Elk Grove City Council Set To Make Major Move on Soccer Facilities

September 22, 2015 | When the Elk Grove City Council  meets tomorrow night, the question the five councilmen will be answering will not...

September 22, 2015 |

When the Elk Grove City Council  meets tomorrow night, the question the five councilmen will be answering will not be whether or not to move forward with soccer facilities, but rather the scale of the facility.

The facility, which is planned for the 99-acre site on Grant Line Road that is currently outside of city limits and already has a majority of the councilmen's support, could have up to 16 soccer fields in one scenario, or 12 fields, an administrative-concession building and other amenities in another. 

The estimated cost for the fields-only facility is pegged at $40 million while the other scenario is estimated at $57 million.
Click to enlarge. 

When the council discussed the matter in January, the estimated cost was $110 million. That cost was much higher as Elk Grove Mayor Gary Davis still considered the city a contender in the war to attract a Major League Soccer (MLS) expansion franchise which would have required a 18,000-plus seat stadium. Since then, Elk Grove has been written-off by the MLS in favor of Sacramento's bid.

The report notes the city could still pursue a stadium and fairground option, but that would require the purchase of 58-acres from adjacent Mahon Ranch. In the city's annexation application with the Sacramento LAFCo for the 99-acre parcel, the 58-acres is designated as a future stadium and agrizone site.

The report to the council recommends an enhanced facility scenario noting it is "a differentiator in the eyes of competitive teams from all potential sports organizations and a necessary element to attract club, elite amateur, and professional play." The report further notes "annual debt service cost will exceed operating profit...under any financing structure for either scenario."

To fiance that shortfall, the report recommends the city use funds it is currently using for revenue neutrality payment to Sacramento County. Those payments, which started with the city's 2000 incorporation and are paid to Sacramento County, will continue to decline each year until 2025 when they will cease. Diminished annual payments in each of the next nine years will increase available funds to the city to use for this or any other municipal purpose. 

The report acknowledges that between 2020 and 2024 the revenue neutrality funds and operating income from the facility will be insufficient and the city's "General Fund will have to carry a subsidy for the facility." The report also notes its modeling takes a conservative approach and assumes no increase in assessed property values in Elk Grove, which if occurred, would result in higher revenues to the city. 

Other decisions the council will have to make will include how it will be financed, how revenue shortfalls will be handled and who will operate the facility.

Wednesday night's meeting starts at 6 p.m.


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Anonymous said...

Seems we have a problem here in the city. First, what remedy has the swim teams & their coaches come up with in covering the $9 - $10 million dollar shortage on the Olympic Aquatics Center? Second, the council needs to get all those soccer teams and their coaches to attend the meeting tomorrow night and see what their thoughts are on this project and how they can contribute to this shortfall. Just let all us taxpayers know where we can send our checks to cover the short fall and later purchase the additional property for the stadium & fairgounds. Checks in the mail......

I'm still trying to figure out how a Goodwill store will provide all those high-paying jobs Mayor Davis spoke about coming to our city. City needs to slow down in all these new costly projects, already having problems with our budget. Sinking further in debt and may never see the daylight. Have mercy on all us taxpayers, PLZ!

Bumbo said...

It is a sure bet that Gary Davis, Steve Ly, and the flipper Steve Detrick (what was Detrick promised, or better stated, what did the big contribution from Fabian Nunez buy) will opt to put us on the road to bankruptcy, voting for the stadium. Hard to say what Darren Suen will do.

So who has to step up to the plate here? Pat Hume! But does Hume, as Gil Moore would put it, have the “cojones” to say what needs to be said, “I will not be a party to putting my city on the path to financial ruin! Youth sports complex, “YES.” Soccer stadium, “NO!”

Bumbo said...

It is a sure bet that Gary Davis, Steve Ly, and the flipper Steve Detrick (what was Detrick promised, or better stated, what did the big contribution from Fabian Nunez buy) will opt to put us on the road to bankruptcy, voting for the stadium. Hard to say what Darren Suen will do.

