Monday, August 22, 2022

Report: Cost of renovated speedway at Nashville Fairgrounds has increased to $100M

By Jon Styf | The Center Square, Aug 16, 2022  - A deal to renovate the Nashville Fairgrounds Speedway is still not complete and will now cost $100 million instead of $75 million, according to a report from the Nashville Banner.

Much of that funding is expected to come from $17 million directly appropriated from the state in this year’s budget and by the state and Metro Nashville giving all sales tax funds back to the speedway. In 2021, the speedway was purchased by Speedway Motorsports, which owns tracks across the country including Bristol, Charlotte, Atlanta and Las Vegas.

The Banner also reports that Nashville’s Convention and Visitors Bureau will make $1 million annual payments toward the fund to pay off the bonds for 20 days per year of use of the speedway.

According to a financial audit, the Convention and Visitors Bureau received $10 million from Metro Nashville and nearly $5 million in federal grants as part of its $21 million in funding in the fiscal year ending in June 2021. The Tennessean reported in 2018 that most of the Convention and Visitors Bureau funding then came through hotel taxes.

According to the Banner, the change in cost will require the bond debt payments to increase from $4 million to $5 million per year.

The sales tax deal on purchases at the speedway went into effect more than a year ago after it was signed into law by Gov. Bill Lee.

According to the fiscal note on that bill, the track currently brings in $65,400 in taxes per year but that number could grow to an estimated $734,000 per year if a NASCAR Cup Series race comes to the fairgrounds.

If a Cup Series race came to Nashville, it would lead to an estimated $14 million in taxable revenue.

Economists have shown, however, that taxes collected a new sports stadiums are not new money but are instead displaced spending from elsewhere in a community.

So those sales taxes currently collected elsewhere in Nashville that would go to the state and city would instead go to the speedway in the future to pay the debt on the renovation.

"When it comes to collecting tax money for stadiums, there is no found revenue," sports economist J.C. Bradbury from Georgia’s Kennesaw State University previously said. "When you introduce a new tax, it’s mainly local people who are paying it, so they’re just not spending it somewhere else. There’s not a free lunch.”

The Banner reported that both Bristol Motor Speedway and the city commissioned studies on the revenue potential for a redeveloped track but nothing studies have been made public and neither entity would release those studies.

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