Raleigh soccer stadium could compete with Marbles, Art Museum for hotel tax money

The chances of taxpayer money going to a proposed soccer stadium in southeast Raleigh may have just gotten smaller.

Raleigh and Wake County managers didn’t include money for the stadium on their list of recommended projects Wednesday.

But the list did include millions of tourism dollars for PNC Arena, the Raleigh Convention Center and a new indoor sports complex yet to be located.

Now, instead of being recommended for a specific amount of tax dollars, North Carolina Football Club and N.C. Courage owner Steve Malik and Raleigh developer John Kane would have to compete for a share of another $42 million in tourism money. Likely competitors include community organizations like the Marbles Kids Museum and the North Carolina Art Museum.

It will ultimately be up to the Raleigh City Council and the Wake County Board of Commissioners to decide which organizations and projects get money.

Earlier this year, Malik and Kane asked the city and county for $330 million — $11 million a year for the next 30 years — to build a stadium and entertainment complex south of downtown.

$42 million pot

In addition to the projects named Wednesday, the Raleigh and Wake managers recommended $42 million be spent over six years on “medium projects.”

If approved by the elected leaders, local groups would compete for a portion of that money. Several groups have already submitted projects to provide an idea of what could be requested, including:

It’s unlikely the city and county would give the entire $42 million to just one project, said Assistant County Manager Denise Foreman. The proposed soccer stadium could cost anywhere from $150 million to $300 million.

“If (the stadium) was a minimum $150 million project and they were able to compete and get awarded all of the funds — which I think would be really hard to do — then they (would) still have a gap of $108 million they would figure out how to fill,” she said.

The city and county would have to create a process for organizations to apply for that tourism money. Wake County already has a $4 million “small projects” fund, which caps projects at $1.5 million. Elected leaders would have to decide if they want to cap projects in the “medium projects” fund, Foreman said.

Malik was not available Thursday. NCFC released a statement Thursday evening, saying the recommendation wasn’t surprising given they “haven’t yet officially disclosed our new downtown site, the economic analysis or the net positive benefit to the city and county.”

The exact site of the stadium and what could be built around that stadium will be revealed next week during an event at Kane Realty’s Dillon tower. The group has focused on land off Penmarc Drive near the the crossing of Interstate 40 and South Saunders Street, the N&O has reported.

Malik has said the potential development of the 40-plus acres in Southeast Raleigh for a sports stadium is not contingent on the club landing a Major League Soccer franchise, The N&O has reported.

Convention Center, PNC Arena

The tourism money comes from Wake County’s room occupancy and prepared food and beverage taxes.

That money can only be spent on tourism-related projects. The tax is expected to generate $62 million next year but some must go to the Greater Raleigh Convention & Visitors Bureau and the Centennial Authority, PNC Arena’s governing body and landlord.

The biggest chunk of the tourism money — $29.2 million — could go to the Raleigh Convention Center for improvements and a future expansion. The managers’ proposal includes $15 million to buy nearby land next year.

PNC Arena would get $8 million per year until at least 2034 for arena enhancements. The total project could cost about $200 million, but could include a rooftop bar, new restaurant and more “income-producing spaces,” The N&O has reported.

The Raleigh City Council and the Wake County Board of Commissioners will hear the managers’ recommendations in July and could make a decision later this fall.

Anna Johnson covers Raleigh and Wake County for the News & Observer. She has previously covered city government, crime and business for newspapers across North Carolina and received many North Carolina Press Association awards, including first place for investigative reporting. She is a 2012 alumna of Elon University.
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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.