The metropolitan government is caught in a thicket of legal and financial obligations that could cost the city more than $1 billion due to the city’s 1996 lease with the Tennessee Titans.
The lease, signed under former mayor Phil Bredesen on terms favorable to the pro football team, is a relic of the city’s past — a time when Nashville sought the cachet of a major American city. This put Nashville on the hook to ensure a stadium in “first-class condition,” an ambiguously defined term that is based on a standard set by comparable sports facilities across the country. Now the two options being considered by current Mayor John Cooper require Metro to pour billions of dollars of public money into the team’s facilities: either a completely gutted Nissan stadium or a brand new domed arena nearby. of the current stage.
Stadiums comparable to Nissan’s facilities have been demolished or renovated over the past 26 years, increasingly pushing back that first-class standard of condition (and the associated financial obligations of the city). The city stopped its maintenance reimbursements at some point in recent years – the Nissan Stadium was mentioned once in a decade of capital improvement budgets, when the city listed $25 million for various upgrades in 2016. The Titans say they committed an additional $27. million euros in maintenance, for which they have not been reimbursed. The team factored the payouts into their estimate of the city’s total obligations, a whopping $1.8 billion through 2039 – a figure that was finally released at a meeting of the Metro Sports Authority on May 19.
In May, the mayor released Metro’s capital improvement budget, pinning a new stadium at $2 billion. After 72 hours and some questions from board members, Metro Finance said they had made a “clerical error”, and the figure came in at $2.2 billion.
Much of the deal progressed at a pace set by the Titans. As a for-profit company that sells football, the team understandably has a strong interest in a shiny new domed stadium. Although seemingly interested in spending as little taxpayer money as possible, the city agreed not to dispute the Titans’ numbers with its own due diligence, essentially accepting the team’s astronomical estimates.
On the day the Titans issued Metro’s billion dollar bond to the Metro Sports Authority, the mayor issued a press release that ended with a surrender: “We have no intention of to commission another study to tell us what we already know: renovating the stadium would cost Nashvillians. hundreds of millions of dollars. »
Rather than play hardball (perform minimal Nissan upgrades, challenge the Titans to sue) or play softball (respond with its own renovation estimates), the city chose not to really play ball at all. Metro, represented in the negotiations by the mayor’s office, reported to the team at important points in the stadium talks. According to a tweet from former Cooper planner Ariel Hughes, the Titans have had an ongoing meeting Monday with the mayor since the fall. In early May, news broke that the Titans had decided to contract an architectural firm to design a new stadium.
The mayor’s office focused on communicating the benefits of a new stadium while downplaying its multi-billion dollar price tag. Cooper’s main argument hinges on a complicated funding plan that will pool state and local tax revenues, a $500 million donation from the state, and an as-yet-undetermined contribution from the Titans expected to be around $700 million. If that’s close to the right, the city will try to close a $1.2 billion gap with a combination of hospitality tax revenue and a special sales tax district. This district would channel state and local sales taxes to the payment of the stadium’s debt – all taxes collected inside the stadium (even for non-Titans events, like, say, a World Cup) and the half of all taxes collected from the 130 acres surrounding the stadium, currently an industrial floodplain.
The mayor has reduced the complexities of the plan in a carefully written text tennessian guest column on May 12: “I will not be selling public land, raising sales tax or spending property tax money to fund this stadium,” he wrote. At-Large board member Bob Mendes clarified on his blog that the plan would spend quite a bit of sales tax, a preview of the kind of scrutiny any deal could face when its various components go through the Metro Council later this year. Cooper also argues that the stadium will offload the general fund of Metro, the city’s financial heart that currently backs the Nissan stadium’s debt. Rather, the new plan will indirectly strain the general fund, creating urgent pressure to quickly develop the East Bank into a stadium neighborhood that can generate enough sales tax to pay off $1 billion in debt. Already, the mayor has planned an additional $1 billion in infrastructure upgrades to redevelop the East Bank. The city has only one financially comparable project on its capital improvement books — Clean Water Nashville, an overhaul of Nashville’s sewer system that began more than 30 years ago.
Economists rarely agree on the poor performance of sports teams as public investments relative to public transit, infrastructure and schools. According to experts, sports stadiums drain spending and reorganize tax revenue rather than attracting outside spending or generating new tax revenue. City leaders sold a new stadium on the merits of hosting high-profile events. In reality, the mayor’s administration has been cornered by a decades-old lease and remains respectful to the negotiating party sitting across the table, seeing a multi-billion dollar opportunity to develop a new commercial district in downtown.