has a lot of moving parts.
When voters approved a ballot initiative in May authorizing the St. Petersburg city council to engage in lease negotiations with Tampa Bay Rowdies owner Bill Edwards to use Al Lang Stadium, the path seemed clear for him to make $80 million in improvements to the venue. Yet what has resulted is a chicken-or-egg scenario. Edwards indicated that the lease wouldn't be negotiated until political leaders had assurances that he would get an MLS team. Of course, MLS wants the stadium situation buttoned up before it will do so.
"I'm hoping there will be a way to get some kind of letter of intent, even if it's confidential, so we could go with something in our hands when we go to the city," Edwards said. "Obviously, you'll be in a much better bargaining position if we're sure we're going to get the team. There's a lot of work in that department."
There have been some other delays as well. Edwards had heart bypass surgery on the day of the ballot initiative, though he has fully recovered. St. Petersburg just had a mayoral election, and Edwards said he preferred to wait until that was over before negotiating with the city. Edwards' preferred candidate, Rick Baker -- who doubles as Edwards Group president -- was defeated by incumbent Rick Kriseman, but now at least talks can move forward.
Hanging over the bid is an ongoing whistleblower lawsuit in which Edwards' company, Mortgage Investors Corp., is the sole remaining defendant after Wells Fargo settled for $108 million. Although the optics are poor, one league source indicated that the litigation isn't disqualifying in terms of the bid.
Edwards indicated that he's seeking between $200 million and $250 million from additional investors. He admitted that he has some catching up to do, and that will need to accelerate in 2018.
Tangible progress has been tough for Steve Malik's group to find the past few months. Granted, Malik has had the distraction of the NASL's lawsuit against the USSF to contend with. As WRALsportsfan.com's Neil Morris pointed out, it's one in which Malik could be considered both a defendant and a plaintiff, given that he is the owner of North Carolina FC and sits on the USSF's Board of Directors. But at least in terms of the expansion push, he hasn't encountered the kind of roadblocks that have upended other bids.
Malik told ESPN FC that his group is still pursuing its preferred stadium site at the State Government Complex.
"It's not finalized," he said. "We wanted to build a groundswell of support. We've done that. We've been talking with the state, addressing concerns and issues before and putting a final package together. Lot of progress. They've been engaged. Also engaged with folks on local level. First we felt we needed to secure land before we really got super engaged on that side."
Malik also indicated that his group is looking for additional investors, and that process continues, even though few new details have emerged.
"We've been engaged in that process," Malik said. "I've had a number of conversations, and we've got representation helping us in that regard. I feel good about that."
But much like St. Petersburg's Edwards, Malik will need to make some headway when the calendar turns.
It's complicated ...
Once viewed as a front-runner, San Diego has seen its bid bogged down by local politics. The good news is that FS Investors, the firm leading the expansion effort, succeeded in getting a citizens' initiative put on the ballot in order to approve "SoccerCity," a $4 billion development project that includes a proposal for a 32,000-seat stadium that would replace aging Qualcomm Stadium and be used by San Diego State. The bad news is that the election won't take place until November 2018. Not only does FSI have to win the ballot initiative, but it also has to hope that MLS gives it time to do so.
"I can't control MLS," FSI project manager Nick Stone said. "If there are four cities ready to go, we'll be hard-pressed to compete with that."
The delay is problematic on several fronts. It gives other expansion cities time to pull ahead in the race for slots 27 and 28. Another complication is that a competing project from another developer -- who is calling the project SDSU West. Stone admitted that a ballot initiative to approve SDSU West "is almost certain to be on the same ballot."
Stone remains confident that FSI's proposal is superior. SoccerCity has support from Scott Sherman, the city councilman in whose district the stadium will sit. But all of this amounts to a series of hurdles that FS Investors might not have time to overcome.
San Antonio took a flying-under-the-radar approach to its expansion bid, even as its ownership group, Spurs Sports & Entertainment, is the kind of investor MLS would love to bring on board. But the effort sustained a perhaps fatal hit when it emerged that Columbus Crew SC owner Anthony Precourt was taking a hard look at moving his team to Austin, Texas, which is just 70 miles northeast of Toyota Field, home of SS&E's USL side, San Antonio FC.
