On October 26th, the Louisville Metro Council approved all Ordinances and Resolutions for the creation of a Soccer Stadium for the LouCityFootball Club in the Butchertown area. It is an investment of $30 million in a bond issue by Metro Louisville.
On this page, all information connected to the project and links to all committee meetings have been created to give everyone the latest information about the project.
The Soccer Stadium Ordinances, Resolutions and related Documents
Approved by a 20 - 4 with one vote Present
Aproved by a vote of 23 to 2
Approved by a unanimous voice vote.
APproved by a unanimous voice vote.
Metro Council Committee meetings on the Soccer Stadium Project
Questions that have been asked about the project as of 10/18/17 by Members of the Louisville Metro Council are listed here. This page will be updated with answers from the Fischer Administration and the Owners of LouCityFC before the October 26th vote.
1. Will the LLC partners personally guarantee payment of Metro lease for full term in the event the team folds or relocates?
No. However, the ownership group will be contributing approximately $15M in equity and will be personally guaranteeing approximately $40M to the lender for the financing for the stadium. There will be no personal guarantees to the City although the effect will essentially be the same.
2.The link below is regarding the soccer team owners campaign funds to the mayor and council members. http://wfpl.org/soccer-team-owners-helped-fund-campaigns-of-mayor-counci...
A. My question is who are the council members and the amount of money given to each of them and the date when the campaign money were given?
Neither the ownership group nor the City has those figures. We would refer you to the Kentucky Registry of Election Finance for the answer to your questions. The search link is www.kref.state.ky.us/krefsearch/
B. I would also like know how much money was given to Mayor Fischer's campaign and when was it given.
See Answer to 2A.
3. Cost per Property: Please outline the costs for each parcel of property which is part of this project and include the PVA value assessed for the current or previous fiscal year.
Challenger Lift Site Cost: $7,000,000 PVA Assessed value: $4,455,610
ESS Prisa LLC Parcel Cost: $6,700,000 PVA Assessed value: $3,071,190
Tank Farm Site Cost: $3,450,000 PVA Assessed value:$ 197,730 PVA
Marshall's* Cost: $6,912,000 PVA Assessed value: $1,398,550
*The option agreement covers two separate parcels.
Note: The ownership group has spoken with the owners of the parcels currently owned by the Waterfront Development Corporation and LG&E and intend to purchase same. Further, no LCFC owner has any ownership interest in the parcels to be acquired with city funds. Mark Mitchell of Prism Realty recently appraised the properties to be acquired by the City at $25M.
4. Caps on Metro Involvement in the Property:
The cost for the land is estimated at $24.2 million, with an additional $800,000 for Demo and Cleanup, and $5 million for additional infrastructure improvements. We have been told that all additional expenses will come from the LLC’s not Metro.
A. Where within the Development Agreement or other documents can we see the language that guarantees that Metro will not pay more than $24.2 million for the purchase of the property?
The amount is contained in the options which all have been executed and are binding on the Buyers and the Sellers. $24,062,000.00 is the actual amount. The $24.2M figure came from an earlier estimate for having the City acquire all of the parcels (including the LG&E and the Waterfront Development parcels). However, the ownership group is now going to acquire the LG&E and Waterfront parcels so the cost of the land for the City will be $24,062,000.00. These parcels will be assigned to the City at no charge to make it easier to consolidate the entire acreage into one parcel.
B. Where within the Development Agreement or other documents can we see language that guarantees that Metro will not pay more than $800,000 for environmental or demolition as stated during the committee process?
Section l.OlA details the proposed $30M commitment of the City. The $30M number comes from adding the estimated purchase price of the land ($24,062,000-See explanation in Response #4), $800K for land clearance, etc and $5M for public infrastructure. Section l.OlC states that if the $30M is not enough, then the ownership group is responsible for the balance.
C. Where within the Development Agreement or other documents can we see language that ensures that Metro will not pay more than $5 million for infrastructure improvements in and around the designated property?
