Should we punt or go for it?

Would a new enclosed stadium benefit the area? Define benefit

Friday, October 28, 2022, Vol. 46, No. 43
By Tom Wood

Call it the biggest home game in the history of the Tennessee Titans. Not the one this past Sunday at Nissan Stadium against the AFC South archrival Indianapolis Colts, nor any of the upcoming ones on the Titans’ 2022 schedule.

This drama-filled home game of political football is all about the proposed $2.1 billion enclosed stadium that – if it wins final approval from the Metro Council sometime next spring – would become the biggest public/private building project in Nashville history.

But the plan, which would anchor the visionary redevelopment of the East Bank along the Cumberland River, has been the focus of growing debate over the last few months from both sidelines.

As it now stands, stadium funding would come from the state Legislature (a one-time $500 million contribution toward an enclosed stadium), the Titans/NFL ($840 million that would also cover construction overruns) and the city ($760 million that would come from bonds issued by the Metropolitan Sports Authority, a 1% hotel/motel tax, and sales and use taxes collected at the stadium and its surrounding 130-campus).

In announcing the agreement, Nashville Mayor John Cooper said Nashville general funds will be protected by voiding the current lease with the Titans that puts the city on the hook for up to $1.95 billion in stadium upkeep over the next 17 years.

Under the proposal – a 27-page, nonbinding term sheet – the Titans would be responsible for future maintenance and upgrades at the new enclosed stadium. Also, Cooper noted, 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).

“Doing nothing was not a legal option for us, and renovating the current stadium proved to be financially irresponsible, so we are proposing a new stadium paid for by the team, the state, tourists and spending around the stadium – not by your family,” Cooper said in an Oct. 20 statement.

In that context, the stadium project makes sense – seemingly a win/win for both the city and the Titans.

The 60,000-seat enclosed facility could open as early as 2026 and possibly host a Super Bowl by the end of the decade, as well as year-round concerts and other major sports events. Score one for the Titans.

At the same time, the mayor’s office says, the new deal will protect general fund dollars that could “otherwise support essential priorities like public schools and first responders.” Score one for Nashville.

But is that really the case? Unlike the game of pro football, where there are usually clear-cut winners and losers, answers to the stadium questions depend on who you ask.

“I think there is an assumption that there has to be a winner and a loser and there has to be sides,” Titans president and CEO Burke Nihill says.

“But the objective from the beginning was to take what is a very unique challenge in terms of the current lease and an aging building and to identify the unique opportunities that could actually turn this into a legitimate win, win, win across the board. And we are pleased. We believe we landed on that option.”

Metro Council member Bob Mendes, speaking last week with longtime WTVF political analyst Pat Nolan on his “Inside Politics” show, framed the agreement between the mayor and the team as “the first chapter” of a process that must be approved by both the Metro Sports Authority and Metro Council.

“I think there’s a lot of questions. I mean, the reality is that the first chapter is closed,” says Mendes, chair of the East Bank Stadium Committee. “The private negotiation between the team and the mayor’s office is over. And now the public and the Council is getting to hear what the actual proposal is.”

But “first chapter” probably isn’t the best analogy for the hot-button political football topic. Instead, let’s stick to football terminology and plow forward like Derrick Henry as the stadium issue pushes toward the end zone.

First down: Kicking off

Pregame warmups might be a better way to think of the agreement between the Titans and mayor’s office. True, there was a period of intense negotiations between the two parties, but after the dust settled, the two sides met at midfield and shook hands.

“I’m grateful to Amy Adams Strunk, Burke Nihill and the entire Titans organization for their commitment to Nashville,” Cooper says. “Residents’ tax dollars can go to core city services because the Titans have stepped up to cover future ongoing maintenance on the new stadium.

“I’d also like to thank Gov. Lee and our partners at the state Legislature for recognizing the Titans’ enormous economic contributions. Together, we are making sure that the Titans stay in Tennessee for generations to come.”

Titans controlling owner Strunk hailed the agreement as a link to Nashville’s NFL past and future.

“When my father (franchise founder Bud Adams) brought this team to Tennessee 25 years ago, I don’t think he could have imagined a better home for our organization,” Strunk says. “The way the people of Tennessee have embraced this team as their own is truly something special, and I am thrilled that with this new agreement, we will cement our future here in Nashville for another generation.”

So with the pleasantries out of the way, what’s next?

The Metro Council got its first detailed look at the nonbinding term sheet Wednesday, Oct. 26, and had plenty of questions about the package.

On the “Inside Politics” show, a skeptical Mendes said the Council was being asked to consider three pieces of legislation – a resolution to approve the term sheet, an ordinance to start a hotel occupancy tax and a resolution that gives the Titans authority to secure a real estate development partner for the East Bank project.

