The City has moved forward by leveraging results from the previous studies to help better inform the implementation of the various plans in its efforts to bring diverse entertainment options to the community, as well as attract visitors to the Modesto to support economic development. These efforts include exploring options and locations of a potential stadium, sports leagues, and an entertainment district.
As part of the City’s commitment to exploring sports entertainment options, the City and the United Soccer League (USL) have been discussing bringing professional soccer to Modesto. The USL selected Modesto as a potential location for both a professional men’s and a women’s team.
The first step to facilitate continued discussion with the USL was to execute a Letter of Intent (LOI) to formalize exclusive negotiations between the City of Modesto and USL (Parties). The LOI described the process that the City and USL agreed to undertake to explore and analyze, in good faith, for the possible establishment of professional soccer to be played in a multi-purpose stadium to be constructed and operated in Modesto. In addition, the USL agreed not to explore establishing a professional soccer team anywhere in Stanislaus County or Merced County, and Modesto agreed not to explore the establishment of a professional soccer team in the City with any entity other than USL.
On September 10, 2024, by Resolution No. 2024-333, Council approved a LOI with the USL. The initial LOI established an exclusive negotiating period that commenced on the execution of the LOI and would last for one (1) year, with an automatic six (6) month extension if the Parties executed a Memorandum of Understanding (MOU) regarding the establishment of professional soccer in Modesto.
As part of the executed LOI, the City and USL agreed to discuss and explore the following topics and terms:
• Potential location of the multi-purpose stadium within Modesto. • Potential designs and size of the stadium to ensure compliance with applicable USL stadium requirements.
• Subject to USL stadium requirements, the Parties intended that the stadium would have a minimum seating capacity of 5,000, with the ability to expand to at least 10,000 seats, and serve as the home stadium for each of a men’s and women’s professional soccer teams. A larger stadium would be necessary for USL’s higher-level teams, such as USL’s Champion’s League. • How construction of the stadium will be financed, including exploration of the use of financing districts.
• The identity of the ownership, management, and operations of the stadium, and agreements relating to the leases, licenses, easements, and other real property transactions for the stadium.
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• The type of ancillary development which may be constructed adjacent to, or in the vicinity of, the stadium.
• What plans, studies, and other predevelopment costs are necessary.
Following the execution of the LOI on September 10, 2024, the City began to evaluate potential sites for stadium development in Modesto including the viability of supporting professional soccer teams and exploring opportunities to enhance entertainment options for the community. On March 26, 2025, the City hosted a publicized Special Workshop to continue community discussions on the expansion of the USL into Modesto. During the Workshop, staff presented the City Council with a comprehensive update regarding the City’s exploration of bringing USL professional soccer to Modesto.
The locations presented included the Downtown South Site (near D Street), Downtown North Site (Centre Plaza), and the vacant former Municipal Golf Course (West Modesto) site. Considering these locations, the City Council directed staff to focus on both the Downtown North Site and the Municipal Golf Course site while also directing staff to gather more data pertaining to fiscal and economic impacts of both potential stadium sites.
On June 25, 2025, the City of Modesto hosted an additional workshop to continue the community discussion on the analysis of two potential stadium locations: Downtown North (Centre Plaza), and the Municipal Golf Course (West Modesto). During this workshop, the City Council requested more time to gather information and direct staff to expand additional community feedback regarding the potential stadium sites and to focus on assumed fiscal impacts for the proposed locations including the Downtown North, the Municipal Golf Course, and the combination of both sites.
Following this direction, staff hosted two community listening sessions, on July 28 and July 29, 2025, to give the community an opportunity to ask questions and provide feedback regarding professional soccer in Modesto and the proposed stadium locations.
At these community workshops, residents were asked to share their feedback on the potential benefits and drawbacks of the stadium being at the Downtown North Site and Municipal Golf Course, as well as identify key considerations for both sites.
On August 5, 2025, the City Council hosted another Special Workshop to continue the community discussions. The two stadium development options were presented at this Workshop, along with a summary of community feedback gathered through the community engagement process. Considering the two options, Modesto City Council unanimously passed a motion directing staff to move forward with option three (3)/option C to support the future site for the stadium. This option designates the Downtown North Site (Center Plaza) areas as the primary site for the stadium itself, while the Municipal Golf Couse (West Modesto) is identified as the location for associated practice and tournament fields.
