On Aug. 11, 2006, members of Real Madrid and Real Salt Lake stood with shovels in hand and posed for cameras with RSL owner Dave Checketts on the site for the new Real Salt Lake soccer stadium.
Smiles and handshakes were exchanged, and fans got the chance to see David Beckham overturn small plots of dirt near the intersection of 9400 South and State Street in Sandy.
Since that time–beside the numerous tests for underground and nearby pollution–little else has been done to prepare the site for the first phase of the $110-million, 20,000-seat stadium.
Among the many problems the brass for RSL face in getting started on the stadium project is a problem every new stadium venture faces–money.
Real Salt Lake claims that it has a good portion of the money necessary to start stadium construction, but the source for the remaining funds–which are estimated to be around $60 million–is still up in the air.
Rumored sources for the necessary funds to complete building projects have circulated throughout Salt Lake City all winter. Since RSL commenced its groundbreaking ceremony in August, several deals have emerged and fallen through.
Major sources for rumored funding have ranged from Community Development Agency funds in the Jordan School District, to the ownership of Real Salt Lake being split between Checketts and a financial arm of the global investing firm Goldman Sachs.
Despite all the issues RSL faces in procuring necessary funding for the new stadium, the biggest struggle is with Salt Lake County and Sandy City.
RSL is requesting $45 million from the local government for finishing the project. The majority of that money would come from appropriated hotel taxes, but House Speaker Greg Curtis claimed the project to obtain those funds is now “dead,” due in large part to the slow progress the new stadium project has already shown.
As it stands, Real Salt Lake can still receive city and county support if the majority of the nine city council members vote in favor of RSL’s stadium proposals. The biggest factor in getting approval from the City Council will be how it responds to a report that is being put together by the Los Angeles-based Economics Research Associates.
ERA is a sports consulting firm that evaluates the financial viability of a sports franchise or program. The main answer that Salt Lake County is hoping to get from ERA is that Real Salt Lake is a sound enough franchise to keep a soccer team in the Salt Lake area for at least the next 10 years.
The county will also want to know how feasible RSL’s financial plan will be once the stadium is built. Basically, what the county wants to know is if Real Salt Lake can not only keep a stadium running until at least the year 2018, but also if it can make enough profits to pay the borrowed money back to the county.
The preliminary reports from ERA indicate that Real Salt Lake may be a little too ambitious in its future financial expectations.
Among the discrepancies ERA came up with is whether the new stadium can put on the proposed 11 concerts a year–with each concert averaging around 17,500 people (which Checketts thinks is feasible).
ERA estimated this number to be closer to two or three concerts; the maximum it was willing to predict is six.
“We didn’t do this on the back of an envelope,” Checketts told The Salt Lake Tribune in response to ERA’s findings.
The bottom line is, ERA estimates that RSL will not be able to come out ahead, and in turn the RSL franchise will eventually fail, which could come back to adversely affect taxpayers in the end.
Curtis has estimated that if a decision is not made by mid-February, then county funds will no longer be an option for a new stadium.
That decision is so vital that if Checketts doesn’t get the answer he is looking for, “It will be very tough to keep the team (in Utah),” Checketts told The Tribune.
RSL is still scheduled to borrow the U’s Rice-Eccles Stadium through the year of 2007 and part of the 2008 season. Whether the team will be able to move into its new stadium as planned on July 4, 2008, is yet to be determined.
Whether RSL even exists, at all, will be decided within the next couple of weeks.