In addition to the answer to 4B, Section 4.10 states that the costs of the public infrastructure shall not exceed the amount of the Post-closing Metro contribution which is $5M. The parties have also amended Section 4.0IF of the Development Agreement to clarify that the City' s obligation shall not exceed the $30M figure previously referenced. (See Amendment to Development Agreement attached). The "meet and confer" language in Section 4.0lF is meant to refer to the sequencing and prioritization of the public infrastructure, not the amount.
***The $25M for purchase price of the land/Demo and cleanup and the $5M for public infrastructure are sum certains and cannot be exceeded without future Metro Council approval.
5. Total Debt:
The Bond Documents call for $35 million in General Obligation Bonds and Notes from Louisville Metro. All documents seem to indicate that the total amount in new debt will be $30 million.
A. Can you please explain the breakdown of how all funds will be spent? Can you also explain the terms of the debt and the breakdown of debt in Notes vs. Bonds?
Funds will be spent in the following manner: $24,062,000 for land; $0.8 million for demolition/land preparation; and $5.0 million for associated infrastructure. The initial note will be a taxable Bond Anticipation Note (BAN) likely for a term of 24 months followed by a 20-year bond appropriately divided into a tax-exempt and taxable portion upon advice of Metro's bond counsel and financial advisor.
B. If there are limits on the total cost to Metro, and those costs are capped at $30 million, why would Metro take out additional debt beyond that which is required for the project?
The request for $35 million takes into account the possibility of selling discount bonds and associated issuance costs. The project cost will be $30 million and the only project funded is that listed above in the answer to 5a.
C. Can funds allocated beyond the $30 million designated go towards the stadium project or any other projects now or in the future?
There will only be $30 million of project cost-please see the answer to 5b. For point of reference, this structure was the same structure used by the City in the Omni Financing.
6. Additional Project Costs:
Would the ownership group be opposed to the Metro Council including provisions within the document that ensure that no more than the amount allotted ($30 million) can be spent on this project? Meaning if there are overruns or changes in costs associated with the project, additional funds outside of what has been explained to this council will not be made available without additional Metro Council approval?
No. See Answer to #4. The ownership group has addressed this issue in an amendment to the Development Agreement. (See attached Amendment to the Development Agreement)
7. $35 million Bond:
A. Does the Metro Council have the commitment of the Mayor that no other projects other than those stated within the Development Agreement will be funded using the debt taken on as part of the proposal?
Yes. By law, once the bond ordinance is adopted, the proceeds from said bond can only be spent on the Stadium/Butchertown project that we are currently discussing.
B. Does the Metro Council have the assurances of the Mayor’s office that nothing else will be funded using the additional $5 million in additional debt being sought in the proposed documents?
Yes. by adopting the ordinances as filed, the Metro Council has determined that said funds produced by the bonds can only be spent on the project/purposes set forth in the ordinances.
8.Project Size and Scope:
A. According to Press Statements, this project is called a $200 million project, but in the development agreement and other documents the number used is $100 million. Can we get a breakdown of the investment within this proposal? (How much is associated with Soccer Stadium/Hotel/Offices/etc?
$IOOM-Office and retail (4 buildings at $25M each)
$50M---2 Hotels ($25M each)
B. According to an opinion received from the Jefferson County Attorney’s Office “The anticipated investment of $100 million by private investors is not an enforceable term but merely a goal of the development project”. Are the owners willing to adjust the language in the agreement to REQUIRE that a minimum of $100 million is invested as part of the agreement?
No. Since other private funding is expected to be a part of the project but the terms and the amount of that investment is not known at this time, the ownership group is not in a position to guarantee how much funding will come from the ownership group and outside private groups that desire to invest in the project.
9. Project Failure / Commitments to Goals:
What happens should the project not meet its goals, established within these documents?
A. What if they build the stadium and a small office area but don’t invest $100 million?
If the stadium and a small office area is built, but the full $100 million is not invested, that could impact the number of jobs and tax revenue created by the Project. Because the ownership group is relying on the state tax revenues generated by the Project that would be rebated back to them through the Mixed Use TIF program, that directly impacts their bottom line. The full financial risk of the stadium remains with the ownership group including the requirement to repay to the City the $14.5 million.
