Titans Stadium and East Bank: Why I Support the Plan

Dear Friends,

Over the last couple of years, we have been thoughtfully putting together a plan for the East Bank. The Titan’s stadium is the anchor development of the East Bank that needed its own careful consideration as we’ve deferred required maintenance of it for many years and we’d have to start pulling debt to meet our obligations. There is an extraordinary opportunity here to plan for development that benefits all Nashville-Davidson County. This will be an area that will take a decade or more to build out. Going into this two years ago, I had two fundamental questions to weigh the stadium decision of whether to renovate or build new, as well as how East Bank development should proceed. 1) What is the best scenario for Nashville-Davidson County taxpayers, and 2) Is this development that will benefit every resident of Davidson County?

The answers to both are a resounding Yes. This plan allows us to control growth that benefits all of us and doesn’t exacerbate the biggest challenges associated with our growth and development. Because we control much of the land around the stadium, we will control the type of development to include affordable housing, transit, and culture. There is a very good opportunity to potentially include a home for a new Tennessee Performing Arts Center (TPAC), which the State is funding its relocation.

The financial advantages, compared to the existing stadium lease, are many. Here are some major fiscal points broken down:

1.) The proposed plan benefits from $1.35 billion dollars in funding from sources other than Nashville-Davidson County taxpayers: 

1. ) $500 million state contribution
2. ) $840 million from the Titans, plus responsibility for cost overruns, plus any increase in the stadium project budget between now and commencement of construction
3. ) $18.6 million per year generated by a new 1% hotel occupancy tax. ($18.6 million was the most recently generated amount for fiscal year ending June 30, 2022). 

2.) Compared to the existing lease, Nashville taxpayers will pay less, and assume fewer obligations and liabilities under the proposed plan. Period.

3.) While there have been contentious discussions of what we owe under the current lease agreement to fund repairs, renovations, and updates to the existing stadium (which would have to be done via our Capital Spending Plan (i.e. the Metro “credit card”) and paid for via our Operating Budget (i.e. property taxes), even using conservative estimates of what we owe ($700 – 800 million), trading that for a $760 million revenue bond totally funded on a portion of new sales and hotel/motel tax revenues in the stadium and East Bank, it puts the debt payments squarely on those who use the stadium as opposed to property owners in Davidson County. Revenue bonds do not impact Metro’s credit rating, which is currently the second highest possible.

4.) The proposed plan eliminates Metro’s obligation to fund any capital expenses at the Stadium other than from dedicated revenue sources not tied to General Fund or property taxes at all. Under the existing lease, Metro is required to provide annual funding of $1,000,000 from the General Fund and $4,000,000 from the water/sewer PILOT (Payment in Lieu of Taxes).

5.) Releasing the areas of the Campus surrounding the New Stadium from encumbrances creates enormous economic benefit from the future development rights – including ground rent payments, property taxes, local option sales taxes and other revenues.

6.) As owners of the public land, Metro will enter 99-year ground leases for all developable land. Tenants will not only make lease payments but will also be required to pay ad valorem property taxes as if they owned a fee interest in the land – all to the benefit of Metro’s General Fund.

1. ) The property taxes generated by redevelopment of the Metro-owned property surrounding the new stadium over the course of 30 years is estimated to be $727,647,000. This does not include any of the new property taxes generated by the private development happening elsewhere on the East Bank or in River North, including the Truck Stop property).
2. ) 50% of both the Local and State Area Sales Taxes will be pledged to the repayment of revenue bonds and then made available to fund infrastructure projects supporting the sports facility. These infrastructure projects will include parking and other costs that are included in the conservative East Bank wide infrastructure estimates outlined below. The other 50% of the Local Area Sales Taxes will flow to the Metro General Fund and are unencumbered (not pledged to the repayment of bonds).
   
   + $268,966,667 Pledged 50% Local Area Sales Tax for debt payment.
   + $268,966,667 Unencumbered 50% Local Area Sales Tax in new revenues to General Fund.
   $537,933,334 Total Local Area Sales Tax
   This does not include the $537,933,333 of the State’s portion of the pledged 50% Area Sales Tax, which may be used to fund capital projects.

7.) The Water & Sewer PILOT (Payment in Lieu of Taxes) revenues total $4 million annually. Once the PILOT is no longer pledged to Stadium bonds, Council could allocate it to another purpose such as affordable housing or transit.

8.) Under the current lease, Metro makes available 6,250 parking spaces to the Team for their exclusive right to use and retain all revenues from event days. Under the proposed lease, the Team is reduced to use and revenues of approximately 2,900 parking spaces during Stadium events. Metro receives their use and revenues at all other times.

9.) The new proposal also guarantees the Titans’ presence for the entire term of the lease via a non-relocation agreement.

10.) A brand new, state-of-the-art domed stadium owned by Metro that is ideally located near hotels and our entertainment district that will host a planned 49 events per year, including Super Bowls, Final Fours, College Football Playoffs and dozens of concerts and other major events.

There has been extensive community engagement on the stadium and East Bank Plan. This proposal has involved more opportunities for public engagement than any other in Metro’s history.

1. ) 39 public meetings, including five community meetings with a public comment period in all four corners of the county.
2. ) These were in addition to 50 community meetings surveying neighborhood and community desires for the East Bank, resulting in the Imagine East Bank Vision Plan.
3. ) A dedicated Committee, singularly addressing one topic: the East Bank Stadium. All information, documents, and videos of these public meetings have been consistently posted on a dedicated page found here.

Some have expressed concerns with the State desire to have a minority number of seats on our Sports Authority. While we do indeed have a contentious relationship with the State right now, there are several local municipalities around the country who have State representatives on their local sports authorities, so it’s not unprecedented. There is no “takeover” by the State. That would require them to be totally liable for all debt.

In conclusion, the investment in the East Bank we’re making will bring a major return to our Operating Budget, meaningful development that serves us more equitably, and it won’t be at the cost of Nashville-Davidson County property taxes.

There will be one more public hearing for the stadium as we approach the third and final reading. It will be next Tuesday, April 25th at 6:30pm. Everyone as always is welcome and encouraged to come and express your thoughts on this plan.

Best,

Photo Credit – Tennessee Titans – https://www.tennesseetitans.com/news/titans-release-renderings-of-proposed-new-stadium