The NFL's Tennessee Titans will be getting a new state-of-the-art stadium backed by record-setting public subsidies.
Nashville's Metropolitan Council on Tuesday voted to approve
Construction costs estimates stand at $2.1 billion, which would eclipse the Allegiant Stadium in Las Vegas to make it the NFL's second-most-expensive venue behind the $5 billion SoFi Stadium in Southern California.
Along with greenlighting development and land use agreements, the council also approved the sale of $760 million of public facility revenue bonds to subsidize construction.
Combined with $500 million of bonds already committed by the state, the total $1.26 billion tally marks the largest sum of public funds ever committed to a professional sports arena in the U.S., surpassing the $850 million in state and local support cleared by New York for a new stadium for the NFL's Buffalo Bills.
"We are grateful to know the Titans will be a part of this great city and state for decades to come," Titans controlling owner Amy Adams Strunk said in a press release following the late-night vote. "We are thankful for the support of Mayor Cooper, Metro Council, the Sports Authority, the State of Tennessee, and most importantly, the people of Nashville and Tennessee as we all embark on this new chapter together."
The Titans have called Nissan stadium home since its completion in 1999 as part of a development deal negotiated under Nashville Mayor Phil Bredesen that
The 67,770-capacity stadium cost a total of $264 million to complete and was supported by a combined $156.8 million in state and local bond sales; under the arrangement, the Metropolitan Government of Nashville and Davidson County owns the facility.
Debt service on the bonds was covered by rental payments and other stadium revenue earned by the Titans and the deal's junior partner, Tennessee State University, whose team they share the field with.
Local officials have debated the idea of a new stadium to replace the aging Nissan since the idea was floated by Nashville Mayor John Cooper last summer after talks with the team's owners.
Criticism of the plan from some city lawmakers and community groups since has centered around the project's high price tag and the sheer size of the government's contribution, with opponents advocating for the renovation of Nissan Stadium instead of the construction of a new facility.
Cooper and legislative allies, however, threw their support behind a new stadium deal, citing in part a
Faced with the challenge of "unfunded liability on an aging stadium," Cooper's office sought out "other options to shift the cost off the general fund," officials said in a statement.
"After months of negotiation, and with a generous contribution from the Tennessee State Legislature, the city and team have agreed to terms that would bring a new, enclosed stadium to Nashville at no cost to the city's general fund," Cooper's office said. "The enclosed option unlocks two revenue sources that wouldn't otherwise be available – investments from the state and the hospitality industry."
The mix of support for the new stadium includes $500 million for general obligation bonds allocated in the state budget in anticipation of the project's local approval as well as $840 million in private funds from the Titans to be covered by revenue earned from the sale of personal seat licenses to season ticket holders and independent funding from the NFL organization.
The $760 million in grant revenue bonds approved by the council yesterday would come through the Metropolitan Sports Authority, an arm of the Metropolitan Government of Nashville and Davidson County.
The deal cleared the council on a 26-12 vote after a five-hour hearing dominated by opponents, according to
The Cooper administration would likely move to issue relatively soon, given an upcoming mayoral election that could upend things, said Metropolitan Council member Bob Mendes,
"The mayor's term ends on Aug. 31 and I bet anything they'd sell their children to get the bonds issued by Aug. 31, just to make sure there's no risk of the next mayor not pulling the trigger for some reason," he said.
Cooper announced in January that he will not seek a second term.
Debt service on the expected 30-year bonds will be covered by a 1% citywide hotel rental tax in addition to a sales tax on goods sold within the stadium.
The terms of that arrangement are meant to target tourists rather than city residents when seeking funds to repay the bonds, the Greater Nashville Hospitality Association, which "strongly" supports the bill, said in a statement.
"We've taxed the hospitality industry before to fund other major investments," the statement said. "The industry sees enormous new opportunities beneficial to the entire region and its residents in sales tax generation, entertainment offerings, and global recognition."
Under the new plan, the Titans will sign a 30-year lease for the new facility and agree to pay off $30 million of outstanding bonds issued to finance Nissan Stadium, and waive claims to be reimbursed for $32 million in capital spending on the existing venue.
The city's new tax streams will continue to funnel commitments to cover future renovation costs for the new stadium and provide additional funds meant for the wider development of the area surrounding the new stadium.
For the city's share of the project, taxpayers are likely to see $3.3 billion in taxes captured over the life of the bonds, in what Mendes described as "stadium construction plus evergreen fund for future improvements."
"$1.4 billion towards the bond and approximately $1.6 billion captured for the team to use for future improvements and some additional infrastructure improvements in the area," he said. "The intent here is to build a new football stadium to build a new neighborhood with the attendant infrastructure around it to help finance the new stadium."