SS&E had viewed Austin as part of the expansion bid's catchment area, but now the hunter has become the hunted. Bexar County and the city of San Antonio, which ponied up about $18 million to purchase Toyota Field from previous owner Gordon Hartman (SS&E added $3 million) were attempting to figure out the best way to pitch to voters a $100 million stadium expansion, the majority of which would be public money. But now that has been thrown into disarray.
Bexar County Judge Nelson Wolff -- the equivalent of the mayor of the county -- has instructed the district attorney to investigate whether MLS violated any criminal laws when it encouraged Bexar County and the city of San Antonio to purchase Toyota Field back in 2015.
Whether the threat of prosecution amounts to anything remains to be seen, and in the meantime, SS&E insists that it will continue working as before -- quietly and efficiently. But until Precourt's intentions become more concrete, San Antonio's bid is stuck in a state of suspended animation.
Little has changed since April, when a ballot initiative for the city of St. Louis to fund a $60 million portion of the stadium was defeated. The commitment for $270 million from the group led by Paul Edgerley remains on the table. All that's missing is a municipality to step up and bridge the funding gap. So far, none has come forward.
"We'd be open to entertaining proposals brought forward to the group," said Jim Woodcock, a spokesman for MLS2STL. "Right now, nothing actionable has surfaced."
The expansion bid led by Indy Eleven owner Ersal Ozdemir has been stuck in neutral since last April, when the Indiana General Assembly ended its session without passing a measure to fund a 20,000-seat downtown stadium. The state's fiscal year runs on a two-year cycle, which means the next time Indy can get its project approved by legislators will be in 2019. By that time, it's quite possible that the race might already be over.
Indy Eleven isn't giving up entirely, however. The team's preferred stadium site is still one situated next to Lucas Oil Stadium, though team president Jeff Belskus admitted, "Just because it's our preferred location doesn't mean it will match up with other people."
The site is comprised of land mostly owned by the state of Indiana, though there are some parcels owned by private parties as well. Belskus said it would take approval from state and local authorities to proceed.
With the next legislative session set to begin in January, Indy Eleven will aim to get more of a head start than last time, when its attempts to meet with legislators were criticized for being too last-minute.
"We would have to get something on the legislative agenda in the first quarter of next year," Belskus said. "Time is not on our side from that perspective."
Even if Ozdemir gets more traction this time around, it's difficult to see how a city that is one of the smaller media markets of the 12 contenders can catch up to larger cities such as Detroit, Phoenix and Tampa/St. Petersburg.
Charlotte's bid for an MLS expansion franchise has suffered one blow after another, and it's difficult to see a path forward, even for 2018.
At first, all looked possible. The plan was for Mecklenburg County and the city of Charlotte to provide $175 million in public funds for a venue on the site of aging Memorial Stadium. But then Mecklenburg County commissioners opted to provide the ownership group, led by Speedway Motorsports CEO Marcus Smith, just the land and none of the money. The city then reduced its contribution from $43.5 million to $30 million. That didn't come close to providing the public component that Smith says he needs.
Now, following last Tuesday's election, the city of Charlotte has a new mayor, Vi Lyles, as well as four new at-large city council members. Mike Burch, the chief strategy officer for MLS4CLT, said it was too soon to tell if the newly elected officials would have an increased appetite for the project.
"If there's any interest or will from the city council to continue this process, to be engaged, then we're willing and open-minded. But really, we'll leave the ball in their court," Burch said. "If they want to pick it up and move it forward, then we're willing to participate."
He added that there are developers that have expressed interest in trying to move the stadium project forward at alternate sites, but "unfortunately those scenarios just end up with an increased cost for land acquisition without any real additional revenue streams. It doesn't make sense from an economic point of view to look at those scenarios."
Burch said there will be some follow-up with city council member James Mitchell, who has been spearheading the project on the political side. Burch didn't sound optimistic that much would change.
"We're not going to proactively pursue this," he said. "If there's interest, they know how to reach us."
Jeff Carlisle covers MLS and the U.S. national team for ESPN FC. Follow him on Twitter @JeffreyCarlisle.