B.What if the Stadium build has a cost of under $45 million?
Section 2.13 of the Development Agreement has been amended to require a minimum spend of $45 million. (See Amendment to Development Agreement attached). USL approval of the stadium design is required pursuant to Section 2.02.
C. What happens should the team be sold to another entity? Are these agreements passed on or are they dissolved and a new agreement is needed?
Section 2.14F requires that if the team is sold to another entity, the sale agreement shall include a provision that thereafter during the term of the Stadium Ground Lease, or until such earlier date as the Reimbursement Amount ($14.5 million) has been paid in full, the new owner shall not move or relocate Louisville City FC from the City, and the new owner shall assume the terms of, and the rights and liabilities of Louisville City Stadium LLC under the Ground Lease. All of the parties to the Development Agreement would still be bound by the terms of the Development Agreement. There are similar provisions regarding BDD in section 3.05C.
D. Are there other examples of obligations that are required as part of the agreement that aren’t highlighted above?
Once construction of the soccer stadium begins, there is a completion guaranty. See Section 2.13. Louisville City Stadium and Soccer Holdings have agreed that there cannot be a change in control in ownership without the City's consent during the term of the Stadium Ground lease or until the Reimbursement Amount ($14.5 million) has been paid in full. The developers have also agreed to make good faith efforts to comply with the hiring provisions of Metro Ordinance 37.75 with respect to minority participation, women participation and residents within the MSA during construction of the Project. See Section 2.07. Louisville City Stadium agrees to pay to the City a percentage payment equal to 10% of its operating cash flow in excess of $750,000. This payment to the City is subject to a cap of $2 million in the aggregate. Section 2.15.
10. Rent / Reimbursement:
I have read in the papers that the City stands to get up to $14.5 million back from the team in “rent and from the sale of land”. Please breakdown these numbers so that I can understand them.
A. What are the rent payments and over how many years?
The agreement is structured so that the LCFC ownership group has flexibility with respect to purchasing or leasing the land. In part, what lots are sold, rather than leased, depends on the tenants/users of those lots, as some businesses prefer to lease, and others to own.
If the site comprising the Stadium is leased, rather than sold, there is a formula used to determine the amount of rent, based upon the number of acres being leased. If the stadium site is 15 acres, the annual rent would be $90,000 per year for the first 10 years of the lease, and $180,000 per year after that. The stadium ground lease would be for an initial term of 20 year, with two consecutive 15 year extensions, with an option to purchase the stadium site at any time during the ground lease. Section 2.10, 2.11.
If any of the remaining site is leased, there is a formula used to determine the amount of rent, based on the number of acres being leased, and the remaining Reimbursement Amount to be paid. The example in the Development Agreement would result in an annual rent of $45,000 for a 5 acre tract for the first 10 years of the lease, and $90,000 per year after that. The same lease terms and option apply as for the stadium, above. The City can also require the tenant under such a lease to enter into a PILOT agreement (payment in lieu of taxes) to ensure that the property taxes are paid, even though the City is the owner of the property. Section 3.02.
B. What land is expected to be sold?
All of the land will be owned by the City until such time as it is sold, leased or the $14.SM has been paid to the City.
C. And will the City get every dollar of the sale price or will the Butchertown Group keep a portion?
The City will get a minimum guaranteed price for the lots, as described in Section 11 below. To the extent the developers negotiate a price greater than that amount for the lot, the developer would retain the difference, but any commissions would come of the developer's portion, not the City's. Sections 2.11, 3.02. Should the developers sell the land for less than the guaranteed minimum price, then the developers will have to pay the City the difference between the sale price and the minimum guaranteed price.
11. Sale of Land by LouFC/Butchertown LLCs:
A. If 10 acres of land are sold by the ownership group in the first year of this agreement. What will Metro receive in payment for that 10 acres?
The Development Agreement has a formula in Section 3.02 that provides for what the City would receive when acreage is sold. If 10 acres were sold, the City would receive
B. When is the ownership group required to pay that amount to Metro? Please cite where within the documents the rent and sale of land are stipulated.