“They want to know that directionally, the Council is or is not supportive of where they’re at,” Mendes explains. “There are definitely parts (of the agreement) that aren’t done.

“One example is I don’t think the team and the mayor’s office have fully figured out how parking will work in the area (once construction starts), and that’s still to be negotiated. And there’s just a lot that goes into a $2 billion deal.”

The new stadium would be between Nissan Stadium and Interstate 24. The greater East Bank would include offices, restaurants and clubs, transit stations and affordable housing to be built during the next 10-15 years.

Meanwhile, the Titans would return 66 acres where Nissan Stadium sits back to the city for an urban park.

Speaking at a recent Metro Sports Authority meeting, Nihill acknowledged that while 2026 is the goal to complete the stadium, “months of work” remain before the Council says yea or nay to the project.

“At this point it’s a term sheet, and there’s a process to go through with (the Sports Authority). There’s a process to go through with the City Council. There’s a process to go through with the community – and we’re not going to rush that process,” he says.

“We’re not going to drip-brush the design process when we get to that place to get 2026 open. This is not a building that’s being built for a single season. It’s being built for generations, right? But absolutely, right now, 2026 is the goal.”

Second down: Offense vs. defense

Nihill says a new stadium with a translucent roof would allow promoters to pursue top-tier concerts year-round, major sports events like the NCAA Final Four, the College Football Playoffs, WrestleMania, etc., but also serve the community in other ways by providing year-round meeting space for job fairs, job training and classroom work.

“We really want to not have the community see this as just the Titans’ football field. It’s not at all that. This will be a building that can be used as the peoples’ house,” he says.

Quizzed about having 9,000 fewer seats than 69,143-seat Nissan Stadium and whether that would disqualify them to host a Super Bowl, Nihill said he’d been in contact with Peter O’Reilly, NFL executive vice president for club business and league events.

“He says, ‘There is no minimum stadium capacity that precludes the stadium from hosting the Super Bowl, America’s most-watched event.’

“What I will tell you is I have absolutely every expectation that while the NFL cannot commit to those sorts of things – there’s a process behind it – this is the type of building that will absolutely get a Super Bowl, if not multiple Super Bowls.”

Nihill then explained the thinking behind the smaller stadium, saying basically that less is more. The team has been working with architects so work can begin once a deal is approved.

“This will be, our belief is, the best building with the best experience in the country at 60,000. We are also acutely aware of the fact that Nashville is a unique market in its ability to attract non-football events,” Nihill says.

“So our expectations between the building that is designed in that manner, plus having an enclosure so events can be happening all year-round, that there will be many, many, many, many more people coming through that building than this current building today.”

Nihill said the team will credit current personal seat license (PSL) holders with the same value for a PSL in the new stadium and also strive to keep ticket prices similar to what they are now.

“Our mission is to win, serve and entertain. And entertaining is entertaining this entire community,” Nihill says. “So from our perspective, we don’t do that if we don’t have these similar entry points that allow people of all incomes to be able to afford to come watch a Titans game.”

Third down: Punt or go for it?

So, is a new stadium good for Nashville and its taxpayers?

That question was put to Vanderbilt communications professor John Koch – a senior lecturer and director of debate whose areas of interest are public memory and the intersection of political culture, rhetoric and sports – and Brian Straessle, interim director of The Sycamore Institute, an independent, nonpartisan public research center based in Nashville.

Both say it’s a matter of perspective, that while Nashville has its share of issues, there is an intrinsic value to being able to host major sports events that bring more free-spending visitors and pump millions of dollars into the local economy.

“Like with a lot of things, there’s probably pros and cons to it,” Koch says. “The pros are Nashville wants to host things like the Super Bowl and the College Football Playoffs, and certainly having a domed stadium puts Nashville in competition for those types of events, which will, of course, will bring more tourists and revenue into the city and further mark Nashville as a ‘it’ city.

“It looks like it’s all part of that East Bank project, if I understand correctly, which is going to bring housing and businesses by the stadium. So more and more economic growth in the region. I don’t know if it’s necessarily a con, but Nashville does have problems,” he adds.

“We have infrastructure problems in terms of transportation. We have affordable housing problems. So some of the critics of the stadium are probably right to wonder how are you going to address those things.

“If we can address both of those issues plus build the stadium – and if the stadium is actually going to be able to help raise tax revenue to help address some of those other issues.”

In May, The Sycamore Institute released a report written by deputy director Mandy Pellegin that showed the state Legislature is not only backing the Nashville stadium but also baseball stadiums for the Tennessee Smokies in Knoxville and the Chattanooga Lookouts. Total investment by the state and local government is $1.6 billion.

