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Goal! Sacramento is officially a Major League Soccer city

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It took years to line up the kick. But Sacramento has scored. It’s now a Major League Soccer city.

Standing before a jammed shoulder-to-shoulder crowd in a banner-festooned downtown hall, a smiling MLS Commissioner Don Garber formally announced that a Sacramento investor group headed by business magnate Ron Burkle has been awarded the 29th and perhaps second-to-last franchise in the nation’s top professional soccer league.

Garber, who years ago promised Sacramento’s move to MLS was a matter of “when, not if,” made the news official.

“Well folks, ‘when’ is today. Your ‘when’ has arrived,“ Garber said.

The Burkle group, which came to a franchise agreement with the league after negotiations that extended from April to now, will launch pre-construction site work for a 20,000-plus seat stadium in the downtown Sacramento railyard. The $252 million stadium is expected to be ready to host a team in spring of 2022 under the city’s existing Republic Football Club banner.

Speaking one-on-one with The Sacramento Bee Monday morning, Burkle, who lives in Beverly Hills and also co-owns the Pittsburgh Penguins of the National Hockey League, said he has been all-in on buying a soccer team for Sacramento since he was approached two years ago by former Mayor Kevin Johnson.

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He said he is buying the team to hold it for the long-run, and expects to build a successful franchise that makes money by offering a great fan experience.

“I like the idea of soccer. The time is right for soccer. It is going to grow and grow, and Sacramento is the second largest city in the country that only has one (major league sports) team,” Burkle said. “I like communities where there is hard work and loyal people.

“Sacramento seems to be a place that doesn’t get as much credit as it should.”

It was the first time Burkle has spoken publicly about his decision to become an MLS owner in Sacramento. Burkle previously briefly led a group that was planning to buy the Sacramento Kings basketball team in 2013 and keep it in Sacramento. Burkle, however, backed out of that effort, but said he came to learn more about and appreciate Sacramento during that venture. The Kings remained in town under other ownership. Today’s announcement gives the capital city two major league teams playing within blocks.

Ron Burkle: Republic FC will win

Burkle said he and his group are in it to win, as he is in Pittsburgh, where his team has won three championships.

“We’re either going to win, or get caught trying,” he said.

He and his investment partners studied both Sacramento and Major League Soccer and decided the effort makes good sense financially long term. But it’s also satisfying on a personal level to have an experience that even his grandchildren can enjoy. “For my older kids having the hockey team was a really exciting part of life. The little guys and my grand kids will all be soccer players, I’m sure.”

Burkle said he had thought he and his group where going to pay a $150 million franchise fee to join the league, and were not pleased to discover MLS had upped the fee to $200 million. But he said he accepts MLS’s right to establish a fee that the market will bear.

“It’s a free market world, and when the price went up to 200, it went to 200,” he said laughing, sitting next to Garber in a back room upstairs at The Bank food hall just prior to the announcement. “But the commissioner worked with us ... and we came to a place where we thought we could make the $200 (million) work.”

Burkle plans to develop land adjacent to the stadium in the railyard to help create a broader business enterprise that will increase his financial footprint in Sacramento business.

Garber, who joined Burkle in speaking to The Bee before the 11:30 a.m. press conference, said he has long believed that Sacramento would someday land and MLS team.

“Through all the challenges from five years ago, we never really lost faith in the city leadership,” he said. “We are really appreciative of Ron coming forward bringing their years of experience in the business of sports and philanthropy to help us grow the league.”

In a written draft of his press conference comments, Mayor Darrell Steinberg, acknowledged he had doubts at times that the city would be able to land a team, but said those doubts were fleeting, given the tenacity of local leaders and Republic team officials.

The five-year effort to land an MLS team was led by officials with the existing Republic FC club, which plays in the lower-tier United Soccer League. Those officials included one-time owner Warren Smith, recent owner Kevin Nagle and team president Ben Gumpert.

“I know it’s easy to say today that I never really had a lot of doubt,” the mayor’s prepared remarks said. “But truth is, any doubt was fleeting. For I know my city ... we are fiercely competitive. We go all in. We want more for our people. We insist on growth and equal opportunity together. We have big hearts and big ambitions. We also know instinctively that if it isn’t hard, it’s probably not worth it. Today’s victory is sweeter because it was anything but easy.”

How it happened: Sacramento’s MLS expansion journey

Gov. Gavin Newsom joined local leaders on stage Monday morning.

The Sacramento effort to land an MLS franchise, first launched in 2014, has been arduous, with plenty of ups and downs prior to today.

City officials had thought they were at the front of the line in 2016 when MLS Commissioner Garber visited Sacramento and told reporters: “We believe and hope and expect that Sacramento will be part of that next round of expansion.”

But league officials skipped over Sacramento for several other cities since then, and told Sacramento representatives in 2017 that its proposed soccer team ownership group at the time was not as well capitalized as the league wanted it to be.

That effort stepped up a level this spring after Los Angeles billionaire businessman Burkle and Hollywood movie producer Matt Alvarez joined Nagle as lead investors, injecting financial heft into the local effort. Alvarez will conduct more of the hands-on team building in Sacramento than Burkle.

Alvarez said he is pleased to tackle something new after being in the movie business for so many years that it had begun feeling monotonous. “That wasn’t great for me anymore. So this is an opportunity to follow and pursue a dream of mine to be involved with sports.”

The City Council this year agreed to offer the soccer investment group a $33 million incentive package to help it seal the deal with MLS. That included setting up an infrastructure financing district that would use future increased property tax to reimburse the soccer development group for building an estimated $27 million worth of streets, sewers and other new infrastructure on land near the stadium. The deal also includes $2.4 million worth of building permit fee waivers and other tax rebates, and up to $3 million worth of traffic control and policing on city streets adjacent to the stadium during soccer matches.

The city also will rewrite its signage ordinance to give the team rights to install five digital billboards around town.

Steinberg said he will ask the City Council in the coming weeks to modify the financing agreement to give the development group more financial flexibility. After discussions with Burkle, the mayor said he will propose the $27 million portion be made as a loan to the soccer investor group. The loan would come from a city reserve fund.

The Burkle group would pay the loan back to the city with interest. If the Burkle group begins building other projects on land it is buying near the stadium, that development would produce new property tax revenues that could be used to supplement Burkle’s loan repayments to the city.

The mayor said the proposed loan makes it easier for the Burkle group to finance its $200 million league expansion fee, as well as pay for increased construction costs. The league has bumped the expansion fee up in recent years from $70 million to $150 million to the $200 million level this year.

That expansion fee is part of an estimated $500 million to $600 million the Burkle group is expected to invest to bring the team to Sacramento.

That includes Burkle’s pending purchase of the 14-acre stadium site plus an additional 17 adjacent acres to do additional development, potentially housing, retail, entertainment or other commercial development.

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Tony Bizjak has been reporting for The Bee for 30 years. He covers transportation, housing and development and previously was the paper’s City Hall beat reporter.
Marcos Breton writes commentary and opinion columns about the Sacramento region, California and the United States. He’s been a California newspaperman for more than 30 years. He’s a graduate of San Jose State University, a voter for the Baseball Hall of Fame and the proud son of Mexican immigrants.
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