Here’s how much taxpayer money Lexington Sporting Club could receive for stadium, fields

Beth Musgrave
·4 min read
2

A Lexington economic development board gave initial approval Tuesday to millions of dollars in tax incentives for Lexington Sporting Club to build a 5,000-seat stadium.

As part of the incentives, Lexington Sporting Club would be given a $1 million forgivable loan to build public infrastructure for the $30 million stadium and a related training facility. The pro soccer club must employ between 50 and 150 people for 10 years, as part of the agreement.

In addition to the forgivable loan, the sporting club can receive a 1% rebate on its occupational taxes for all of its Fayette County employees for 10 years. The occupational tax rate for Fayette County is 2.25% of local wages.

The group can also apply for an industrial revenue bond for up to $50 million. The city would issue the bonds but the title to the property would revert to the city.

However, that also means Lexington Sporting Club would not have to pay merged government property taxes for 15 years. The exact amount of that tax rebate, or break, is not known.

The Lexington-Fayette Economic Development Incentives Board, which vets and gives initial approval for business incentives, voted to approve the incentives during a Tuesday meeting.

The Lexington-Fayette Urban County Council will have final say on whether to approve the tax breaks.

Lexington Sporting Club’s new stadium on Athens Boonesboro Road will initially seat more than 5,000 fans with the ability to ultimately expand to as many as 11,000.
Lexington Sporting Club’s new stadium on Athens Boonesboro Road will initially seat more than 5,000 fans with the ability to ultimately expand to as many as 11,000.

Lexington Chief Development Officer Kevin Atkins said the council will probably discuss the incentive package at an Oct. 31 council work session.

The $1 million loan is from a $3 million infrastructure improvement fund that was originally designed and set aside to help developers with infill and development projects. It’s the first time the city has set up such a fund.

The city will not be liable for any payments on the bond if Lexington Sporting Club does not make payments, said Anne-Tyler Morgan, a board member and a lawyer. A bonded property helps organizations secure other types of financing, Morgan said.

If the Lexington council moves forward with the industrial revenue bond, Lexington Sporting Club will have to come to agreements with other taxing districts including Fayette County Public Schools, the Lexington Public Library and Lextran for property taxes. The largest portion of property taxes goes to Fayette County Public Schools.

A similar agreement had to be reached for The Manchester Hotel, which received a $39 million industrial revenue bond in 2021.

After a more than yearlong search for a potential location, Lexington Sporting Club announced this month it would locate its stadium at the corner of Athens Boonesboro Road and Interstate 75. The stadium is projected to open in August 2024.

The pro soccer team had been courted by other counties, including nearby Jessamine County.

In addition to a stadium, plans call for new hotels, restaurants and other retail at the 23-acre property.

A rendering imagines how businesses could fill in the area surrounding Lexington Sporting Club’s soccer-specific stadium and practice fields off Athens Boonesboro Road.
A rendering imagines how businesses could fill in the area surrounding Lexington Sporting Club’s soccer-specific stadium and practice fields off Athens Boonesboro Road.

Atkins said the incentives will only cover the stadium and training facility.

There is no minimum salary requirement for the 50 to 150 employees.

$5.7 million in other incentives

Gov. Andy Beshear announced in early October the group will receive up to $4.7 million in state tourism incentive dollars. The details of that deal have not been publicly released. Under the state’s tourism incentive program, up to 25% of a tourism project’s cost can be rebated to a developer over a 10-year period.

Kentucky Gov. Andy Beshear speaks during an event announcing the Lexington Sporting Club’s new stadium on Oct. 10.
Kentucky Gov. Andy Beshear speaks during an event announcing the Lexington Sporting Club’s new stadium on Oct. 10.

In addition to the state incentives, the group has also been given up to $1 million in local tax breaks for the construction of seven youth sports fields adjacent to the stadium. As part of that deal, Lexington Sporting Club must have five full-time people employed at the site. The average salary for those people will be $35,000 per year for 10 years. The money will go toward streets, drainage and other infrastructure improvements.

The Lexington council set aside the $1 million from surplus money for the private soccer fields.

Atkins said the group has agreed to host both the boys and girls high school state tournaments for 15 years as part of the various incentive agreements.

Louisville City FC also received local and state tax incentives to build Lynn Family Stadium in Louisville. That project received approval for up to $21.7 million in tax incentives over 20 years. The stadium is part of a tax increment financing district, or TIF, which uses new taxes generated from the project to pay for infrastructure costs such as roads and sewers.

Lexington, citing concerns about how well TIF districts perform, has stopped approving them.

Also Tuesday, the board gave initial approval for a $1 million forgivable loan for Keeneland’s recently announced $93 million expansion, which includes a new visitors’ center. The $1 million will come from the same $3 million city fund for infrastructure improvements.

The council must also approve that forgivable loan.