So who has to step up to the plate here? Pat Hume! But does Hume, as Gil Moore would put it, have the “cojones” to say what needs to be said, “I will not be a party to putting my city on the path to financial ruin! Youth sports complex, “YES.” Soccer stadium, “NO!”

Anonymous said...

Soccer families wanted tournament fields and swim families wanted "water."
Mayor Davis dreamed bigger... MLS and Olympic swim trials!
Big dreams cost big money - beyond The City's means.
Years later, even the tournament fields and the "water" breaks the bank.
Wasted time, wasted opportunity.

Anonymous said...

The stadium is out of the conversation for now. $40M covers the tournament fields, $57M covers the tournament fields and a support building.
Regardless, this is more than we can afford. I'm hoping Councilman Hume will be the voice of reason. Councilman Detrick will fold like a deck of cards, as he has so many times before. Councilman Suen should take this opportunity to separate himself from Mayor Davis and the Puppet Councilman Ly but we'll see if he has the cajones. Smart money says that at least three of these guys will lead the residents down the road to debt.

Arnold Rothstein said...

The vote will be 5-0.

Follow me here - we all know Mayor Gary "Laser Focus" Davis, Councilmen Steve "The Flipper" Detrick, and Steve "Empty Suit" Ly are all in. That leaves Vice Mayor Pat "Consanguinity" Hume and Council Member Darren "I-go-along-to-get-along" Suen.

Note that the adjacent property is owned by the Mahon family, who like Hume represents the old-line Elk Grove establishment so he will buy in. That leaves Suen, who is quickly subscribing to Region Builders group think and cash that strangles anything that resembles smart growth in our city or region. Count him in too.

The only question is whether it will be the $57 or $40 million price tag, and my book says it will be the bigger facility. Much like the Freudian idea of substitution, bigger is better with these men.

Familiar with the Black Sox? Trust me, the fix is in.

Warren Buffett said...

First things first. The city needs to spend a couple more million bucks on the design and engineering, just to be able to put it out to bid to see if an operator is interested. Remember the water park?

Connie said...

To Anon at 14:41: I saw it as well. You have to read City Manager Laura Gill’s staff report very closely. It is a bit confusing.

Page Three states: “Attachment 3 shows a full-build concept diagram for the site, which includes potential future phases of development, as well as projected land uses for adjoining lands as requested by LAFCo.” And then it goes on to state, “The Mahons have approached the City with interest in partnering for a stadium/amphitheater and other elements.”

New words that have come up now are “event center, “indoor sports complex,” and “flexible event space.”

If I read the paragraph correctly, it is Attachment 2 which shows the “full built concept” including a stadium/amphitheater, as does Attachment 4.

Attachment 3 only shows the 16 soccer fields and what appears other uses in the lower left hand corner of the diagram.

So it appears that the soccer stadium may not be discussed tomorrow night, but it is still in the mix.

So instead of hitting the taxpayers all at once, is the plan now to "phase" in the debt?

Proud to be led said...

I trust our City Council knows that soccer is a popular sport in the region and all these kids deserve a first class venue as part of their childhood memories! After all, in 20 years from now when these kids are all grown up, they can proudly boast that they grew up in Elk Grove and that their elected representatives were visionaries. That will give them some street credentials!!

Lynn said...

Good comments all.....lets see who is at the meeting wednesday. Wish I had my soccer uniform!

Anonymous said...

Phasing wouldn't be a bad thing. If done correctly, it could allow the city to achieve the big goal in affordable, yet substantial pieces. And, should any later piece become unaffordable or otherwise unattractive, the first pieces could stand alone and provide value.

But, even the fields alone (priced at $40M) is too large of a piece to afford.

We can't pay for it out of our pocket. (Although, if we could afford to pay for it in cash, it might make more sense to pay a large portion in cash but finance the remaining but that is not the case, anyway.)

If I'm reading the staff package right, using the Revenue Neutrality funds as an anticipated revenue source would commit the entire sum to these fields of grass.

Even WITH the Revenue Neutrality funds, the General Fund (or some other magical mystery fund) would need to fill the gap.