“There’s almost unanimous opinion among economists that pro sports stadiums don’t often generate enough new economic activity to pay for the public subsidies that they receive. Now that’s not the same as never, but it is very rare,” Straessle said of the projects in Knoxville, Chattanooga and Nashville.

The Titans stadium, Straessle says, is a complex issue with simple choices.

“The really important thing when as either a citizen or a member of the Metro Council or anybody who’s going to be making decisions about this, is to make sure you have a very clear understanding of the potential benefits of going down one path or another and the potential financial and opportunity costs of going to one path or another,” Straessle explains.

“You’ve got to weigh the benefits against the financial costs and the opportunity costs – like what else could we have done with this land or with this money? So, it is not really a science. There’s a lot of art to it and a lot of values that people are going to bring about what is it that you want your city to be.

“If subsidizing an NFL stadium isn’t necessarily an economic slam dunk, then is it just something that you want to pay for as a citizen? And if the answer is yes, then there’s your answer. If the answer is no, same thing.”

Straessle says Metro Council over the next few months will be “trying to compare some hard costs and soft costs against some hard benefits and soft benefits. … And people have to make value judgments about what it is they want to have for their community.

“One of the one of the other reasons that lawmakers might want to subsidize a professional sports venue is because they just take pride in having a sports team that they root for and they want to be able to say that, well we’re seeing that you know can host an event like the Super Bowl, so that means we’re in the top-tier cities in the country.’ That is a very hard-to-quantify benefit that some people might see out of this.”

“So, again, when you’re looking purely at the numbers, these sorts of deals very rarely pencil out to be a net positive. But at the end of the day, people have to look at all of the different potential costs and benefits and make a judgment on what kind of city they want to have and what they might be willing to pay for to get to get it.”

Fourth down: TD or interception?

Metro Council will decide the fate of the stadium proposal sometime next spring and, by extension, some of the direction Nashville is headed. Approval will need 21 votes from the 40-person Council.

There are many questions that need to be answered between now and then, and Mendes is attempting to do the proper due diligence without being rushed.

“Our committee intends to hold five public comment meetings, and we’re going to hold them around the county. Tentatively, in Antioch, Bellevue, Hermitage North Nashville and then somewhere close to the stadium in East Nashville,” Mendes says.

“They’re not pushing hard yet, but it’s clear that they want it to move quickly. My perspective is it took two years for the mayor to get to 27 pages (the term sheet). The public deserves to take a couple minutes to look at it.”

Related issues to the stadium include East Bank project development, both commercial and residential, which is increasing every day and infrastructure is having a hard time keeping pace. The East Bank project could include a new bridge across the Cumberland River and transit stations that would help alleviate traffic concerns.

Mendes says Metro taxpayers will be impacted by the upcoming projects no matter how it’s spun.

“It defies logic to have the biggest public spending in the history of America on a stadium and say that it doesn’t impact taxpayers,” Mendes says.

“And in addition to the $2 billion the city’s talking about spending, (there’s) hundreds of millions of dollars to build the infrastructure for the new neighborhood – and that definitely gets paid for by what the mayor calls the general taxpayer.”

On to the next game

Butch Spyridon, CEO of the Nashville Convention & Visitors Corp., has a history of helping bring top-tier sports events to Nashville – from the SEC men’s and women’s basketball tournaments at Bridgestone Arena to IndyCar racing to the MLS Nashville SC team at Geodis Park to the Rock ‘n’ Roll Nashville Marathon to the 2019 NFL Draft, which drew a record 600,000 fans to the three-day event.

Spyridon says preliminary work has begun in pursuit of a Super Bowl.

“We are obviously interested in pursuing a future Super Bowl with the Titans. The first step was to submit an expression of interest form to the NFL, which has been done,” Spyridon says.

“If the stadium is approved, we will start formal discussions with the NFL to better understand expectations and potential bid dates. We would most likely bid on an open year between 2028-2030. The ultimate goal is to demonstrate to the NFL that Nashville deserves to be considered for rotation for the Super Bowl. We are also looking at every other logical opportunity out there in addition to the Super Bowl.”

The 2023 Super Bowl is headed to Glendale, Arizona, followed by Las Vegas in 2024 and New Orleans in 2025.

Nihill says the NFL generally likes to put the Super Bowl in a new facility a couple of years after it opens.

“They want to have a season or two to get the kinks out,” Nihill says. “So whenever this building opens, I would not anticipate that we would be on the shortlist for that year. But once the building has gotten the kinks out, I absolutely believe it will be in strong consideration by the NFL.”

But it all hinges on the outcome of that home game about to be played out in Nashville’s political football arena.