Is the proposed $2.1 billion enclosed stadium that would be built on the East Bank of the Cumberland River a good deal for Nashville?

Of all the hard questions that will be asked by Metro Council members and the public during a series of East Bank Stadium Committee meetings between now and the end of the year, that’s the one that will ultimately decide the fate of the most expensive public/private building project in Nashville history.

At-large Council member Bob Mendes, chair of the East Bank Stadium Committee, asked some of the toughest questions during an Oct. 26 meeting that provided the first look at the nonbinding, unsigned term sheet between the city and the Tennessee Titans. Mendes says the Council will proceed with due diligence to answer that question.

“We’re like the public, I think, coming into it with an open mind,” Mendes says. “You know, a guy says to you, ‘I’ve got a deal for you. Sure, it’s the most expensive public spend on a stadium in the history of America but let me tell you why it’s a good deal.’ We’re going to sit down and listen to it.

“It’s going to be a pretty high hurdle to spend more tax dollars on a stadium than any city ever in America. But we do have an open mind to at least listen to the pitch. … I just want people to know the full cost before they get excited about it.”

In mid-October, after months of negotiations, Mayor John Cooper and the Titans announced an agreement to build the 1.7 million-square-foot facility that would seat approximately 60,000 for major sports events, concerts and conventions as soon as 2026.

For construction to begin, the deal must first be approved by both the Metropolitan Sports Authority and at least 21 of the 40 Metro Council members. Those votes likely won’t happen until late March or early April 2023, according to Metro Finance Director Kelly Flannery.

Under the proposal, the city’s stadium funding portion of $760 million would come from bonds issued by the Sports Authority, a 1% hotel/motel tax, and sales and use taxes collected at the stadium and its surrounding 130-campus.

The state Legislature has approved a one-time $500 million contribution toward an enclosed stadium while the Titans would put up $840 million and also cover construction overruns.

The city is considering a new stadium, Mayor Cooper says, because it is responsible for up to $1.95 billion in Nissan Stadium upkeep during the next 17 years. If a new stadium is built, the Titans have agreed to waive $62 million in city liabilities ($32 million for outstanding maintenance bills over the last four years and $30 million in remaining bond debt from the original lease signed in 1996).

The East Bank committee will hold 10 more meetings to discuss details of the term sheet – five for public comment – and that term sheet’s approval will be sought in the Council’s mid-December meeting.

“To ask the team to outlay those dollars without some sort of comfort level around the proposed funding sources … if you guys are a no, I think you owe them the answer that we’re a no on these funding sources and we could revert and see if there are other options,” Flannery said during the Oct. 26 meeting.

“These revenues are dedicated to the construction of a new facility, some of them specific to a domed facility. So I don’t know how you settle for that but I think it’s a lift to ask someone to come out of pocket when we spend the next six months. If you’re a no, be a no. I think we owe that to them.”

District 15 Council member Jeff Syracuse says the upcoming meetings will provide Council members an opportunity to shape Nashville’s future concerning the overall East Bank redevelopment and transportation issues.

“The first compare and contrast you could do between the current deal that we’re locked into about 2039 on compared to the potential new deal is that it does relieve us from having an operating budget component for maintenance and the like. So that part I like,” Syracuse says.

“The next piece we have to figure out is that the percentage of sales tax around the stadium in and around 130 acres. … But there’s the balance to try and achieve.”

State-backed projects

The Titans’ stadium project is the largest of four major projects with state and local government funding totaling a combined $2 billion.

The Sycamore Institute, a Nashville-based independent, nonpartisan public research center, published a stadium subsidies report in June that showed projects in Nashville, Knoxville and Chattanooga had received a total of $1.6 billion in state and local funding. Then, last month, Memphis announced a $684 million multi-facilities renovation plans with an ask of $350 million from the state.

Mandy Pellegrin, author of the Sycamore Institute report, says stadium deals often amount to “trade-offs” between economic and intrinsic benefits.

“On one side of things, you have this idea that the public subsidies create this new economic activity that more than pay for themselves. The literature and the existing research on that is in pretty universal agreement that this is not the case, that these subsidies almost never pay for themselves through new economic activities,” Pellegrin says.

“And then you have these other quantifiable benefits like civic pride – what it says about Nashville to be a ‘Super Bowl City’ and just generally, you know, ‘I want a team and I want a nice venue in my town, and so I’m willing to invest my taxpayer dollars in it.’ And you can’t necessarily put a price tag on that.”

State still on board?

Rumors have been circulating rumors that the state might move to rescind its $500 million portion of the Nashville stadium funding because some lawmakers are upset that Nashville had not pursued an opportunity to host the 2024 Republican National Convention that was awarded to Minneapolis.

Those rumors appear to be part of a larger, long-running political football game between some of the key players in the city and state governments.

Mendes recently was a guest on “Inside Politics” with longtime WTVF political analyst Pat Nolan and both said they were hearing the talk that’s why the Titans’ project is moving forward like it is. The legislature’s next session begins the second Tuesday in January.

“Nothing has actually surfaced that somebody said, ‘I’m going to try to do this,’ but there have been reports – more locker room or hallway talk,” Nolan says.

In that interview, Mendes noted that with final approval for the stadium some five months away, “If the legislature is going to mess with us, they’re going to have time.”

In early October, State House Speaker Cameron Sexton told Axios Nashville that because of the Council’s RNC decision, there had been discussions between Republican lawmakers to reduce the size of the Metro Council.

This week, Sexton told the Ledger that whatever legislative steps may or may not be taken will not affect the state’s $500 million one-time funding of the proposed stadium.

“The state of Tennessee is not going to pull the commitment we made to the Titans,” Sexton says. “That’s a commitment we made to the Titans, that’s not a commitment we made to Metro.

“As far as (the Council) not approving the RNC not once, but twice – they didn’t approve 2024 or 2028 – there will be different things that we will do for that, but it’s not going to be reflected in the Titans’ stadium because that was a deal we did with the Titans, not with the city of Nashville.”

For his part, Mendes says his job is “just do what I think is the best interest in Nashville. … If some of them make a sport of picking on Nashville, so be it. That’s sort of the way the world works right now. I mean, I don’t want them to take money off the table. I don’t want them to do other bad things to Nashville, but I don’t have any control over it.”