Governor’s office unveils plan to fund new Titans stadium
NASHVILLE, Tenn. (WSMV) - Governor Bill Lee’s budget amendment that includes a $500 million bond authorization for a new downtown Nashville football stadium was submitted to a Senate committee on Tuesday morning.
The governor’s budget proposes the bonds toward completion of a new covered stadium to replace Nissan Stadium.
“We feel like it’s an overall economic benefit to the state. It is far more beneficial to the state to be able to have this covered stadium than not,” Department of Finance and Administration Commissioner Butch Eley told senators.
The Tennessee Titans and the Metropolitan Nashville Government had been working on a plan to renovate Nissan Stadium. However, the price of the renovation increased to the point that it may be more cost-effective to build a new stadium.
Titans season ticketholder Cameron Beasley said the Titans need a new stadium.
“It’s needed. It’s been needed for a while. The stadium is really outdated,” Beasley said. “If you ever go visit any other NFL stadium for games or for concerts or for anything, we’re old. We’re an old stadium. Lines are always long getting in, getting out, getting to restrooms, getting to concessions. It’s all needed overall for a long time.”
According to the presentation of the budget amendment by Eley to the Senate committee, the investment is not just in the Titans, but national, international and year-round revenue opportunities for Tennessee. The state would fully fund the debt service to show the commitment to creditors. Municipal and private sources will make up a majority of the funding.
Sen. Jack Johnson, R-Franklin, said last year the General Assembly passed comprehensive legislation in regards to the Titans.
He said in historical context, the state previously had issued some bonds and paid for some infrastructure development, and the sales taxes that were collected inside the facility went into a fund to service the debt. Legislation passed last year restructured that arrangement.
“It allowed the Titans to keep the sales tax generated inside the facility while continuing to service the debt. I believe that initial bond issue is scheduled to be repaid in 2029,” Johnson said.
Johnson asked why the additional $500 million was requested on top of what legislators passed for the Titans last year?
“They have come and said if we could get help from the state, help from the local government, that they would certainly do their share in creating a much more state-of-the-art facility that would be a year-found facility that would offer covered roof where we could have activities year round and be able to host a number of activities, concerts and things we can’t do now or things many of the performers chose not to do because it isn’t stable and covered,” Eley said. “This would include things like the Super Bowl, Final Fours. We felt like that would be a good investment for Tennessee. The long term economic impact would pay off and this year was a good year to go and put our stake in the ground.”
State officials said the $500 million in bonds was a number it came up with, not a requested amount from the Titans, the primary tenant of the stadium. The number was based on the cost of recently built stadiums and the proposed stadium announced on Monday for the Buffalo Bills.
How will the state make its money back from the $500 million bond?
“What we envision is that when that property is, when you said is developed over the coming years, that our portion of those taxes coming off of that would go toward being able to fund this $500 million investment. That’s how we would envision funding that,” Eley said. “We don’t know what that revenue stream looks like, but we feel like all of those dollars going toward that would allow us to be able to invest in that without current taxpayer dollars going to that.”
News4 asked Beasley, a season ticket holder, his thoughts about the state chipping in to pay for the new stadium.
“You’re talking about publicly funding a private business to build a structure. It will create some new jobs and it will create a little bit more tourism with more events and things happening there,” Beasley said. “I assume they will try to get a Super Bowl.
“I think we need a new stadium, so it’s a tough question. I would like to know the cost-benefit analysis on how it’s going to affect the area and the surrounding area and not just downtown. They’ve requested the bonds. If they pay that back, I don’t have near as much of a problem with that as just pulling it from some other funds elsewhere.
One lawmaker asked what criteria will be used by the administration on whether or not to issue the bonds.
“Before the bonds would ever be issued, they would still have to come before the funding board and be signed off by that body. There will be another opportunity to look at this before the final funding would go into effect,” Eley said. “We certainly believe because of inflation and other things that being able to send a signal to allow them to continue their process knowing that our intention is to do this is good timing.”
“Should we not wait until we have a clearer picture before we make a commitment to authorize the administration $500 in bonds,” one senator asked.
“We feel like being able to stake our ground now and what the state of Tennessee is willing to do in order to expedite or incentivize this investment for the state that the sooner we’re able to do that, hopefully get this project moving, rather than delay, that it will for sure save dollars in the long run of the overall cost. If we waited a year or two, the cost to the state could be much more,” Eley said.
Tennessee Titans President Burke Nihill told the Nashville Sports Authority the National Football League is beginning to put pressure on the team for the need of a new stadium.
Nihill also said the team did not plan for Nashville taxpayers to pay for the stadium.
“We are committed to maintaining the priorities from a financing architecture – we do not want the taxpayer today or any day to have any obligation to be funding the NFL facility in town,” Nihill told the Sports Authority.
Nihill said cost estimates in January were breathtakingly high, almost double what was expected.
Mayor John Cooper said earlier this month the city is not in the stadium business.
“We’re not in the stadium business, you know, we’re in the educating kids business, we’re in a safer street and road business,” Cooper said two weeks ago. “The Titans have been a very good partner for Nashville and it’s fun to have them, but fundamentally, the city is not in the entertainment or stadium business itself.”
The Mayor’s Office released a statement on Tuesday after the governor’s budget presentation.
“We appreciate and welcome the Governor’s willingness to make this potential investment in Nashville. For the last twenty years we’ve loved hosting the Tennessee Titans under the original lease, and that first lease now obligates us to provide and maintain a first-class stadium. Mayor Cooper is committed to two goals: keeping the Titans in Nashville for generations to come, and doing that in a way that does not divert tax dollars from education, affordable housing, infrastructure, or other general fund obligations. We are continuing to study stadium options that allow us to do both.”
Cooper was instrumental in gaining an agreement with Nashville SC calling for the soccer team to fully fund construction of GEODIS Park, which opens for its first game next month.
The Beacon Center of Tennessee, a non-profit free-market think tank based in Nashville, is opposed to the state issuing bonds for the new stadium.
“The recent news that Governor Lee is seeking to allot up to $500 million in taxpayer-backed bonds to build a new Titans stadium is extremely disappointing. As we have long said, it is not the job of either state or local governments to help fund the pet projects of millionaires and billionaires. The government should never force hard-working Tennesseans from across the state, or even Nashvillians, to back funding for a stadium that many of them will never even visit. While we love football and love the Titans, we should be following examples like the Super Bowl champion Rams in Los Angeles, which relied on no upfront tax dollars for the construction of their state-of-the-art stadium. It worked there, and it can work here, too.”
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