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City Council, June 9, 2026
Direction on the Letter of Intent with the United Soccer League, LLC, Stadium, and Ancillary Development
On March 10, 2026, the City Council acted to further extend the current LOI between the City of Modesto and the USL to June 10, 2026, via Resolution 2026-064. This extension was made to allow staff to work with Kosmont Companies (Kosmont) to obtain an independent analysis to assess the feasibility of the proposed stadium and the multi-use development project.
DISCUSSION:
To support informed decision-making related to the proposed stadium and assist in advancing negotiations related to the MOU, the City engaged Kosmont to provide an independent financial, economic, and market analysis, as well as public funding and financial advisory services, and assistance in discussions with USL. On February 23, 2026, by Resolution 2026-045, Council approved the Second Amendment with Kosmont to expand the scope of services to the additional requirements mentioned above.
The scope of work with Kosmont is focused on giving the City an independent understanding of this project’s overall financial impacts, feasibility, funding options, as well as assisting directly in discussions with USL representatives, as needed, on matters such as site control/ownership, operations, funding, financing, and transaction structuring. Kosmont’s scope of work and analysis will also support informed discussions regarding potential deal structures for the MOU should they be required.
Kosmont evaluated potential funding and development of a potential soccer stadium in the City’s downtown with additional development of practice fields and ancillary development at the Municipal Golf Course site in West Modesto. As part of their analysis, Kosmont included the following:
• A review of a variety of reports and evaluations that have been completed to date about stadium sizing and location with proximate development concepts (including residential, retail, office, and hotel use). • Local and regional real estate market conditions, real estate sales, and recent and proposed developments.
• An evaluation of a hypothetical development pro forma for potential development programs and profiles.
• A review of property ownership information and history for the area around the contemplated development sites.
Although the City had previously discussed a larger stadium project that could cost up to $125 million to construct, Kosmont based assumptions on a smaller stadium project ($90 million) to reduce the impact of property acquisition needs in the downtown site. It is important to note that the City’s discussion of a larger stadium was based on attempting to attract a higher-level USL team per USL requirements. #24..
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City Council, June 9, 2026
Direction on the Letter of Intent with the United Soccer League, LLC, Stadium, and Ancillary Development
Kosmont found that current real estate market conditions do not appear to support many of the land use elements contemplated as part of the development of the stadium and ancillary facilities on the Downtown and Municipal Golf Course sites. • Multifamily residential with structure parking is not seen as supportable in the current market.
• A viable residential product appears to be three-story garden walk up with surface parking.
• Office, retail, and other uses don’t appear to drive substantial residual land values.
• Supportable land values in the area are generally low; the City’s land as an asset appears less important than development opportunity.
In Kosmont’s research, they have found that it may be beneficial to limit ancillary land uses in stadium development and focus on fundamental elements. Other land uses may be desired from a planning perspective, but add complexity, and do not appear to result in a substantial increase in value over time. Absent private funding, the City will also likely have to fund or finance initial property acquisition and stadium development costs.
To cover that upfront cost, the annual debt service associated with the stadium would be approximately $6.7 million per year.
Kosmont determined that there may be some capacity for the Municipal Golf Course site to serve as a limited early revenue source, but cost recovery will likely rely on future municipal tax revenues from sources such as Enhanced Infrastructure Financing District (EIFD), property tax, sales tax, Transient Occupancy Tax (TOT), etc.
Kosmont also provided information regarding the potential redevelopment of the Municipal Golf Course site without the practice fields as a way to generate additional revenue. The hypothetical redevelopment plan included 600 multifamily units on 28 acres, 90 affordable units on four (4) acres, and 32,500 square feet of retail/commercial space on three (3) acres. The plans mix of uses was developed with the goal of the City retaining fee interest of the property and entering long-term ground leases to facilitate development and create income streams. With this plan there could be potential challenges in selling ground leases for these uses but there would be more upside for revenue potential in the out years. Staff also discussed with Kosmont the potential of master planning the Municipal Golf Course and putting plans out to the market in a request for proposals to gauge public interest by the development communities. There are several options regarding the Municipal Golf Course given the site’s size and development potential.