And, we've got an $8M ANNUAL shortfall on road maintenance.

And, what about that high dive / swim pool with a $6M deficit?

Bad idea... Take it back and come up with a better plan guys.

Anonymous said...

AND, I'm a bit surprised that no one caught the "natural turf" - aka.. Grass.

Understandably, grass is preferred by the commenting sports organizations. But, how are we going to water that grass? CSD struggled (mostly successfully) to keep our existing turf, trees and shrubs healthy during the water restrictions but now, we're going to put in acres and acres grass? AND, we have to borrow heavily to make it happen? It just doesn't make good sense.

Anonymous said...

"So instead of hitting the taxpayers all at once, is the plan now to "phase" in the debt?" That's a good one Connie. Anyone who can count past three, knows that is still debt that's in our future.

The city still hasn't learned how to Google. If they had done their Market research they would have found that Roseville is building a hugh soccer complex...for some reason that was not on the cities list.

Anonymous said...

Previous posts muddled the issue a bit so a correction is required.

According to the staff package, the recommendation is to issue debt (aka, "borrow the money"). How will we pay it back? Using two two revenue streams; the first is Operating Funds and the second is the Revenue Neutrality Benefit (RNB)

When looking at Table 4: Annual Operations Summary and Sales Cost, Revenues... A head scratcher is the "New Sales Tax & TOT." I wouldn't argue that the roughly $600K could be generated but it doesn't seem appropriate to classify it as an Operating Revenue of the Project. Would it be realized by the city? Perhaps, but it would seem to be a revenue to the General Fund.

But, let's assume that is categorized correctly and the Net Revenue Excluding Debt Service is ~$500K annually (ref Page 8 of 15)... We would still need the second revenue stream, RNB, to pay the rest of the debt.

If one recalls correctly, the RNB is a revenue share we gave up to Sac County when we became a city 15 years ago. So, now, in FY2018/19, we'll start receiving more and more of that share back into city coffers each year.

When you read the package, the RNB will be "the backstop" to any shortfall. Using these projections, ALL of the RNB received from FY18/19 until 2026 (~8 years and ~$20M) will be used, with an additional $6M over the remaining TWENTY years.

Further, one must note the cautionary language on Page 11 of 15, Para 1... "The combination of delayed debt service through capitalized interest and the aggressive ramp up of payments make this an atypical transaction that does carry more risk to the City’s General Fund than the typical municipal borrowing."

Is this project WORTH 30 years of risky debt?

What other more important things could we be doing with $20M over the eight years? Is a field of grass really the most important priority we have in the city? If so, then maybe its worth it. But, as someone mentioned previously, we have that $8M road maintenance deficit. We've got other civic amenities (aquatics) that have grossly underestimated costs. We've got virtually no Arts program.

No matter how the vote goes, the priorities will be displayed clearly tomorrow night.

Anonymous said...

Anonymous 17:14...
Page 6 of 15 says, "Placer Valley Sports Complex Inc., in partnership with the City of Roseville, has announced their plans to construct an 8 to 12 field all artificial turf complex with construction planned to begin in the fall of 2016."

Warren Buffet said...

I believe that our city leaders are as qualified as private sector CEOs and all have MBAs from leading educational institutions. I trust that the ice rink deal, the civic center architectural contract, the waterpark contract, the state office subsidy, the E-Tran bus system, and the weeds growing up through the cracks in the pavement are just rare exceptions to their glowing track record. I trust that the LOCI software program used to crunch the numbers used in the staff report will persuade the bond underwriters that our revenue bonds are worthy of a low interest rate. I'm not a soccer player or a high-dive athlete, but I don't mind paying to subsidize those who are.

Anonymous said...

Warren Buffett...
You're using "Proud to be led" lines. You must be mixing your nom de plumes.
Thank you,
Phillip Mamouf-Wifarts

Elk Grove News said...

Video - Honest Gil Fulbright For President


Video - Honest Gil Fulbright, aka Phillip Mamouf-Wifarts, unsuccessful 2014 run for Senate


Watch for a good laugh because they are true.


