The Tennessee Titans have never won a Super Bowl but they are a winner in the municipal funding market, topping the Buffalo Bills for the biggest public subsidy ever given to an NFL sports franchise.
(Bloomberg) — The Tennessee Titans have never won a Super Bowl but they are a winner in the municipal funding market, topping the Buffalo Bills for the biggest public subsidy ever given to an NFL sports franchise.
After hours of public hearings overnight, the Metro Nashville City Council voted 26-to-12 on Wednesday morning to approve $760 million in revenue bonds for a new stadium. With a previously approved $500 million state contribution in hand, the public funding for the Titans’ arena now totals $1.26 billion. That’s nearly 50% more than the $850 million that New York State handed the Bills for their new stadium earlier this year.
Despite faltering demand from investors for muni bonds and warnings about teams and municipalities frequently overstating the benefits of stadium deals, while underestimating the costs — sports franchises have been able to petition for public dollars this year. In other parts of the US, Florida’s Palm Beach County raised money to hold onto Minor League Baseball teams while the Milwaukee Brewers sought $290 million to renovate their ballpark.
The Titans’ proposed 60,000-seat, enclosed stadium with a translucent roof is estimated to cost $2.1 billion, and the Titans will be on the hook for cost overruns and maintenance. Construction is expected to commence in 2024, with a grand opening anticipated in 2027, according to a statement from the team on Wednesday.
The new facility would replace Nissan Stadium, which first opened in 1999 and has been home to Titans ever since. The team was initially weighing the costs of renovating Nissan Stadium against plans to develop an entirely new structure. Due to inflationary pressures and with a $1.88 billion price tag estimated for renovations, the overhaul plan was scrapped.
The $760 million of stadium bonds will be repaid through an increase in Davidson County’s hotel occupancy tax, in-stadium sales tax, 50% of sales tax from future development of the stadium’s campus, rent paid by the team, and a pre-existing ticket tax of three dollars per-ticket-sold that will carry over to the new building.
Nashville’s General Fund will no longer be obligated to maintain and upgrade the new stadium under terms of the agreement. The accord also includes a 30-year lease and non-relocation agreement between the Titans and the Nashville Sports Authority. The team has also committed about $48 million over the course of the lease to support city needs like public education, public transit and affordable housing.
“Tonight is a huge win for Nashville taxpayers,” said Nashville Mayor John Cooper in a statement. “We’ve eliminated a billion-dollar liability created by an aging stadium lease and created a platform for the city to thrive for decades.”
–With assistance from Philip Tabuas.
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