Wednesday, November 23, 2011

Nashville Gives Away the Store for Hockey

The Predators Deal is an Outrage!
I am not a big sports fan. I have only been to one Predators hockey game and that was as a guest of someone else. However, I know many people really love hockey and I can see that it benefits the city. The bars and restaurants of downtown are packed on a Predators game day.  Hockey brings a vibrancy and excitement to downtown. However, at what price should we pay to keep hockey in Nashville?

The Tennessean recently ran a story revealing that Nashville is unique in that unlike other cities we subsidize the operating cost of the arena.  To learn more about this squirrely deal, follow the above link.   We not only pay the bonds on the facility but we give the Predators $7.8 Million a year to operate the center.

In principle, I would prefer that government not subsidize arenas, stadiums, or convention centers. I would prefer that the private sector build those facilities. I am enough of a pragmatist, however, to realize that we must compete in the world in which we live. If other cities are going to build conventions centers, and stadiums and arenas,  we must do so also.  In building these facilities however we should base our decisions on whether or not it is a wise investment and we should strive to get the best deal possible for the city. It appears to me that we have made some poor business decisions. We have been snookered. We have been screwed.

During the debate about building the new convention center, proponents argued that the new convention center would not cost the tax payers one cent, that the convention center would be paid for out of the hotel-motel tax revenues. Well guess what?  The annual $7.8 million dollar subsidy the city has been paying the Predators for operating the arena was paid out of the hotel-motel tax  but now that revenue goes to pay the debt for the new convention center. The subsidy to the Predators will now have to come out of the General Fund. That means we must raise taxes or cut $7.8 million out of city services such as police and schools and libraries and parks and public works.

One of the most amazing things to be revealed in the Tennessean piece is that the more events that are held at the arena, the more the city must subsidize the Predators and yet we provide incentives to encourage more events. What kind of deal is that?  

In addition, if all of this was not bad enough, all sales tax generated by non-hockey events at the arena goes to the predators, not the city as revealed in this Channel 5 report below:

This is really an outrage! It is especially appalling that the Garth Brooks flood relief concert sales tax revenue went to the predators rather than the city. Someone in the State Legislature had the language inserted into a tax bill giving this tax revenue to the Predators. The Dean administration claim to have had no roll in this but that had to be complicit or asleep at the wheel to allow that to happen.

The Hockey deal must be renegotiated. For starters, as soon as the Legislature reconvenes, the sweet-heart tax deal giving the Arena-generated sales tax to the Predators should be repealed. The Metro Council needs to pass a resolution urging that this be done.

Then, the rest of the deal needs to be renegotiated. Unless we can get a better deal, hockey may not be worth the price.

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