Soccer Stadium Will Need Public Subsidy

The “Iron District” proposal to develop a complex of buildings near 6th and Michigan, including an 8,000-seat soccer stadium, hotel, apartment complex and 3,500-capacity concert hall, comes with a catch: it will need some subsidy from the taxpayers.

“We are still working on the capital stack,” said S.R. Mills, CEO of the Bear Real Estate Group, which is a partner in the development project, in a conference call with Urban Milwaukee. But he confirmed that there would have to be some public funding. “It’s a heavy lift, just because of the costs involved and overall benefit.”

He estimated the total cost of the entire project at $160 million, with about one-quarter of that — $40 million — needed to finance the soccer stadium.

“It’s the linchpin of the project, the key to making this project work,” he noted. “But all the parts work together very well.”

The soccer stadium portion of the development is being led by Jim Kacmarcik, the CEO of Kapco Metal Stamping and Kacmarcik Enterprises. Kacmarcik owns the Forward Madison men’s soccer team and is a minority investor in the Milwaukee Bucks. He previously owned the Lakeshore Chinooks, a summer collegiate baseball team based in Mequon.

“We think this market is long overdue for a soccer stadium,” said Kacmarcik. He said the planning for this stadium has been “well over two years in the making. We looked at the success of Louisville in building its stadium.”

While there have been soccer stadiums built strictly with private dollars, that’s happened in other countries where soccer is often the leading sport. In the U.S., soccer trails far behind football, basketball and baseball in fans and revenue and soccer stadiums are typically subsidized. The stadium in Providence is getting a $36 million TIF (tax incremental financing) and $10 million tax credit, with a recent request for more public funding. And Albuquerque and New Mexico were asked for $58 million for a new stadium for the New Mexico United soccer franchise.

This Milwaukee stadium would be smaller, for a lower-rung team, so presumably it wouldn’t require as much money. It won’t be a Major League Soccer team, the developers noted, but a team from a lower soccer division. The Louisville stadium, which Kacmarcik cited as a model, seats 11,600 fans and is home to the Louisville City FC of the USL Championship. The stadium was originally estimated to cost $45 million but costs rose to $65 million by the time of the groundbreaking, with the city contributing $15 million in net financing and the state providing a $21.7 million TIF.

Any request for a subsidy would come at a time when both the City of Milwaukee and Milwaukee County face huge structural deficits that may require major layoffs of workers in the coming years. When asked about this Mills said “we are very conscious of their financial situation” in its planning.

As for the proposed 3,500 capacity concert hall, it would be leased by Pabst Theater Group, run by Gary Witt, but how it would be financed and who would own it is still not determined. Mills described it as “a part of the overall development” and said that “several different possibilities’ are being discussed for its financing.

But this part of the project appears to be less important than the soccer stadium and hotel.

Kacmarcik pointed to the success of the Milwaukee Bucks and the “significant impact” of the team on Milwaukee and suggested a new soccer franchise could also be a boon to the city. “It’s going to surprise Milwaukee,” he predicted.