The always-entertaining Houston real estate blog, Swamplot, provided this post last week with typically pretty pictures from a KHOU-TV video of the long-proposed soccer stadium for the Houston Dynamo MLS soccer team.
Have we really been talking about this for almost two years now?
At any rate, now that the City of Houston and Harris County have committed a total of $25-30 million to the deal, and the City is on the hook for millions more in infrastructure improvements, Dynamo management is publicly representing that it is prepared to contribute another $80 million to build the stadium.
Now, I’m never seen the Dynamo’s financial statement, but my guess is that it generates between $10-15 million in revenues. Maybe that increases by 30-40% if the club gets its own stadium. A nice small business, but . . .
In these lean economic times, what bank is going to take the lead in loaning $80 million to a business that would have to dedicate a substantial amount of its revenue base just to pay debt service on the loan?
Is this a bankable deal? Or just pie-in-the-sky absent the local governments coughing up substantially more dough?
Inquiring minds want to know.
If you put any store in these things, in August, Forbes estimated their revenue at $10m here, with an estimated loss of $1.8 million. Looking through the list, apart from Columbus, teams with a soccer specific stadium generate around $15m, which I think is a realistic number for the Dynamo. I enjoy attending Dynamo games and would probably attend more if they were in their own stadium but I don’t see this getting done during the great depression of ’09.
Not only is there no way that the Dynamo will be able to meet their capital contribution, there is no way the stadium will generate incremental tax revenues sufficient to justify the expenditure of public money.
The stadium will not seat any more fans than Robertson. There is no reason to expect that Dynamo fans are willing to pay higher ticket prices to see the Dynamo in a new stadium. Any additional revenue streams dedicated to the Dynamo (parking fees, share of concession profits) will be siphoned off to the Dynamo head office in Los Angeles to cover operating expenses.
We will not see additional tax revenues, profits will be siphoned off to stimulate the economy of Los Angeles and, at the end of the day, for the money they want us to spend on a new stadium, the City and County could go in and buy the entire damned team.
There is ZERO economic incentive for public money to be spent on a new stadium for the Dynamo. ZERO.