Tuesday, December 20, 2022

Tennessee Titans stadium term sheet approved, setting up Tuesday's full council vote

Nissan Stadium in Nashville, Tennessee at sunset. The stadium
would torn down and replaced by a new $2.1 billion stadium
 if city and team officials have their way. Steve Heap / Shutterstock.com

 By Jon Styf, The Center Square, Dec.20, 2022-  Nashville’s Budget and Finance Committee voted
11-2 on Monday to recommend a non-binding term sheet on the basics of the deal to build an estimated $2.1 billion new stadium for the Tennessee Titans.

The non-binding term sheet will head to the full council on Tuesday night for a vote, along with eight attached amendments.

The committee voted against recommending amendments that would have given the city rights to the funds for selling naming rights at the stadium, asking the state to allocate $50 million toward the Department of Children’s Services instead of the stadium and an amendment to require a 27-vote super majority to approve a new non-NFL ticket tax at the stadium that is defined in the term sheet at Titans rent.

"The idea that 'fixing up Nissan is the path with the lowest GO bond debt for Metro' is an aspiration (fairy tale?) and not a fact," Councilmember Bob Mendes wrote about the deal. "Mark your calendar to fact check this in 5 years — the GO bond debt within 0.5 miles to build the neighborhood will be more than updating Nissan."

The deal, as it stands, would require the state to pay $500 million, the city to bond $760 million and the Titans/NFL to pay the remainder to build the stadium. Then, a tax fund projected to bring in $2.9 billion of state and local taxes over the 30 years of the agreement, would be used to pay off the $760 million of bonds and send money to a Capital and Repairs Fund to pay for future stadium upgrades.

That means that, over the span of the deal, $3.4 billion in public funds are set aside for the stadium project not including future tax deals the city is planning to create for a new neighborhood and district on the East Bank next to the stadium.

The stadium will use more public taxpayer funds than any stadium in history.

Titans CEO Burke Nihill said at the meeting that the new stadium lease would again have a "first-class" clause requiring the stadium to continuously meet NFL peer standards but that the team would have to pay for future improvements beyond the projected $2.9 billion tax fund.

When asked about the team’s finances or the amount that the team makes on the current Nissan Stadium deal or would project to make on a new naming rights deal, Nihill said that all of those details are "confidential."

Forbes estimates the Titans are worth $3.5 billion with $481 million in annual revenue, which would likely expand under a new stadium deal where the team retains in-stadium sales from any additional events at the stadium.

In response to Councilmember Emily Benedict’s term sheet amendment that would give Metro Nashville the revenue from a naming rights deal, Nihill claimed that the debt the team is taking on to pay its negotiated portion of the deal requires the naming rights funds in order to happen, saying conceding the naming right revenue was "quite literally an impossibility."

Nihill wouldn’t say how much debt team ownership would take on but said that the naming rights funds would not pay off "less than half" of the debt.

When asked why the deal was so urgent now, Nihill said that Nissan Stadium improvements have become more of a priority for the NFL. Nashville Deputy Mayor Sam Wilcox claimed that "Time can kill deals. ... the landing zone is now."

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