Tennessee Titans ‘very grateful’ for state funding; much more to do
Tennessee Titans President Burke Nihil said he felt “grateful” Thursday after state lawmakers ushered in substantial funding for a new closed NFL stadium.
But there is still a long way to go before an agreement is reached.
The Senate and House on Thursday passed a state budget that will include $500 million in bonds to build a closed stadium. The cost is estimated to be between $1.9 billion and $2.2 billion, although inflation is rapidly increasing costs in all areas.
It’s part of a complex financial package that will largely depend on future revenues from the site and a surrounding 100-acre tax district.
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Metro leaders have been planning new infrastructure, transportation, parks and public amenities for more than a year, part of a multi-pronged effort to expand downtown across the river to eastern neighborhoods and north of Nashville.
Hundreds of acres on the east bank are slated for redevelopment by private investors working with planning officials on a cohesive design for the now industrial area.
“We are in constant communication and collaboration with the mayor and his office,” Nihil said. “We continue to work with them to find an elegant solution. There are a lot of details to iron out.”
The Titans’ bid for a new stadium in Nashville bills itself as a modern class of technology-enhanced stadiums filled with premium club seats spread across the country.
Allegiant Stadium in Las Vegas, Highmark Stadium in Buffalo and, of course, the jaw-dropping $5.5 billion SoFi Stadium in Los Angeles all enhance the fan experience.
Cashless transactions, easy security checkpoints, grab-and-go concessions and fast broadband internet infrastructure that facilitates all this technology and eventually real-time sports betting will be expected by fans of the future, analysts say.
The Titans and heads of state hope to build a “first-class venue with a roof” in time to host the 2026 World Cup, although FIFA has yet to name the host cities. Nashville tourism leaders are aggressively lobbying for this high-cost event.
“A building with a roof would definitely open up opportunities that don’t exist today,” Nihil said. “Nashville is an attractive market in itself for the biggest events in the world. The NFL Draft in Nashville was by far the most successful draft in history.”
He said an indoor stadium could attract WrestleMania, college football championship games, the Final Fours and Super Bowls. Thus, bringing in millions of dollars in new business and tax revenue.
“We expect to be on all of those lists — us, being Nashville,” Nihil said. “We are in constant communication and collaboration with the mayor and his office. We continue to work with them to find an elegant solution.”
“A value dominated by entertainment”
State officials echoed Nihil’s optimism, justifying the public spending because a domed stadium changes the type of events Nashville can host.
“When you decide to create a dome-type facility, all of a sudden we go from a football-dominated place to an entertainment-dominated place,” said House Speaker Cameron Sexton, R- Crossville. “It just multiplies who he can bring in and what he can do.”
A new domed stadium in Nashville will compete against a growing field of contenders.
Atlanta, Dallas, Detroit, Indianapolis, Las Vegas, Los Angeles, Miami, Minnesota, New Orleans and Phoenix all have domed or retractable roof stadiums and have hosted one or more of these types of events, according to a review. Tennessean.
The Nissan Stadium was built for $290 million in 1997, including $55 million from the state. Approximately $32 million of remaining debt on the current stadium is expected to be paid off by the end of the Titan’s lease with the Metro Sports Authority in 2028.
Metro is required, as the stadium owner, to maintain Nissan Stadium in a “first class” condition. But the maintenance and necessary upgrades of the current facility are expected to be high for years to come.
Metro Nashville and Tennessee Titans officials planned to spend $600 million on Nissan Stadium renovations last year. But a final engineering report revealed more than $1 billion in work needed and significant ongoing maintenance costs.
In addition to the state’s $500 million, a 130-acre tax district including the stadium and a future neighborhood to be developed around it, will return a portion of future state sales taxes from the project to the costs of construction.
Negotiations between Metro and the stadium are ongoing, and Mayor John Cooper has yet to indicate what the city might do. Cooper’s office did not respond to a request for comment.
The Titans and Metro officials are likely to make substantial contributions, all of which are expected to be repaid from project proceeds. The NFL and other private investors are likely to be other major sources of funding.
Public discussions on the deal are expected to continue throughout the summer, officials said.
A big investment
The Titans estimate that having a stadium closed would add approximately 15 additional ticketed events per year, which would bring in $225 million per year in local economic impact compared to the current Nissan Stadium.
But some academic research efforts aimed at quantifying a stadium’s true economic impact on a community have struggled to find adequate data.
Different studies use different values to quantify public investment like this, and many fail to separate resident spending from tourism spending, according to a study published in Economic Development Quarterly titled “Suggestions for the Needed Standardization of Determining the Local Economic Impact of Professional Sports”. “
The report argues that projections of the economic impact of stadiums and arenas are often inflated.
“The public often over-invests its meager public resources in these professional sporting activities relative to the benefits the professional sporting activity generates for the jurisdiction,” the report states.
He recognizes that “professional sport can provide an intangible benefit to the community that hosts it” and advocates that this intangible contribution be valued in monetary terms. But he notes that the community benefits are limited to the area around the stadium.
“A border that includes more than the granting jurisdiction, misattributes regional benefits as accruing to the smallest area of those who actually pay the subsidy,” he says.
— Cassandra Stephenson contributed to this report.
Sandy Mazza can be reached by email at [email protected], by calling 615-726-5962 or on Twitter @SandyMazza.