Staff reviewed the conclusions from Kosmont including fiscal analysis as outlined in the Fiscal Impact section below. Based upon the information provided, Kosmont details serious obstacles that the City could face if it proceeded with plans to build a stadium on the sites identified by Council. The obstacles outlined by Kosmont are as follows:
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City Council, June 9, 2026
Direction on the Letter of Intent with the United Soccer League, LLC, Stadium, and Ancillary Development
• With potential stadium costs assumed to be up to $90 million, initial land acquisition costs estimated at $5 million, and potential revenues that could be pledged for financing from the City ($55 million), there is a gap of $43.4 million to fund the stadium and initial land acquisition costs.
• Kosmont financing assumptions assume a capacity up to $51.6 million. It should be noted that previous numbers from PFM, the City’s Financial Advisor, had determined the City’s bond capacity to be $35.3 million being available for construction funding. The variance in the two figures is mainly due to updated revenue assumptions from Kosmont’s financial analysis.
• These assumptions assume 100% of the revenue generated from the development of the Municipal Golf Course site, Downtown and all stadium revenues. Any impact to the build-out or the revenues received would result in a deficit on the financing side and the need for the City to cover the deficit from other funding sources, essentially General Fund.
• There may be other opportunities for development at the Municipal Golf Course site that provide community amenities at this desirable city-owned property/location.
While the development of the stadium could be an opportunity to create a sports and entertainment district in the downtown area for Modesto, at this time, the financial analysis conducted by Kosmont highlights real challenges with the feasibility of the construction of a downtown soccer stadium. Moving forward with the construction of a downtown stadium project might be feasible based upon several scenarios that must play out exactly as planned or there could be a real risk in placing a large amount of generational debt upon the City. As an option, Kosmont’s analysis does point out potential opportunities to develop the Municipal Golf Course site to add amenities for the residents of Modesto even if the downtown stadium was not developed.
FISCAL IMPACT:
Kosmont has conducted a thorough fiscal analysis of the potential Downtown stadium and the ancillary development at the Municipal Golf Course site.
Downtown Stadium and Municipal Golf Course Financial Analysis Summary Category Amount
Expenditures
Stadium Construction (Downtown Site, 8,500 seat capacity) $90,000,000 Initial Land Acquisition Costs (Estimated) $5,000,000
Total Expenditures for Downtown Stadium $95,000,000
Revenues
Downtown Stadium Revenues* $30,000,000
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City Council, June 9, 2026
Direction on the Letter of Intent with the United Soccer League, LLC, Stadium, and Ancillary Development
Municipal Golf Course Revenues* $21,600,000
Total Estimated Revenues $51,600,000
Funding Gap for Downtown Stadium Construction $43,400,000 *Net Fiscal Revenues only include City revenues for property tax, sales tax, etc. net of estimated costs of municipal services and are stabilized over a 30-year period at a 4.5% discount rate.
In the fiscal analysis conducted by Kosmont, there was potential revenue identified that could be received by both the City and the County from joint participation in an EIFD.
The EIFD would be created using larger boundaries that would incorporate a portion of County property tax and City property tax. The estimated present value of the additional revenue that could be generated by the County over a 30-year period could be approximately $3.1 million.
With the potential use of future revenues from the buildout of the Municipal Golf Course site and other revenues sources such as parking revenue, transient occupancy tax gains, potential ticket tax, etc. the City would be facing a $43.4 million funding gap.
Even adding in the County, which would require their approval, as potential funding partner through an EIFD, the City would still be facing a gap of approximately $40.3 million that would potentially need to be covered by potential private partner(s).
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review.
COMMITTEE RECOMMENDATION:
Due to the urgent nature of the action needed, this item was taken directly to Council.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Motion providing direction regarding the potential extension of the Letter of Intent (LOI) with the United Soccer League (USL), LLC, and the construction of a downtown soccer stadium, and ancillary development.
Approved by:
Jessica Hill, Director of Community and
Economic Development
Joseph P. Lopez, City Manager
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Attachments:
