The Lease Clause That Launched SoFi Stadium

November 28, 2023 • At the recent ULI Fall Meeting in Los Angeles, I had the good fortune to tour SoFi Stadium, the state-of-the-art, relatively new home turf for the LA Rams and LA Chargers football teams. SoFi is also the $3.2B anchor of a 298-acre mixed-use development that’s been in the works for over a decade.

The following is the story of how SoFi was launched.

A Lease Clause That Punched Above Its Weight

Our tour was led by SoFi’s lead architect, Mark A. Williams, FAIA, Global Director, Venues, at HKS, Inc. During dinner that night in one of the highly-touted lounges at the stadium, it was mentioned that a heavily-negotiated, hotly-contested lease clause resulted in the development of SoFi Stadium.

As a commercial leasing attorney who eats, sleeps, and breathes the value-creation opportunities of each lease I negotiate, my interest was piqued, and I had to find out more.

The Doomed St. Louis Dome

In 1995 the Rams moved from LA to a new home stadium in St. Louis, the Edward Jones Dome. The Dome was built on spec, without a home team, and financed by bonds backed by the city, county, and state. Hoping to lure the Rams to the Dome, the St. Louis Convention and Visitors Commission (CVC) agreed, in its 30-year lease with the Rams, that the Rams could terminate the lease if, as of 2014, the stadium did not meet the standards of a “First Tier” facility in keeping with the Rams arbitration award, and likely the lease provision.

The First Tier Dispute

In 2012, the Rams proposed a $700M upgrade to the Dome, to be paid for by CVC, in order to bring the Dome into compliance with the First Tier standard agreed to in its lease. CVC had spent $30M of taxpayer funds for stadium upgrades and had offered to spend another $124M to bring the stadium into compliance. Unable to bridge the differences between their $700M vs $124M plans, the parties submitted the dispute to binding arbitration. In 2013, the arbitrators ruled unanimously in favor of the Rams’ plan. Later that year, CVC notified the Rams that it would not improve the Dome as set forth in the Rams’ plan, thus enabling the Rams to terminate their lease at the Dome.

A Stadium is Born

Two years later in 2015, the Rams’ owner, E. Stanley Kroenke, who also happened to be a real estate developer (married to a “Walmart heiress”), unveiled plans to build a 70,000-seat stadium on a 298-acre parcel he owned just south of LA. The former Hollywood Park Racetrack site would soon be home to SoFi as well as retail, hotels, entertainment, and residential uses.

Fast forward to today, and SoFi is the NFL’s largest stadium at 3.1M SF and the first indoor-outdoor stadium in the world. It boasts columns that absorb the movement caused during earthquakes, a stadium bowl that dips 100 feet below ground, and a 28-acre translucent canopy roof that can double as a video screen welcoming passengers landing at LAX, just 2 miles away.

Maximize the Value Creation of Your Leases

In 1995, no one could have foreseen the value creation that materialized as a result of that heavily-negotiated, hotly-contested St. Louis lease clause. Not only does it include the largest NFL stadium ever built, re-setting the bar for the top tier of First Tier facilities, but it also includes the surrounding mixed-use Hollywood Park community.