Posted on 07/19/2016 11:50:38 AM PDT by MichCapCon
When Detroit's semipro soccer team needed a bigger stadium to accommodate its growing fan base, it did something unusual. Instead of seeking tax breaks or subsidies to support its ambitions, it turned to private supporters, mostly fans. It did so with the help of the Michigan Invests Locally Exemption or MILE Act.
Detroit City FC raised $741,250 from 527 investors to refurbish Hamtramck’s Keyworth Stadium. The team’s first game at its new home, on May 13, was a sellout with 7,410 tickets sold. That was more than double the 3,500 tickets it was limited to selling when the team played at the stadium at Detroit’s Cass Tech High School.
Keyworth, in Hamtramck, was not exactly in move-in condition. The World War II-era relic could seat 11,000 people but it needed major refurbishment. Its owner, Hamtramck Public Schools, did not have the means to repair it.
The team offered to pay for the work in exchange for a 10-year lease but raising money for such a venture could have been a costly and lengthy process. That’s how the MILE Act was able to help. Michigan passed the legislation in 2013 to make it easier for entrepreneurs to use crowdfunding as a simplified way to raise money in small amounts from many people.
“We’re a small organization, so it would have probably cost more in legal fees to figure out how to offer ownership, if that was even something we were interested in. This offered a very streamlined way for us to solve our problem,” said Alex Wright, one of the team owners.
Under the new law, ventures and investors alike must be in Michigan, and the organizations must raise the money within a year. Detroit City FC raised $741,250 in 11 months from 527 investors. Investors, many of them team supporters, could take part through tiers starting at $250 and going as high as $50,000. They don’t have equity in the team but will earn dividends based on team revenue.
“If the atmosphere wasn’t exciting, the investment wouldn’t have been something I would have been a part of,” said Jeffrey Quesnelle, a team supporter and investor.
Stephanie Jaczkowski was a newcomer to investing. After recently finishing graduate school and landing a full-time job in Detroit, she was thrilled that she could support the team she loves.
“Having an opportunity to invest in something that is right here in the city of Detroit was something I really appreciated,” said Jaczkowski.
Rebecca Green considered it more an investment for her 3-year-old son, who loves going to the games.
“I knew that if we were to make any money back, it would be for his future, but not only that, he loves the team so much. It’s all he talked about all winter, so every day, hearing about DCFC spurred me to invest,” Green said.
Also benefiting from the venture is the Hamtramck school district. The median house value in the city is one-third the state average, and the district had little desire or ability to renovate the stadium.
Giving up 25 Friday nights to a private soccer team for the added improvements made sense to the board.
“What the community is getting back is a beautiful state-of-the-art stadium that will draw families to Hamtramck — the businesses, the restaurants and bars,” said Superintendent Tom Niczay.
Boy! Is that dull sport being shoved down our throats.
“Boy! Is that dull sport being shoved down our throats.”
The illegals have taken over the football fields in my town with their crappy, nasty habits. They turn any place into a litter strewn disaster area.
I plan on attending a game.
Soccer paying its own way while NBA multi-millionaire owners and players get subsidized by the taxpayers. Totally stupid.
That’s just my opinion.
Where I live in Maryland it’s kind of weird. The park near me is mostly used for rugby and there’s usually a weekend cricket match in a local parking lot.
Are there any tax breaks for the investors?
I use to think the way you do about soccer, and I grew up playing traditional American sports, but I am totally into soccer now, and it is definitely not boring. Two 45 minute periods, with no time outs, and players routinely running 10Ks every game, is hardly boring. It is, however, like hockey in that if you don't know the rules and the strategy you probably won't like it very much.
The players on the team all have full-time jobs, and are playing for the love of the game. They would have a good laugh at your comment.
1$ Strohs!
Same reason your local mom and pop has to pay for a new facility but if Toyota was thinking about building a factory there they’d get tons of incentives:
clout
Politicians can brag about big time sports and big time companies being brought to or kept in town, nobody cares what they do for small timers, so they don’t do anything.
We played a variant in High School 50 some years ago. The running conditioned us for real sports; i.e. American football; baseball, basketball and track.
Allen, TX high school football sellout = 18,000 seats
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.