The renderings are grand. But what is Raleigh’s Downtown South without a sports arena?
The renderings are grand.
A 20,000-seat, open-air stadium off the interstate, downtown Raleigh’s skyline illuminated in the back.
A pedestrian bridge connects the stadium to bars, hotels, apartments and offices. Children can play on public soccer fields.
A $2.2 billion southern gateway with the potential to rival downtown in size.
The vision helped Downtown South developers clear a big hurdle in late 2020, when the Raleigh City Council approved a rezoning to transform the 140 acres of mostly vacant land, with some businesses scattered about.
Now, over a year later, construction is set to begin on the first phase of buildings, while the future of the stadium is in flux.
And that uncertainty begs the question: What does a planned sports and entertainment district look like, and mean for the city, without a sports arena?
John Kane, the developer behind transformational projects like North Hills and the Dillion, is partnering with tech entrepreneur Steve Malik, who owns the NC Courage women’s and North Carolina FC men’s soccer teams, to create this new city destination.
“We’re still looking at an array of restaurants and entertainment opportunities,” said Bonner Gaylord, chief operating officer of Kane Realty. “And the sports piece is a question mark of how we get there, but it’s still (part of) our plan.”
What is the developers’ vision?
Create a district, not a development.
It’s one of the four tenets Downtown South’s developers have touted as their guiding principles.
“Developments are fixed and final,” according to Downtown South’s promotional materials. “They are planned with a particular person in mind to achieve a particular lifestyle. Districts are living, breathing places, they have permission to change, evolve and grow with a city.”
But Downtown South has been promoted as a sports and entertainment district: hotels, offices, shops, restaurants and apartments all anchored by a stadium. It was a driving talking point among supporters during the 2020 rezoning process.
“Without that entertainment and sports venue, everything else withers away,” Gaylord said during the 2020 public hearing. “Without a stadium, the project would be much lower density. Likely have more surface parking. Less walkable, less everything. And it would not be the vision we have laid out and we believe the community deserves.”
After missing out on tourism tax funding for a stadium and finding little appetite for public financing, it’s now the developers’ job to make a district the “best it can be without a stadium” even though a stadium is still the desired outcome, he said.
“So we will be creating a walkable environment,” Gaylord said in an early January interview. “And we’ll be creating a new district for the city of Raleigh that we all can be proud of. And a stadium will make it that much better and that much more engaging for the citizens of Raleigh.”
Developers will “abide by and honor” all of the promises made in the zoning conditions, he added.
“The opportunities beyond those conditions were predicated on additional public-private partnerships,” Gaylord said. “And there are components that were discussed that won’t be realized without those public-private partnerships. But everything that was committed to and promised through the rezoning will be realized.”
There are likely soccer fans who are disappointed, he said, reiterating that a stadium is still in the long-term plan.
“We would love to be further in the conversation about a stadium at this point,” Gaylord said. “However, the rezoning was absolutely necessary to be able to even talk about a stadium, so this is a stepwise process and these things don’t happen fast. We’re continuing to move towards a stadium, and we would love to see it happen more quickly.”
The land set aside for the stadium won’t sit empty forever, however, and the right offer for the space could result in some “tough decisions,” Gaylord said.
“There’s no specific date at which point we would pivot to a different plan,” he said. “However, that could be forced upon the development team by outside factors at any point in time. So it’s really a question mark as to when that will happen. But it certainly will happen at some point.”
How did the City of Raleigh get here?
The 140-acre project site sits between South Saunders Street, South Wilmington Street and Interstate 40.
Since Malik first proposed a 22,000-seat downtown soccer stadium in December 2016 in an attempt to land a Major League Soccer expansion franchise, the idea has gone through several iterations.
The first, to be built with $150 million in private money on state government land south of Peace Street and east of Capital Boulevard, proved to be too logistically complicated.
In early 2019, Malik and Kane Realty announced a partnership to build the stadium as part of the proposed Downtown South development. That stadium hinged first on $260 million in tourism tax money over 20 years and then $330 million over 30 years to construct the stadium. The soccer teams mobilized the mammoth NCFC Youth soccer program to garner public support.
But in July of that year, the stadium was left entirely out of the latest round of tourism tax allocations, which went to the Raleigh Convention Center, PNC Arena and other projects.
Another $46.6 million that would have gone to “medium” projects like Marbles and the North Carolina Museum of Art, and could potentially have included partial funding for a stadium, was removed from the final 2020 agreement between the city and county because of the pandemic. The stadium partners filed a proposal requesting an “unspecified” amount of money for a $180 million stadium with Wake County before the bidding process was canceled, according to county records.
“At this point, we do not have any updates from the club perspective,” NCFC/Courage spokesperson Megan O’Keefe wrote in response to a query from The News & Observer seeking comment for this story.
What happened to the pro soccer franchise?
In 2019 the Triangle found itself out of the MLS equation when billionaire Carolina Panthers owner David Tepper was awarded an expansion franchise in Charlotte that will start play this spring.
That was one of four teams MLS added — along with Cincinnati, Nashville and Austin — to get to 28. St. Louis will become the league’s 29th franchise, and Las Vegas is expected to be the 30th. While the league could still potentially expand to 32 teams, it is not believed to be interested in a second team in North Carolina.
“While we are currently focused on a 30-team league, there is more demand for clubs than we have supply, and we play in two large countries that can certainly support a top-flight league of more than 30 teams,” MLS spokesman Dan Courtemanche said in an email. “We encourage soccer fans in Raleigh and the Research Triangle to attend a Charlotte FC match in 2022.”
Financing aside, there’s now also the question of whether a 20,000-seat stadium — absent an MLS team — is truly necessary given the presence of the existing 10,000-seat stadium at WakeMed Soccer Park in Cary, which has become the annual home of the men’s or women’s NCAA soccer championships — and, in the spring of 2021, both.