1. Kosmont - Summary of Real Estate and Fiscal Impact Analysis #24..
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El Segundo, CA 90266
TEL: 424-297-1070 | URL: www.kosmont.com
SUMMARY OF REAL ESTATE & FISCAL IMPACT ANALYSIS
June 2026
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 2
OUTLINE
1. Background
2. Overview
3. Golf Course Property - Value & Considerations
4. Golf Course Property - Hypothetical Redevelopment Program
5. Potential Downtown Stadium Program
6. Potential Fiscal Revenue & Expenditure Impacts
7. Timing Considerations
8. Conclusions
9. Next Steps
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 3
BACKGROUND
Kosmont Companies (“Kosmont”) was retained by the City of Modesto to evaluate the potential funding and development of a soccer stadium in the City’s downtown - The City desires to utilize real estate assets and entitlements to generate value to support the costs of developing the stadium
In completing this analysis Kosmont:
- Reviewed a variety of reports and evaluations completed to date about stadium sizing, location, and proximate development concepts (including residential, retail, office, and hotel uses) - Local and regional real estate market conditions, real estate sales, and recent and proposed developments - Evaluated hypothetical development pro forma for potential development programs / profiles - Reviewed property ownership information and history for the area around the contemplated downtown stadium site
A summary of Kosmont’s conclusions based on its analysis follows #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 4
OVERVIEW
Current real estate market conditions do not appear to support many of the land use elements contemplated as part of the development of the stadium and ancillary facilities on the Downtown and Golf Course property
- Multifamily residential with structured parking not considered viable in current market - Viable residential product appears to be three-story garden walk up with surface parking - Office, retail, other uses don’t appear to drive substantial residual land values - Supportable land values in the area are generally low; the City’s land as an asset appears to be less important than development opportunity
To the extent a stadium is desired, it may be beneficial to limit ancillary land uses in stadium development, and focus only on fundamental elements (e.g., stadium, parking potentially some synergistic retail)
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 5
OVERVIEW (CONTINUED)
The City could encourage desired development proximate to the stadium at the Downtown site with targeted zoning / entitlement opportunities to facilitate private redevelopment - Could put value capture zoning mechanism in place given potential for greater residual land values in the future
Golf Course property appears to have limited value / capacity to directly support stadium development costs; however, does provide some redevelopment opportunity Potential to utilize Enhanced Infrastructure Financing District (“EIFD”) and fiscal benefits on/from both Golf Course property and Downtown site to recapture stadium development costs over time Additional detail and discussion of these elements follow #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 6
GOLF COURSE PROPERTY - VALUE & CONSIDERATIONS
Thompson & Thompson provided preliminary
order of magnitude estimates of real estate
value as shown at right (June 2025)
Kosmont estimates 35-acre “Residential
Land” portion may readily yield a value of
$20MM - $30MM (versus $7.5 – 8.5 MM)
with appropriate entitlements if used for
market-rate residential
- Range heavily dependent on required sitework
/ infrastructure
- SLA requirements appears to eliminate residual
land value for residential uses unless affordable
requirements funded with LIHTC financing
(discussed further subsequently)
Stadium footprint thought to have a similar
value if redeveloped, but would require
demolition of the existing stadium
$650 - 800k
(Privately Owned)
$300 - 450k
$50 - 100k
$7.5 – 8.5 MM
~35 Acres
$15 – 20 MM w/ Stadium
~16 Acres
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 7
GOLF COURSE PROPERTY - VALUE & CONSIDERATIONS (CONTINUED) Generally, land currently estimated to yield a value of up to ~$20 per usable square foot (~$875k per acre), though may require substantial infrastructure improvements to yield this value Appears to be similar order of magnitude land valuation for smaller-lot single family homes (~6+/- DU per acre), and three-story garden walk-up product (~20+/- DU per acre) May be some opportunity to modestly increase residual land value under a for-sale townhome / attached residential development program, but likely more speculative and of limited impact overall Surplus Land Act (“SLA”) requirement that 15 – 25% of residential units be income-restricted to low-income households appears to eliminate residual land value
- However, could seek to develop a 100% affordable project financed with Low Income Housing Tax Credits (“LIHTC”) on a small portion of the Golf Course property to minimize impact to land value Ideally could use Golf Course site to generate value to fully support development of stadium, but reality is limited capacity given contemplated use of portions of land to support practice facilities Best approach may be a long-term lease to capture limited initial land value of portions developed, focus on fiscal benefits of redeveloped portion of site.
