Is David Beckham a Soccer Team Owner or a Real Estate Developer?
David Beckham came to Miami about 5 years ago promising to bring an MLS franchise to the area. There has been excitement in soccer circles as well in Miami’s glamor society. Having David Beckham and his celebrity wife Victoria part of Miami society has been great for our community. Though MLS has awarded Beckham a franchise in Miami, Beckham has not had success finding a “suitable” site for his fledgling team to play.
Originally, Beckham envisioned a Bayfront stadium next to the Miami Heat’s American Airlines Arena. The site, Bayfront Park, is public land and is not available. Public sentiment is totally against another stadium on this land. Yet for some reason, all sports owners believe that open air stadiums need waterfront views to draw fans. Where teams are located on oceans, lakes or rivers, it seems owners clamoring for new stadiums always look to the waterfront sites first. The Miami Marlins originally tried for this site before settling on the old Orange Bowl site in Little Havana. Call me silly, but I go to a game to watch the game, not to look at the water. I can go to the beach for ocean views.
Next, Beckham targeted a site in Overtown, a few miles north of downtown Miami. He purchased 6 acres in 2016 for $19 million and has a contract for $9 million to purchase an adjacent 3 acres of county land, scheduled to close later this year. Skeptics think the Overtown site is too far from soccer fans. It is several blocks from I-95 and Metro Mover, has no parking and the neighborhood has not yet re-developed. But Beckham and supporters argue that the stadium will quickly spur development making it safe for fans to walk from Metro Mover to the stadium. This is another fallacy, particularly in Miami. Stadiums don’t automatically cause developers to come to neighborhoods. Marlins Park was also supposed to bring new development but in 6 years has had no effect on the surrounding neighborhood. The retail space incorporated into the stadium remains vacant. Though multi-family housing is now coming on line several blocks north of the stadium, the development along the Miami River is the cause of this development, not the stadium.
Last year, Beckham took on a new partner, Jorge Mas of Mas Tech. Mas made it clear that he did not like the Overtown site. Recently, local news outlets began to report that the team was looking at several sites and that one had risen above all others – Melrese Country Club, a city owned golf club near Miami International Airport. Plans leaked about 3 weeks ago and the Miami City Commission deferred action to put the plan to Miami voters in November until later this week. The new Beckham-Mas plans calls for the city to lease 70 acres to a for profit team ownership group for $3.5 million per year pursuant to a long term lease. Beckham-Mas would develop and build a 28,000 seat soccer stadium, 140,000 square feet of retail/restaurant space, 1 million square feet of office space and a $20,000,000 park, including soccer fields. Beckham – Mas would collect rents and estimate that the project would generate annual gross revenues of $465 million and annual gross taxes for the city, county and state of $44 million.
What started as an MLS soccer franchise in Miami for Beckham has become a real estate development. Is this the only way that sports owners can make money on their teams? Clearly it is the new model. 2 recent examples shed some light.
The Los Angeles Rams, recently relocated to LA from St. Louis, are in the process of building an 80,000 seat stadium to be shared with the LA Chargers. This stadium will be privately financed by Rams owner Stan Kroenke. The only governmental assistance will be from the city of Los Angeles which has agreed to reimburse Kroenke about $60 million in infrastructure improvements. The stadium, which sits on the old Hollywood Park Racetrack acquired by Kroenke, will include an entertainment district consisting of 8.5 million square feet of business parks and condominiums, a 6,000 square foot music and theatre venue, ballrooms, a multi-plex movie theatre, luxury hotels, high-scale restaurants, open air shopping plus the Hollywood Park Casino. In addition, NFL media, which includes NFL Network, Redzone and NFL.com will relocate to 200,000 square feet there. Clearly this deal was not about football.
The Atlanta Braves recently abandoned their 20 year downtown home, Turner Field, for the Cobb County suburbs, purportedly to be “closer to the fans”. However, Cobb County made the deal lucrative for the Braves, providing $40 million which was set aside for parks and floated $397 million in bonds to construct the new stadium. In addition, the Braves built a $400 million entertainment district and suburban park consisting of retail, restaurants and bars leading up to the stadium called Battery Atlanta. The Braves have also entered into a deal with Comcast to provide telecommunication infrastructure in Sun Trust Park. Comcast became an anchor tenant at Battery Atlanta, taking 100% of the space in an office building in the mixed use development. The Braves and Omni Hotels entered into a joint venture to operate a luxury hotel overlooking the ballpark. The Braves were successful downtown and the city and state just opened Mercedes Benz Stadium, home to the Atlanta Falcons and a new MLS franchise near Turner Field and Phillips Arena, home to the Atlanta Hawks. Clearly, downtown Atlanta is an ideal home to Atlanta sports. But the Braves saw other cash flow opportunities through real estate in the suburbs.
There are many more examples of sports owners and teams becoming real estate developers in all sports and at all levels of the game. So, David Beckham isn’t a pioneer here, nor has he lost his way. He is doing what he has to do to survive. Can soccer make it in Miami? Miami is a fickle town when it comes to sports. We support winners and don’t pay much attention when the home team isn’t winning. I know that soccer fans are a different breed, though I don’t watch the game. I think that is why Beckham and Mas are hedging the bet on soccer. But it isn’t really a hedge. The proposed development makes soccer seem like an afterthought and that is what the voters will be faced with if and when this is put on the ballot.