While a new stadium near downtown could attract concerts, conventions, football, festivals and other events, the NC Courage and North Carolina FC would be the anchor tenants. Both teams have averaged fewer than 6,000 fans per game in recent seasons.
At the end of the 2019 season, coming off two National Women’s Soccer League titles in a row, the Courage could legitimately claim to be the best women’s soccer team in the world. But the Courage was not a finalist in either of the league’s cup competitions during COVID and lost in the first round of the 2021 playoffs.
The franchise has also lost star players like Abby Dahlkemper, Crystal Dunn, Jessica McDonald, Sam Mewis and Lynn Williams and was caught up in an international controversy when coach Paul Riley was fired after allegations of player abuse at a previous coaching stop came to light in September.
The Courage averaged 5,036 fans in 2021 at WakeMed Soccer Park. In the two seasons before that, the Courage averaged 5,875 fans per game in 2019 and 5,129 in 2018.
NCFC averaged 4,118 fans in 2019 and 3,515 in 2020 playing through the pandemic. In 2021, NCFC also dropped from USL, the second level below MLS, to the third tier and averaged 1,741 fans in USL League One.
What happened to the tax increment grant financing?
Absent tourism tax money, Kane next pursued a “tax increment grant” from the city to finance the stadium with future tax revenue. The grant, also called a TIG, would be the first of its kind for Raleigh.
Meanwhile, opponents of the project’s rezoning asked for additional guarantees of public benefits before the City Council vote. They were successful but were also counting on additional protections coming through negotiations for the TIG.
“Downtown South does not exist in a vacuum,” the Rev. Jemonde Taylor said in a recent interview. “The (idea) that the development does not displace anyone on site is true, yet untruthful.”
“It is true in a sense that no one, or very few, will be displaced on property, but untruthful in its statement that there is no impact,” Taylor continued. “You cannot build a 38 million-square-foot development that is larger than downtown itself and not expect to have impact.”
Taylor is the rector of St. Ambrose Episcopal Church and a member of ONE Wake, a coalition of faith congregations and nonprofits. ONE Wake rallied for more protections against stormwater runoff and gentrification and for more affordable housing units and workforce development.
Raleigh leaders say they remain in favor of Downtown South regardless of the outcome of the stadium.
“This rezoning allowed us to better protect downstream neighbors, water quality and water quantity vs allowing the site to be developed by right,” Councilmember Nicole Stewart wrote in a text message to The N&O. “The rezoning came with a number of other benefits as well, including much-needed amenities, diverse housing options and jobs all on a future (bus-rapid transit) line.”
At the time of the rezoning, the city didn’t have a TIG policy. The city approved a policy after the rezoning, but no developers applied and by last November, Kane executives admitted the city and community had shown little interest in using one for Downtown South. The developers announced at a community meeting they were no longer actively pursuing that financing method.
“The stadium is in our long-term plans,” Gaylord said during that virtual meeting. “We don’t have a clear pathway to get there. However, it’s absolutely our long-term goal.”
Afterward, Raleigh Mayor Mary-Ann Baldwin said she was still committed to a stadium in Downtown South.
What will be built first at Downtown South?
Despite the stadium setback, construction on Downtown South’s first phase will begin this year. Site plans have been submitted for two of the seven buildings in that phase.
“A number of catalytic projects are planned in this area just south of the Central Business District, in addition to those we are shepherding,” Kane said in a news release. “Demand remains high for housing, office and retail options in Downtown Raleigh, but with growth limited to the west, east and north, downtown’s natural progression is south.”
The first building is a 180,000-square-foot speculative office building with six levels. Shared and private terraces are planned for multiple floors along with a “collaborative work lounge,” social spaces, multiple conference rooms and 14,000 square feet of ground-level retail space.
It will be the city’s first mass timber construction.
Hailed as a low-carbon alternative to concrete or steel, mass timber is softwood stacked in layers on top of each other to create thick slabs. These large slabs, glued and pressed together, can match the durability of concrete and steel and have been used in Europe since the 1990s. The large wooden beams are left exposed, and the Downtown South building will have exposed wooden ceilings as part of its construction.
The second building is a 280-unit, mid-rise building with studio, one and two-bedroom apartments, ground-level retail, a parking garage, two terraces, a rooftop lounge and “large central outdoor space.”
Construction on those two buildings could end by 2024 with the first phase completed in 15-20 years.
What kind of stadium does the Triangle need?
The executive director of the Greater Raleigh Sports Alliance said the Triangle has a glaring need for less ambitious sports facilities.
Cary has been trying to build a $193 million multipurpose facility that includes a 4,000 seat arena and could also accommodate 12 basketball courts or 20 volleyball courts as well as esports. But funding for that project was pushed back because of COVID and the preferred site — the former Cary Towne Center mall — was snapped up by Epic Games. The Town of Cary is currently negotiating to locate it at the South Hills redevelopment, Cary parks director Doug McRainey said.
“That would do business 52 weeks a year,” GRSA executive director Scott Dupree said. “And it would be basketball, volleyball, esports, high school sports, youth sports. And right now when people come to us needing that kind of venue, we don’t have it.”
The Raleigh Convention Center can be configured for some of those events, but it lacks the arena component and availability can be an issue. Dupree said there’s also a need — statewide — for an indoor track facility.
Downtown South developers have discussed a stadium that could have less capacity initially and be built up. That stadium could be pursued through a public-private partnership.
“While there’s an ultimate goal for a stadium that Raleigh deserves, there also are opportunities to get there in phases,” Gaylord said.
There is no circumstance where Malik and the soccer teams aren’t part of the equation, he said.
This story was originally published January 19, 2022 at 6:00 AM.
