Portland soccer team to finance stadium upgrades, but pay no rent for 10 years

Portland United LLC has committed to at least $1 million in facility upgrades to Fitzpatrick Stadium. Under a lease agreement with the city, construction would start on July 1, 2024. Derek Davis/Staff Photographer

A new professional soccer team will use Portland’s Fitzpatrick Stadium rent free for 10 years in exchange for at least $1 million dollars in club-financed capital improvements to the city-owned facility.

The lease agreement between Portland United LLC and the city of Portland was approved unanimously by the city council on Monday. The lease begins Feb. 1, 2024, although the team doesn’t plan to play its inaugural season in United Soccer League One until 2025. The agreement was reached after nearly three years of negotiations and reflected compromises by the soccer team’s ownership and the city.

“This is supported by the city and something we’ve worked on for a long time and it’s now supported by the city council unanimously,” said Gabe Hoffman-Johnson, a founding investor and the president of Portland United, which has also operated under the working title of USL to Portland. “We owe a large debt of gratitude to the city staff.”

The lease agreement runs for five years, with the soccer club having two five-year renewal options. If the club renews for years 11-15, rental fees for Fitzpatrick will be assessed per the agreement.

In addition, the soccer club will contribute $200,000 toward a new artificial surface athletic field for public use at a yet-to-be-determined separate site, projected to be installed in 2026.

Ethan Hipple, director of the city’s parks, recreation and facilities department, said rental fees for the club’s expected 25 home games, including preseason and possible postseason games, plus anticipated practice days, would have been approximately $128,000 in the first year, with annual increases.

Opponents of the lease agreement felt the city was making a mistake in forgoing the rental revenue. The city estimates the lost revenue from not charging rental fees will trigger an approximately 1 cent increase in the property tax rate.

Hipple said the improvements the club will make – specifically for enhanced lighting, new locker rooms and improvement to the press box, ticket entrance area and sound and broadcasting capabilities – will enhance the overall experience for all users of Fitzpatrick Stadium. While none of those improvements were budgeted in the near future, they are items that would have needed to be addressed at some point at the 6,000-seat facility.

The agreement also calls for the city to get all net parking revenue and 15% of signage revenue. That will provide an increase of approximately $30,000 in revenue to the city in the first year that the team plays games. Hipple said regarding parking revenue, this agreement is an improvement compared to those for the Portland Sea Dogs at Hadlock Field and the Maine Celtics at the Portland Expo, two other city-owned facilities.

“We spent several years negotiating and we have some things in that aren’t included with our older agreements with the Sea Dogs and the Celtics. We don’t get parking revenue for those,” Hipple said.

Avoiding as many potential conflicts with other users, especially Portland High School, was another key aspect of the negotiation.

The USL season runs from mid-March to mid-October and is followed by playoffs.

“We are very cognizant of that,” Hoffman-Johnson said. “The way we schedule was vetted quite intensely. We looked at it day-by-day, calendar year by calendar year.”

Hipple noted that the city spent over two years in negotiations and one compromise the soccer club made was “whittling the number of dates from 40 to 25.”

“Wednesday and Saturday are the days typically when their games will be and those are times where we don’t see a lot of conflict based on years of schedules,” Hipple said. “Portland High is going to be prioritized. They’ll get what they need. The fact that two PHS coaches showed up in support to Monday’s city council meeting is telling.”

The club will get all concessions revenue and will provide its staff for concession sales.

“There are other economic benefits to the city other than revenue payments,” Hipple said. “When you look at the big picture of people coming to the game and sports tourism and jobs created by this and those are real benefits to the city.”

STARTING A TEAM FROM SCRATCH

Hoffman-Johnson, 31, a Portland resident and former All-American at Falmouth High, said the path is cleared to begin building the club’s infrastructure and brand. The USL to Portland ownership group includes Lewiston native Tom Caron, a broadcaster for NESN and a weekly sports columnist for the Press Herald. Catherine and Jonathan Culley of the Portland-based real estate development firm Redfern Properties are also founding investors.

“We’re starting a professional soccer team from scratch,” Hoffman-Johnson said. “We need to sign a coach, staff, players, and come up with marketing events, community events, watch parties and coming up with as many ways as we can to introduce ourselves both locally and statewide.”

Key steps will include actually naming the new team and deciding on the club’s crest and jersey design, then getting season-ticket sales in place.

At the same time, the club will need to be making improvements at Fitzpatrick Stadium. According to the lease agreement, the club will deliver a proposed construction program with cost estimates by Feb. 1. A “reasonably detailed schedule for the construction of improvements” is due by May 1. Construction is to begin by July 1 and be completed prior to the club’s first preseason game in 2025. The city will review plans at each stage and has the right to notify of disapproval.

The club is responsible for accepting bids, hiring contractors and overseeing and paying for construction costs, including any cost overruns.

The lease agreement does outline projected improvements and costs. New lighting to bring the facility to USL standards will be the major expense, estimated to cost $485,000 to $500,000. Other listed improvement areas include the dilapidated press box ($40,000-$60,000), building new locker rooms ($250,000-$300,000), club storage area ($10,000-$20,000), ticketing entrance ($10,000-$20,000), audio system ($40,000-$50,000) and miscellaneous projects including additional electronics, utility costs and enhancing operational and fan experience elements ($150,000-$300,000).

The new locker rooms will include an area for the visiting USL teams that will be open for use by other Fitzpatrick users. Portland United’s home locker room will be exclusive to the soccer club.

At Monday’s city council meeting several residents spoke in favor of bringing professional soccer to Portland and the approval of the lease agreement. But 13 of the 14 written comments submitted prior to the meeting opposed the lease agreement. The opposition primarily focused on the lost revenue of not charging rental fees and the impact on other users of the public facility, particularly Portland High athletic programs.

“It seems like this for-profit business really has a sweet deal using community assets and being prioritized over public use,” said Karen Snyder on Tuesday. Snyder was one of the Portland residents who wrote in opposition prior to the council meeting.

GRANTED EXPANSION FRANCHISE

From the earliest stages of the bid to bring a USL franchise to Portland, Hoffman-Johnson has emphasized soccer’s ability as the world’s game to bridge economic and cultural divides.

He repeated that Tuesday.

“I’m focused on using this team and soccer to do as much good as possible for Portland and Maine,” Hoffman-Johnson said.

USL to Portland was officially granted an expansion franchise by United Soccer League in September. USL League One is a third-tier league that targets markets with population bases from 150,000 to 1 million. The Portland metro area (Cumberland, York and Sagadahoc counties) has an estimated population over 530,000, which rises to 660,000 if the Lewiston-Auburn area is included.

Portland will be the first New England team in League One, which had 12 teams in the recently completed 2023 season. USL executives have repeatedly stated they expect Portland to be a successful franchise.

“We have been thrilled to see the community of Portland rally around their new professional soccer team,” said USL League One President Lee O’Neill on Tuesday. “Securing the City Council’s approval to play at Fitzpatrick Stadium puts the club on a clear path to its inaugural season and provides the setting for many memories to come.”