Image Credit: Axel Magard / CC
The Center Square [By Jon Styf] –
Nashville’s Metropolitan Sports Authority on Tuesday unanimously approved the final documents for a proposed new $2.2 billion Tennessee Titans stadium.
The deal must also be approved by the Metro Nashville Council, which will hear a second reading of the bill including the documents Tuesday night and could take a final vote on the stadium plan as soon as April 18.
The state of Tennessee has agreed to bond $500 million for the project while Nashville will seek revenue bonds for $760 million. Metro Nashville is expected to backstop between $250 million and $150 million of the bonds with its general fund.
Metro Nashville released a document including bond and fund expectations for the life of the new 30-year lease.
That document showed that $1.5 billion is expected to be used to pay debt service on the city’s $760 million in bonds over the life of the lease. The city will collect what is estimated to be $2.9 billion in taxes over the life of the lease from a 1% Davidson County hotel/motel tax, state and local sales tax at the stadium and team stores, 50% of the sales tax in 130 acres surrounding the stadium and a $3 ticket tax for events at the stadium.
That would leave an estimated $1.4 billion in tax collections considered excess revenues that can then be used for a variety of reasons, including stadium maintenance, future capital projects at the stadium and bond pre-payment.
Of the projected excess, $308 million is expected to go into a maintenance repairs fund, $480 million to an eligible projects fund for Metro projects surrounding the stadium, $46 million to a debt service reserve fund and the final projected $590 million being split between capital repairs, bond pre-payment and liquidity reserves.
The team must have a Capital Asset Management Plan every three years to have larger stadium projects approved before they are paid through the capital repairs fund.
If the taxes exceed the projected amounts, the fund could grow above the $2.9 billion and so then could the Capital Repairs Fund.
The largest projected tax in the fund is the hotel tax, which is expected to bring in $913 million over 30 years. The hotel tax growth rate, however, is projected at 2% annually while the compounded increase in hotel taxes since 2010 have been 10.9%.
The deal was slightly adjusted in a few areas before the sports authority approving, including adding a stipulation the Titans cannot delay capital improvement expenses at the stadium if the state of Tennessee attempts to block taxes intended for the $2.9 billion fund.
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