Anonymous said...

How can the city move forward with a costly project when the information is scarce, vague, inconsistent and incomplete? The Olympic Aquatics Center is still on the table with no answer as to how it will be built or financed and yet they throw another hugh project out there with even less information. That should scare the he*@ out of every taxpayer in this city. It's time to call a halt to this playing of games with the people.

Anonymous said...

Finally, transparency from our local electeds.

The city has requested every level of local soccer in our city cancel practice and be present at city hall for the vote on the soccer fields, kids in uniform in tow.

Gee, I wonder how they'll vote under these conditions?

I vote to go ahead with the sports fields program will undoubtedly garner support for the political future of the incumbents and work as a great soundbite in the next election cycle.

A vote to put off the fields until it is reasonably prudent and can be penciled out as at least "revenue neutral" in front of all these soccer families may result in less than positive perception by the citizens present and (perceptually, to short-sighted politicians) have a negative affect at the next election cycle.

The city's stance on this issue is crystal clear, totally transparent. It will be approved and the council will be lauded and fawned over for their actions by those present. Unfortunately, the majority of the city's qualified voters will NOT be present and will NOT argue for fiscal responsibility. These guys are all about the "ego" and tonite they'll be heros to the long-term detriment of the city as a whole.

- That's what it's all about.

FYI- Recall the German masses supported Adolph Hitler in the early 1930's as he led a resurgence of his people's pride and self-confidence, created jobs, the nation prospered, and look what they got.- Not that anyone on the council is Hitler, but just sayin.'

Anonymous said...

I am going to put my dog on the next ballot for city council.

At least he is noble and true to the people.

Sheik Yerbouti said...

Elk Grove is becoming a Regional Joke.

A true dumping ground for stupid ideas that other cities reject.

Anonymous said...

Why should we pay for a soccer stadium for all those self entitled soccer kids?

Guess pandering to the soccer moms is an effective way to ensure reelection.

Anonymous said...

Somebody should contact the Piranha's and let them know EGYSL is jumping in front of them in line. Based on the figures I've seen and how the city calculates "increased sales taxes" there's no way we can afford both of these projects. I'd love to see them show up in their swim caps tonight and say "what about us"?

Anonymous said...

I have been DYING to hear someone—anyone throw their hat in the ring. I'm so desperate that I would seriously consider voting for the dog! Please, the only way out of this mess is to dump this disastrous city council.

Anonymous said...

Pay, pay, pay, build build build. Elk Grovians pay for it and we'll come and use it. :))))))))

Anonymous said...

I watched the meeting online last night. When the four council members came out and said this project needs to be cost neutral Mayor Davis went into full whiny entitled child mode. Saying something to the effect...but these projections don't account for the mall and that mall better get built. He also mentioned once it's paid off then we'll have the revenue neutrality money available. Yeah, in how many years? 30? And what type of upgrades will a 30 year old facility require.

I was very impressed with Ly and Suen in particular as they've often been accused of being a puppet of Mayor Davis. Clearly last night Davis was not getting his way and was acting like my 3 year old that wants something I can't afford to buy them. Pathetic.

Anonymous said...

I also watched last evening and found our Mayor a little pathetic. It's very clear he does not show maturity, good judgment and financial sophistication.

Anonymous said...

I think Hume came out of the gate with such a strong point it changed the tenor of the meeting. Suen and Ly had little choice but to recognize the logic of his reasoning. Still, it appeared Ly was still trying to find a way to go along with the mayor.

Anonymous said...

As someone who has had a family member involved in soccer and attended many games I find it rather surprising that I didn't hear any of the coaches or parents of players comment on the costs to the city and the costs to them as users of the facilities. Surely they must have reviewed the plans and wondered if this was a feasible plan for the city to undertake. Perhaps they could have even put their heads together and have come up with a new way to make this work for our kids if it didn't work as presented. My thinking is that any time you have a community work on a project as a whole we all come out as winners in the end. Much as we do as a family, we know what our wallets hold and plan/spend according to that. Not some pie-in-the-sky dreams that make our kids smile.

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