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North Carolina FC and Kane Realty reveal $2 billion stadium plan for downtown Raleigh

BY ZACHERY EANES

JUNE 25, 2019

North Carolina Football Club owner Steve Malik and Raleigh developer John Kane revealed their vision Tuesday for a massive sports stadium project south of downtown, drawing up plans for a 20,000-seat stadium surrounded by nearly $2 billion worth of private development.

The project — which Malik and Kane are dubbing Downtown South — would radically change the southern entrance to downtown Raleigh, creating a new cluster of high rises right off Interstate 40 in an area that is currently dominated by empty fields and small businesses.

Malik and Kane are set to discuss the plans in downtown Raleigh on Tuesday morning, but a website meant to drum up local support for the project went live prior to the event, revealing many details of the project.

In addition to the stadium, which would be placed on 55 acres off South Saunders Street near Interstate 40, Kane and Malik hope to attract partners to build:
  • 1.6 million square feet of office
  • 1,200 hotel rooms
  • 1,750 apartments
  • And 125,000 square feet of retail and restaurant space.

 

Previously, Malik has likened the potential development as another “North Hills,” referencing the successful office, retail and residential area Kane Realty has built north of downtown. Renderings of the project show several high-rise towers lined along South Saunders Street and around the stadium.

The stadium would become the permanent home for the men’s pro soccer team NCFC as well as the women’s pro soccer team N.C. Courage. Malik has owned those two teams since 2015 and has put the city’s name in contention for a future Major League Soccer franchise.

However, with competition from cities like Charlotte, Sacramento and St. Louis, Malik has stressed that an MLS team is not a requirement for this stadium, adding that it could also be used for concerts, festivals and other sporting events.

ASKING FOR PUBLIC MONEY

To pull off the project, the group is asking for $13 million a year for 30 years from local governments to pay for debt service and the maintenance of the $180 million stadium.

That money would come from the Wake County room occupancy and prepared food and beverage taxes. The tax generated around $55 million in the 2018 fiscal year. Money generated by the tax can only be used on tourism-related projects that are likely to bring more visitors to the county.

It is unclear, however, if the stadium will be able to get any of that local money, let alone $13 million per year. As The News & Observer reported last week, the soccer stadium was not included on an initial recommendation list for money, while other existing entities, like PNC Arena and the convention center, were included.

In response, NCFC said it was not surprised by its exclusion given it hadn’t “officially disclosed our new downtown site, the economic analysis or the net positive benefit to the city and county” at that time.

On Tuesday, though, the group shared that economic analysis with the public, highlighting a report done by the consulting firm Economic Leadership LLC.

The report said that it expects that the stadium and surrounding development would create over the next 15 years:

  •  $2.7 billion in economic activity for Wake County
  • 5,900 new jobs
  • $20 million in property tax revenue
  • And $3.7 million tourism related tax revenue annually.

On the website created for the project, Malik and Kane urged residents to reach out to their county commissioner or city councilor to pressure them to vote for the project.

Malik has previously said that if his group doesn’t receive local money, then it will decide to develop the property in a different way.

But if it does receive money, then construction on the stadium could start as soon as 2020, with the stadium and the first phase of the larger development being completed by 2023.

PREVIOUS EFFORTS

Malik and Kane have long sought to put a stadium in downtown Raleigh, previously identifying state-owned land on the corner of Salisbury and Peace streets.

But that changed earlier this year, when the group began to make moves to acquire property around Penmarc Drive off South Saunders Street.

In a one-on-one interview in March, Malik admitted that dealing with the state to get the land would have taken too long and there was an ongoing question of where so many displaced workers would end up.

On top of that, the new property south of downtown was in an opportunity zone, a new feature in the country’s tax code that allows developers to earn savings on capital gains by investing in economically disadvantaged area.

Those potential tax savings would open up a whole new realm of possibilities, Malik said, noting that feature didn’t even exist when the club first announced its intentions to build a stadium.

The zone designation could make it easier for Kane Realty to find more partners for the development around the stadium.

The area south of downtown has seen a fast-paced evolution in recent years, as a surging downtown Raleigh expands into the area’s neighborhoods and commercial areas.

The area was on pace to keep changing in the coming years without the stadium, but if this project were to get off the ground, coupled with the development of Dix Park, investment in the area will hit a new gear.

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Source: The News & Observer