The equation sounds simple enough: sports team plus fans equals successful stadium.
But the planning and calculation behind that equation actually involves a host of variables and considerations. For Mark McCullers and his team at Ohio-based McCullers Group, pulling all that together is their specialty.
Location, location, location
According to McCullers, at a fundamental level every stadium project begins with the first law of real estate: location matters.
He and his team are working with Greenville Pro Soccer LLC on the project to develop a stadium for the Greenville Triumph and Greenville Liberty soccer teams at Mauldin’s BridgeWay Station.
McCullers has decades of experience working with professional sports teams and managing the venues they call home. He said he has a special affinity for soccer and founded his company, in part, to remain an active part of that sport’s rapid expansion in the U.S.
He cut his teeth and earned valuable experience through overseeing the design of Crew Stadium in Columbus, Ohio, the first soccer-specific stadium in the country. With his involvement in what many people consider to be the spiritual home of soccer in this country, McCullers and the company he would subsequently found have become leaders in the field of stadium development.
With projects like the BridgeWay Station stadium under development or the recently completed Fifth Third Park baseball stadium in Spartanburg, evaluating a location involves a number of components.
“We’re in the experiential business, so it’s very important that we manage that experience,” McCullers said.
Part of that involves looking at the surrounding area and assessing what’s on offer — from restaurants and shops to parking and parks.
Aesthetics are also important, McCullers said. For instance, he added, “we don’t want the back of a grocery store facing the front entrance of our stadium.”
There are also considerations of ease of access and how stadium orientation will impact the fall of sunlight on both players and the playing surface.
A project’s location can also play a significant part in the other major consideration for a stadium: how to pay for it.
Making the numbers work
The hard truth of most stadiums and other sports venues is their profit margins are seldom robust enough to warrant financing entirely through private sources, McCullers said.
To ensure such projects are financially viable typically involves some sort of public-private partnership in which private capital is secured against some manner of public investment.
McCullers said one of the most common tools in this type of arrangement is tax increment financing, in which a municipality undertakes capital improvements in a designated area to spur economic development.
The idea is that such development will increase property values in the given area, thus driving up tax revenues. If the municipality issued debt as part of the project, that increased revenue is used to retire that debt.
McCullers said this approach works best when the value proposition is clearly understood and supported by taxpayers, their elected representatives and the private investors involved in the stadium project.
Part of building this support is helping everyone understand that a stadium is about far more than the sports team that may call it home. McCullers said successful stadiums and other venues incorporate and foster a sense of community identity and ideally become one of the chief focal points of community life.
That idea is at the heart of the McCullers Group motto: “Legacy projects. Community impact.”
Planning for nonsports uses is part of both ensuring the financial success and amplifying the community impact of stadium projects, he said.
Whether it’s a soccer stadium or a baseball park, a successful venue must generate revenue in the off season. This ensures that the stadium continues to draw crowds even when no games are being played, thus supporting the surrounding businesses and other attractions.
“We know that we are building projects that are generational in nature and that are going to have a unique impact on the community,” McCullers said. “At the end of the day, it is an asset that the community can leverage that has a strong value proposition, that justifies the public and private investment that’s required to make it happen.”
Greenville Triumph stadium snapshot
Public-private collaborations have become essential in developing sports stadiums and venues, and the project at BridgeWay Station that will be home to the Greenville Triumph and Greenville Liberty soccer clubs is no different. While final designs for the $80 million-100 million project are not yet complete, its general financial components break down as follows:
- About $45 million will come from private capital
- $10 million has been committed by the state of South Carolina
- $4.25 million in hospitality and accommodations tax revenue will underwrite bonds to support construction
- Hughes Investments, the developer of BridgeWay Station, has contributed the land upon which the stadium is being built
Good to know: Tax Increment Financing
Municipalities in South Carolina can use tax increment financing to make capital improvements in an area to stimulate economic-development projects like a sports stadium. The process involves the following steps:
- The geographic area for development/redevelopment is defined
- The municipality creates a development plan for the area
- The area is officially designated as a TIF district
- The municipality may authorize debt (i.e. bonds) to fund the infrastructure improvements identified in the development plan
The increased tax revenue, called the tax increment, is used to repay the debt, if any.