The purchase price would be required to be paid at closing, when the deed is executed conveying the land from the City to the developer. Section 2.11, Section 3.02.
C. What happens to the sold land and the payment for that land should the ownership group fail to meet the outlined requirments of this agreement?
Per the Agreement, once a parcel is sold, the City will recoup the minimum release price for said parcel pursuant to Section 3.02.
D.Will Metro be paid the full cost for those acres that have been sold including our financing costs or will Metro take a $250,000 or more loss on each acre sold?
The City will be paid the full amount of the minimum release price upon the sale of any commercial parcel of land pursuant to Section 3.02.
12. Property Development:
Is there anything within this document to prevent someone from within the Butchertown or other LLCs from selling portions of the property to a business or other type of organization owned by a member of that organization?
No. Such a restriction would not make sense given that the goal of the City is to get the land in the hands of private sector entities that will develop it resulting in increased tax payments and prosperity for the City.
13. Bond ?:
It is our understanding that the bond for this property will be for 20 years and for $35 million.
A. What is the expected annual debt payment/schedule expected for Louisville Metro once the bonds/notes are issued?
Please see the letter and attachments provided to the entire Metro Council in response to CM Denton's request of 10/13/17. (Attached)
B. The supporting documents do not have any numbers attached to them?
Please see the letter and attachments provided to the entire Metro Council in response to CM Denton's request of 10/13/17.
C. When is the first payment on said bond/notes expected?
The first BAN interest payment would likely be in August of 2018-the timing will be dependent on the timing of any Council bond ordinance authorization.
14. How (do) you propose to fund the stadium bond and the variety of projects… that include: a new/refurbished police headquarters (approximately $25,000,000), Louisville Urban League’s indoor multi-purpose sports complex ($30,000,000), Waterfront Park’s expansion into the Russell and Shippingport areas($35,000,000) and an unspecified amount for improvements at Riverview Park?
The City will not be footing the full expense of any of those projects, but leveraging state/private funds along with the $30M that was displayed in the attached response to CW Denton.
15. Would you please provide the amortization chart, in detail, for the stadium bonds? Please show the specific source and amount from each source for each year to cover the debt service that Metro government will pay.
Please see the response to CW Denton. Essentially, the City is using the funds we are already paying for debt service to fund the new debt service as it is naturally reduced absent any new issuance.
16. About the stadium:
Is the rendering being shown to the Media and in the attached documents an actual rendering of the stadium to be built? Will there be seats surrounding the field? Will the said/roof/cover presented in the images shown withing the various presentations?
We are continuing to evaluate the highest and best use of the stadium land. Our design will allow our stadium to capture the river views and the bridge views to the North including a large interactive video board. The initial stadium build out will have 10,000 seats all around the stadium and a "standing room only" area to accommodate 2,000 spectators. The roof structure will be aesthetically pleasing and is still in the design process.
17, Stadium Expansion/Promise:
Will the ownership pledge to this Metro Council that funds for any expansion will be based solely from the ownership group/ ticket sales/ non Metro monies? There is a concern that any expansion of the stadium will be contigent on addtional partial fundign by Louisville Metro.
The ownership group will not make any expansion contingent on more funding from Louisville Metro. We pledge that any expansion costs will be funded solely by the LCFC Owners.
18. What is the maximum buildout for this stadium?
We understand that this stadium has a second phase that could see the stadium grow to approximately 20,000-25,000 seats. What is the maximum build out sixe of this stadium? Could seating be added to grown the size of the stadium to 30,000-40,000 seats? Can the area surrounding the proposed stadium handle crowds in excess of 20,000 persons?
30,000 seats is the likely maximum buildout size of the stadium. Yes, we will initially build stadium infrastructure that is scalable to accommodate the needs of a maximum build out.
19. Environmental Remediation:
If there are environmental or other infrastructure overruns or unexpected costs associated with the project, who is responsible for funding such overruns?
The LCFC ownership group. See answers to question Section 1.01A states that the City's contribution is $30M and that includes any environmental issues. Whatever public infrastructure or environmental issues exist that cost over $30M, then they are the responsibility of the LFFC ownership group. (See Amendment to Development Agreement attached).
