BRADENTON, Fla. While it isn’t the biggest project in Orlando, Fla.’s planned financing early next year that could reach $304.5 million, a major driver of the deal is a new Major League Soccer-ready stadium.
The contribution of $20 million in tourist tax revenues by the city and surrounding Orange County toward the $85 million stadium was the final funding element expected to land the popular Orlando City Soccer Club one of four expansion franchises being offered by the MLS through 2020.
“We’d like Orlando to be the next team that we add,” said MLS president Mark Abbott.
The overall bond financing will move ahead a recession-delayed plan to provide $152 million for upgrades to the Citrus Bowl stadium to keep it competitive for the changing landscape of bowl games and other sports, and as much as $132.5 million to complete work on a performing arts center.
The Citrus Bowl, whose roots go back to 1936 as a Works Progress Administration project by President Franklin D. Roosevelt, and the arts center are two of three “community venues” projects the city and county have worked on for many years.
The third venue a $487 million arena for Major League Basketball’s Orlando Magic now called the Amway Center opened in the fall of 2010.
The new money bonds, secured by portions of the countywide tourist development tax, could be sold as early as the first quarter of next year, according to Rebecca Sutton, Orlando’s chief financial officer.
Bank of America Merrill Lynch and Citi will be co-senior managers on the deal.
Public Financial Management Inc. is the city’s financial advisor.
Other finance team members have not been appointed, and the structure of the bond deal has yet to be determined.
The city is considering a provision to provide some credit support for the tax stream, said Sutton.
In fact, tourist tax collections are rising but low interest rates and potentially lower construction costs are not driving the need to move forward with financing the venues or adding the soccer stadium to the list of projects.
“We have to balance the timing [of the bond financing] with the need for the facilities,” she said. “In the case of the Citrus Bowl, the BCS [Bowl Championship Series] is changing to a new process and we have to compete for bowl games.”
While $10 million in interim improvements were done in the past few years, the bowl will get new club seats and suites as well as banquet space, enhancements to locker rooms, restrooms, and other facilities and upgrades.
“For us it’s all about tourism, and we’ve got to keep the events going so we attract tourism,” Sutton said. “We want to maintain our position among significantly less bowl games.”
Some of the improvements will also enable the Citrus Bowl to vie for events during slower periods of the year like August and September.
The funding for the arts center will provide for the completion of the project, including construction of a hall for the Orlando Ballet and Orlando Philharmonic.
It is the fast-growing worldwide popularity of soccer, however, that is driving the other reason for moving the financing forward.
The sport has attracted so many fans to central Florida the Orlando City Soccer Club’s Lions shattered an attendance record in September by drawing more than 20,000 fans to see the team win its second USL PRO championship in the Citrus Bowl, which is not a soccer-specific stadium.
In addition to the $20 million in tourist tax revenues to provide partial financing of a new $85 million stadium, Orlando is paying another $15 million for the land and nearby Seminole County contributed $2 million.
The stadium, which will also be used for other events such as concerts, will complete a sports and entertainment corridor downtown, Orlando City Soccer Club President Phil Rawlins told the Orlando City Council in early October.
“It’s always been our goal since we announced the team about three years ago to bring a major league franchise to the city,” he said before the council approved allocating the tourist tax revenues to the bonds.
The Orange County Commission sealed the deal with its final approval last week.
The Lions’ owners aim to follow the paths of teams in Seattle, Portland and Vancouver, B.C., in being promoted from the lower-tier USL to MLS, where the three northwestern teams are among the league’s best-supported.
When the Orlando City team was launched in 2010 to begin playing in 2011, Rawlins said there were meetings with MLS officials to provide a “road map” toward obtaining a franchise.
One necessary component was proving that central Florida offered a market place for the sport.
“We’ve done that with attendance,” he said.
Now that the sport is gaining in popularity in the U.S., the number of minor league teams around the country vying for an MLS expansion franchise is growing.
However, there are no MLS teams south of Washington, D.C., or east of Houston.
That creates a “vacuum” and an opportunity for a franchise in the Southeast to be named.
But even in the region competition is stiff.
Tampa wants a franchise and south Florida area has two prospects interested in one, including retired England star David Beckham who reportedly chose Miami for the location of the discounted franchise he was offered by MLS, according to Reuters on Wednesday.
“We did not want to lose our advantage on soccer,” said Sutton when asked why the city was intent on moving the financing forward at this time. “If we had waited then we probably would have lost the franchise to some other location.”
She said the city has worked on the stadium deal with the team since it was founded three years ago partly because it offers a family attraction and it made good business sense.
“A year ago, I’d never been to a soccer game and now I’m an absolute fan of it,” Sutton said, noting that an added attraction to soccer is that one team owner, Flavio Augusto da Silva, is from Brazil where the sport is wildly popular. “It’s just an economic and cultural bridge to south America, which we think will be beneficial to our tourism community.”