Pro soccer heads to Lansing — but at what cost?

FRIDAY, Oct. 19 — An “explosive celebration” scheduled for next Thursday afternoon will likely provide additional details about a professional soccer team slated to hit the field next year at the Cooley Law School Stadium. But information about the event — billed to be the “biggest sports announcement in Lansing in 23 years” — is largely unavailable to the public.

Mayor Andy Schor and Tom Dickson, the owner of the Lansing Lugnuts and the recently formed Lansing Ignite soccer team, will orchestrate the big reveal with “drinks and prizes” at 4 p.m. Neither the city nor the Lugnuts’ front office was willing to release any further information ahead of the upcoming event.

A Facebook invitation with an image of a soccer ball provides only a small clue about the citywide celebration. Everyone is invited. And it looks like local residents will just have to stop by for themselves to find out more.

Games are slated to begin in March. Tickets will range between $15 and $22.

Lansing’s City Council unanimously approved a 16-year licensing agreement with the newly created Lansing Soccer Club earlier this month. The club is owned and managed by the same folks that run the Lansing Lugnuts and owns the multi-million-dollar franchising rights to Lansing Ignite, the name of the soon-to-be soccer team.

The upcoming event could be an opportunity for Schor to formally announce a licensing agreement that, until this week, has been largely reserved for discussion at City Council meetings. Officials previously billed the deal as a multi-million-dollar boon to economic development.

“I see this as an opportunity to either move forward or to continue being afraid of our finances and sitting back,” explained Councilman Brian T. Jackson. “We won’t be able to grow at all without considering these investments. This will draw in people not only from the city but from all across the region.”

The deal, however, required city officials to pen a commitment to pay as much as $625,000 in marketing costs among other fees to promote the stadium. Additional expenditures, many of which were already inked into a deal with the Lugnuts, will also need to be funded over the course of the recently approved licensing agreement.

The city’s financial commitment, by the end of the agreement, could tally higher than $3 million. But officials maintain the investment will be well worth the return as soccer fans statewide converge on the state capital. Many of the costs were already being being paid to support the Lugnuts’ minor league baseball team regardless.

Some City Council members were hesitant to endorse the added costs, especially as they try to allocate financial resources to other priorities like police enforcement, unfunded pension liabilities and road repairs. But a desire for continued downtown economic development prevailed past some of the more vocal community concerns.

Council members, after multiple meetings to dissect the proposed deal, decided to greenlight the plan 8-0.

“We’re talking about bringing thousands of more people downtown on a regular basis,” said Councilman Peter Spadafore. “We can walk and chew gum at the same time. I think if we zero down our city budget just to pay off our unfunded liabilities, we could shut down government for 10 years and still not get that finished.

“We’ve got to keep doing things that will drive energy and development and excitement into this city.”

The team is slated to begin playing in the spring, running its season simultaneously with the Lugnuts and kicking off at least 15 home games at the stadium. The Lansing Entertainment and Public Facilities Authority will also need to subsidize sod conversions as the field repeatedly flips format from baseball to soccer.

Lansing Ignite will be a part of USL League One, an offshoot of the United Soccer Federation, and joins the ranks of other cities currently without a professional team and a population under 1 million — like Madison, Wisconsin, and Chattanooga, Tennessee. Rochester, New York, will also join the league in the next few years.

Nick Grueser, the president of both the Lugnuts and Ignite, spent hours going over the proposal with Mayor Andy Schor before the agreement hit the City Council’s agenda earlier this month. He didn’t return calls to comment for this story, but Schor emphasized how the deal simply had too much economic potential to pass up.

“We expect 70,000 people a year to come through and spend at least $100 per person,” Schor estimated. “That equates to a $7 million annual economic impact for our city. That’s people going to dinner or going to a bar afterwards. They might visit a museum or check out some other places around the city. That’s a lot of money.”

Schor also explained that the deal represented a fair “give and take” between the city and the team’s front office.

Grueser’s club agreed to pay several million dollars in franchising fees and more than $1.2 million annually for travel expenditures and other soccer-related costs. The players will also be paid about $350,000 a year, he told City Council. They also agreed to cover security, field preparation and grounds maintenance through local hires.

The city, however, didn’t escape the deal without costs of its own. Lansing is responsible for handling all major maintenance projects and food and beverage equipment, much like the existing agreement with the Lugnuts. City coffers will also cover the first $20,000 in utility bills for the first five years, splitting the costs thereafter.

Capital improvement costs baked into the agreement also requires the city to pay between $2.1 and $2.6 million over the course of the 16-year deal to keep the stadium in top operational condition. The previous deal with the Lugnuts, for context, had a lower minimum improvement cost set at between $1.43 million and $2.6 million.

“With a lease agreement or not, these appropriations happen every year,” said Council President Carol Wood. “I think the mayor has come up with some creative financing on this, and we’re looking at it, primarily, as a way to attract additional business and revenue into the community. I think the 8-0 vote shows how optimistic we are.”

LEPFA will also pay up to $150,000 to purchase equipment to transition between soccer and baseball and will reimburse the club up to $36,000 annually to complete the work.

Aside from the cash that fans will invariably spread across the business community, the city will also collect 6 percent of premium ticket sales. The deal, Schor said, ensures that Lansing keeps a vested marketing interest in filling the bleachers for every home game. When Lansing Ignite succeeds, the city piggybacks on those revenues.

Lansing also won’t have to allocate any marketing costs after the first five years, according to the agreement.

Still, local residents like Loretta Stanaway and Rejuvenate South Lansing’s Elaine Womboldt, opposed the agreement. The city is stretched far too thin and can’t afford to provide an added subsidy to a private enterprise while other issues like crumbling roads and code compliance concerns continue to pervade Lansing, they said.

Councilman Jeremy Garza said the deal was one of the toughest decisions he has faced.

Councilwoman Patricia Spitzley said she had “heartburn” over the marketing costs. Councilman Adam Hussain was also hesitant to endorse the plan but, like his colleagues, ultimately decided that the risk would be worth the eventual rewards.

“This is purely an economic development deal. We understand that,” Hussain said, noting additional broadcast revenues could also eventually drive up profits. “I don’t love the deal necessarily but we had some negotiation and some back and forth, and this particular group is really not in a position to give a whole lot more.”

Editor's Note: This story was corrected to accurately list other cities participating in the league.