20. MSD Floodplain:
Is there any anticipated filling in or building of areas that are currently located within the flood plain? If so, please explain how much work is expected, where within the project such work is expected as well as the proposed use if the land that is being adjusted.
Yes. We are still working through various Site layout scenarios, but it is clear that most of the Flood Plain areas will be needed for the Stadium District Development. We have met several times w/ MSD regarding the Flood Plain elevation - and have a preliminary Drainage Concept that MSD reviewed, approved and required from us prior to allowing us to File the Preliminary Development Plan on September 28. There will be no on-site detention required by MSD, and any Flood Plain impacts (by placing of fill or removal of existing pervious surfaces) will be offset by either paying Impact Fees or by creating offsetting volumes in the water shed. The Final solution will likely be a combination of paying Impact Fees and/or creating new areas for volume to compensate for fill placed on the Project. We are also looking at possible parking structures to achieve the Parking needed for the Stadium District. Any Structure built would be located in flood plain areas. MSD will require an extensive Hydraulic Analysis of the Stadium District, where any proposed Flood Plain impacts will be reviewed and approved by MSD. We are locating the Stadium above the Flood Plain, which is why the Stadium will be located in the Central/east side of the Stadium District. We will attempt to place as much surface parking as possible in Flood Plain areas.
Is Metro responsible for any preparation or other work that would include the shifting of soil to alter the flood plain or the area on the project located with the project?
No, this work is the responsibility of LCFC. MSD has made it quite clear that they will not participate in any relocation of infrastructure (such as the larger Combined Storm Sewer that bisects the site) or placement of any fill material. We have discussed w/ MSD the possibility of having MSD divert spoils from the Ohio River Tunnel Project. That material could potentially be used on the Stadium Project, based on preliminary discussions about quality of material anticipated.
22. Land owned by Waterfront Corporation as well as LG&E:
Please explain where the properties owned by the Waterfront Development Corporation as well as LG&E are located. Please include the appraised value for each property, its current use and its future use as part of the project along with the price Metro will pay to acquire property from either of these two entities.
They are small parcels that are located within the footprint of the site but not included in the purchase price of the 5 parcels that are desired to be purchased. (See Answer to #4). The properties have not been appraised and will be acquired by the ownership group not the City. It is our understanding that these parcels are not currently being used by either entity.
23. Lease/Lot Sale Payment to Louisville Metro:
A. Please provide a chart to Metro Council that shows how the Metro Council would expect payments over the course of the 20 year agreement using the assumption that none of the property is sold prior to the conclusion of the 20 year period.
If none of the property is sold during the 20-year period, Metro would receive rents from the stadium parcel ($90,000.00/year) plus any rent from leasing the other parcels based on the formula set forth in the response to question 1OA.
B. Please provide a chart to Metro Council that shows how the Metro Council would expect payments over the course of the 20 year agreement using the assumption that 10 acres are sold in year 2 of the project and another r10 are sold in year 12 of the project. Would the sale or timing of the sale of the property have any effect on payments from ownership to Louisville Metro?
Utilizing the assumptions set out in the response to 11A, if 10 (commercial not stadium) acres are sold in year 2, the City would receive $4,545,455.00. If an additional 10 acres are sold in year 12 of the project (utilizing the same assumptions in the Response to I IA), the City would realize an additional $4,545,454.00. The timing for the sale of the property does not have an effect on the payments to Metro except that any balance remaining of the $14,500,000 owed, will be due at the expiration of the 20-year period. Further, if the ownership group is slow to develop the properties by either selling or leasing them, then the TIF will generate less incremental revenues and the ownership group will be forced to cover any expenses where the anticipated TIF revenues fall short.
The Jefferson County Attorney's Office has provided answers on some questions raised by Metro Council members.
The Office of Management and Budget has also responded to a letter sent by Councilwoman Julie Denton with issues raised about the Soccer Stadium Project.
On Tuesday October 3rd, the Pegasus Institute came to the Labor & Economic Development Committee to present a series of questions.
Follow the link below to see the questions and the answers to those questions.