Mayor Joe Hogsett’s aspiration to make Indianapolis an appealing destination for a Major League Soccer team carries with it another lofty goal: Hogsett wants to build — and pay for — a new downtown stadium.

Hogsett acknowledged at an announcement last week that there are no guarantees. MLS may choose to not expand, and even if the league does try to capitalize on the sport’s increasing popularity and move into a new city, it could pass over Indianapolis.

Showing the ability to build a new soccer stadium, city officials said at the April 25 announcement, would give the city an advantage over other expansion candidates.

And even though it’s too early for cost estimates, one thing is clear: New soccer stadiums are expensive.

They aren’t as costly to build as NFL stadiums — Lucas Oil Stadium cost $720 million — but new soccer stadiums can easily cost upward of $300 million, said New York City attorney Alan Hoffman, who advises on financing for sports arenas.

Prices for MLS stadiums are also on the rise, he said.

With heftier price tags also seems to come more skepticism from the public. Hoffman said he’s seen popular opinion sour on the idea of using public money to build stadiums, no matter the sport.

“When you try to get public money, people don’t want to pay for a stadium to be built when they need money for roads and to fight crime and to pay for teachers,” he said.

That means it will probably take some convincing to get Indianapolis residents on board with their new stadium.

How other recent expansion cities paid for their stadium

Building a new soccer stadium to accommodate an MLS team doesn’t necessarily mean taxpayers are stuck paying for big development projects.

In Austin, Texas, which won an expansion team in 2019, the city gave the team public land for a stadium, which cost $260 million to build and was privately financed. The city retains ownership of the stadium, which is exempt from property taxes.

In St. Louis, also a 2019 expansion city, the ownership group behind St. Louis SC claimed a new stadium costing about $461 million would be largely privately financed. But the group’s redevelopment agreement with the city does allow the team to utilize special taxes.

The St. Louis Post-Dispatch reports the owners have received $5.7 million of tax credits and tax abatements worth $57 million. The city also recently OK’d a 1% tax increase on parking and purchases at the stadium to reimburse owners for the $23 million it took to clean up contaminated groundwater.

The idea of public funding for a stadium didn’t have much political support in the leadup to expansion, and voters in St. Louis narrowly voted down a proposal in 2017 to provide $60 million from a business use tax.

In two other recent expansion cities — San Diego and Charlotte — clubs are sharing an already-existing stadium.

San Diego FC, which will begin playing in 2025, has a 20-year lease with San Diego State University to use the school’s 35,000-seat stadium. The club will pay $200,000 per game through the first five years.

The stadium at SDSU opened in 2022 and hosts the school’s football team, but it also was built to support soccer.

That wasn’t the case in Charlotte, where the mayor committed in 2019 to putting aside $110 million in hospitality funds to make upgrades to an existing stadium.

Charlotte’s team plays in the same stadium as the NFL’s Carolina Panthers. The stadium underwent renovations to accommodate the soccer club, including a new playing surface.

How Indy’s new stadium would be financed

It’s too early to tell how much public money it would take to build a stadium for an MLS team, but the city already has one financing tool available thanks to state lawmakers.

The Indiana General Assembly passed a law in 2019 creating a professional sports development area (PSDA) to help fund a new stadium for Indy Eleven, the second division club that began playing in 2014. That came after years of lobbying from fans and club owner Ersal Ozdemir.

Now, Hogsett wants to use the taxing district to build a stadium that can house an MLS club.

The district would enable the collection of local and state income taxes, state retail taxes, and food and beverage taxes for the public portion of building the stadium.

A fiscal analysis on the plans for Eleven Park — the now-endangered development on the city’s near southwest side at the former Diamond Chain manufacturing site — estimated the district would capture $1.8 million to $2.5 million in local and state taxes to go toward debt service on the stadium project. The team owner would need to fund at least 20% of the project.

It’s unclear how much would be captured in a separate stadium development. 

There are two possible locations for the PSDA.

One is still at Eleven Park, which was supposed to house a new 20,000-seat stadium. But on the day Hogsett announced the city’s MLS dream, Eleven Park developer Keystone Group — whose CEO is Ozdemir — accused the mayor of walking away from the project.

The city also is planning to make available an alternative site for an MLS stadium at 355 E. Pearl St., near the city’s heliport and downtown transit center. The tax district would include more than 100 parcels in the surrounding area.

The city’s Metropolitan Development Commission has already approved the Eleven Park tax district and is set to consider the other district map during a meeting at 1 p.m. May 1 in the City-County Building.

If approved, the map would go before the City-County Council and return to the commission for final approval.

The state law authorizing the special taxing district specifies the city must have approvals by June 30. The city, along with an undisclosed ownership group for the MLS team, then would decide which PSDA to submit to the state budget committee.

Mirror Indy reporter Tyler Fenwick covers economics. Contact him at 317-766-1406 or tyler.fenwick@mirrorindy.org. Follow him on X @ty_fenwick.