The Resident

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City expects dollars from proposed soccer stadium

By Stephen Baxter

A proposed stadium for the San Jose Earthquakes soccer team would reel in more than $62 million annually and create about 5,000 long-term jobs in the city, according to a consultant's report released in late February.

City officials cautioned that the cost-benefit analysis, which used data from new Major League Soccer stadiums in Chicago, Dallas and Kansas City, Kan., was rough and could change as details sharpen. However, San Jose chief development officer Paul Krutko indicated that the stadium would net more than $1.8 million for the city's general fund and add to the city's economy.

"The reason all the sports franchises want to be here is because we have the highest median income in the U.S. and the highest percentage of disposable income," Krutko said.

San Jose and Plano, Texas, have the highest median household incomes for large cities--more than $70,000, according to 2007 U.S. Census Bureau figures.

Oakland Athletics owner Lew Wolff and his partners, who plan to develop and fund the stadium, want city officials to convert 74 acres near Highway 85 and Monterey Road from light industrial to residential use in return for building the 18,500-seat stadium.

Converting the land would raise its value to $80 million, and money from its sale would finance the stadium.

However, city officials have indicated that if the 74 acres were converted from commercial use to housing, the city's general fund would lose property tax revenue that it would have generated. Property tax revenue would go to the San Jose Redevelopment Agency, which cannot contribute to the city's general fund.

In addition, if houses were built on the 74 acres near Monterey Road, the city potentially would have to pay for new parks, firefighters and police for new residents.

The proposed stadium would be built on the old FMC Corp. site at 1125 Coleman Ave., just south of Mineta San Jose International Airport.

Dan Gagliardi, president of the nonprofit Soccer Silicon Valley fan group, said Earthquakes supporters would draw more dollars to downtown restaurants and bars. Some fans of the San Jose Sharks hockey team park downtown, take shuttles to HP Pavilion for the game and return downtown for drinks or dinner, Gagliardi said.

"We have an opportunity to capture some of the dollars in our downtown," he told the city's Community and Economic Development Committee on Feb. 25.

The analysis conducted by SportsEconomcs LLC included four annual music concerts at the proposed stadium in addition to about 20 soccer games. It counted projected spending by visitors in town for a stadium event and excluded spending by residents.

Because of the proposed stadium's proximity to jets landing at the airport, Councilman Sam Liccardo and city staff agreed that sound testing should be done to ensure that concerts are viable.

Developers want to use land next to the proposed stadium for a hotel, offices, shops and restaurants, and a future Bay Area Rapid Transit station is planned near the site.

On the 74 acres near Highway 85, developers have proposed building up to 1,500 residences with an average density of 20 units per acre, according to city documents. In the consultant's analysis, the development would create the need for new classrooms to accommodate more than 420 students in elementary, intermediate and high schools.

The city staff's next steps are to develop a more detailed analysis by June and write an Economic Impact Report for December.