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 8 GOLF COURSE PROPERTY – HYPOTHETICAL REDEVELOPMENT PROGRAM Kosmont developed a hypothetical development program to evaluate revenue generation potential of the Golf Course property
- ~600 Multifamily Units on ~28 Acres
- ~90 Affordable Units on ~4 Acres
- ~32,500 SF of Retail / Commercial on ~3 Acres
Program / product mix developed with goal of City retaining fee interest of property and entering into long term ground lease to facilitate development and create income stream Opportunity to pursue for sale product (e.g., small lot single family and/or attached townhomes), but typically more
friction in trying to ground lease for these uses
Estimated initial stabilized revenue on the order of $1MM+ per year (upon full buildout in $2026)
~35 Acre Golf
Course
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 9
POTENTIAL DOWNTOWN STADIUM PROGRAM
Stadium with seating for ~8,500 spectators
Depending on configuration expected to require acquisition of property worth on the order of $5MM ($2026)
Would focus on utilizing existing parking infrastructure / capacity Preliminary assumption for stadium only (excluding practice fields) of $80 – 90 MM Proposed use of artificial turf would facilitate greater non-game utilization Kosmont assumed league and third-party rental revenue and naming rights (~$900k annually) would be required to support long term maintenance requirements #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 10
POTENTIAL FISCAL REVENUE & EXPENDITURE IMPACTS
Fiscal impacts will be driven from actual land use mix, and corresponding phasing / timing Summarized below are the estimated stabilized fiscal revenue and expenditure impacts for the City and County (County can be a partner in public funding and financing, e.g., via Enhanced Infrastructure Financing District) Revenue Source City $/Yr County $/Yr City PV** County PV** Golf Course Lease ~$1.0 MM $0 ~$20.0 MM $0
Stadium Parking ~$829k $0 ~$18.5 MM $0
Stadium TOT ~$159k $0 ~$3.3 MM $0k
Stadium Ticket Tax ~$283k $0 ~$5.8 MM $0
Downtown – Net Fiscal Revenue* ~$119k ~$2k ~$2.4 MM ~$51k Golf Couse – Net Fiscal Revenues* ~$102k ~$116k ~$1.6 MM ~$3.0 MM Total ~$2.6 MM $118k ~$51.6 MM ~$3.1 MM
*Fiscal revenues such as property tax, sales tax, etc. net of estimated costs of municipal services **Stabilized revenues over a 30-year period with a 4.5% discount rate #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 11
TIMING CONSIDERATIONS
City and County net revenues estimated to be on the order of $2.6 MM / year with a present value over 30 years of ~$55 MM
Preliminary cost estimates for stadium only (excluding practice fields) of $80 – 90 MM; total of $85 – 95 MM with $5 MM allowance for property acquisition Suggests a gap of ~$30 – 40 MM on a present value basis however, City must consider potential timing of cashflow from Golf Course property and revenues associated with stadium operations
In concept could start redevelopment of Golf Course property ahead of stadium construction, but regardless, may need to front load stadium costs Cost of financing $95 MM on the order of ~$7.1 MM*
Thus, initial timing / funding gap may be on the order of ~$7.1 MM per year, decreasing to ~$4.5 MM / year once project stabilizes
*Figures based on PFM 5/2025 analysis; scaled up for a $95 MM project fund, not independently evaluated or updated #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 12
CONCLUSIONS
Current real estate market conditions do not appear to support many of the land use elements contemplated as part of the development of the stadium and ancillary facilities on the Downtown and Golf Course property
It may be prudent to limit ancillary land uses as part of the core stadium development, and focus only on fundamental elements (e.g., stadium, parking, potentially some synergistic retail) - The other land uses may be desired from a planning perspective, but add complexity, and do not appear to be substantially accretive. These uses could be located on adjacent properties. - Absent private funding, the City will likely have to fund / finance initial property acquisition and stadium development costs / on order of ~$7.1 MM if $95 MM*
There may be some capacity for the Golf Course site to serve as a limited early revenue source, but greater cost recovery will likely rely on future municipal tax revenues (EIFD / property tax, sales tax, TOT, etc.)
Should the stadium be developed it is reasonable to expect some additional private development proximate to the stadium; benefits from this potential investment are not considered herein *Figures based on PFM 5/2025 analysis; scaled up for a $95 MM project fund, not independently evaluated or updated #24..
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CITY OF MODESTO – SPORTS FACILITY REAL ESTATE AND FISCAL IMPACT ANALYSIS | JUNE 2026 | 13
NEXT STEPS
Evaluate City appetite to fund property acquisition and stadium development with limited initial revenue from Golf Course property, and reliance on future fiscal revenues (EIFD / property tax, sales tax, TOT, etc.) to help underwrite
If desire to move forward, consider SLA / RFP process to identify potential revenue generating uses / users to maximize City cashflow from Golf Course property #24..
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