Mayor Proposes $275 Million Soccer Stadium Deal – Nashville Scene
Nashville’s Major League Soccer expansion bid group and Mayor Barry’s office are proposing a $275 million, 27,500-seat soccer-specific stadium project at the Fairgrounds Nashville complex. The investor group, led by billionaire John Ingram, would ultimately be responsible for $250 million, while the city’s cost would be $25 million from general revenue.
The stadium question is the last piece for a bid to bring MLS to Nashville. With an ownership structure in place and a desirable market, having a viable stadium plan is seen as the last piece to put Nashville near the front of a line of a dozen cities seeking a franchise. The MLS Board of Governors is set to name two expansion franchises in December — Sacramento has sewn up one of the bids — and Nashville has emerged in the past nine months as a strong contender for the second bid.
“Make no mistake, this is a tremendous benefit to our city and to the community of Nashville,” Barry told the council Monday at a specially called meeting. Also present were representatives from the ownership group, the mayor’s office and much of the Metro Council. “John and his team really do care about our city,” Barry added. “And they believe as we move toward the momentum of soccer that this will give Nashvillians another chance to have a major league team that the city can come behind, rally behind, get behind just like we do the Titans and the Predators. I think we are absolutely ready for this. Nashville is a soccer city.”
Under the proposal, the city would issue up to $225 million in bonds through the Sports Authority and issue the team a 30-year lease. The ownership group would cover the debt service through a mixture of rent, captured taxes from revenue generated at the stadium and private investment. The stadium is expected to cost $250 million, and $25 million would go to fairgrounds improvements.
Crucially, the team would assume the liability for any cost overruns at the stadium. When the Nashville Sounds’ stadium, First Tennessee Park, was built, the city ended up on the hook for almost $10 million more than the projected $60 million that was negotiated by then-Mayor Karl Dean.
The ownership group would be responsible for the annual debt service with one exception: If sales and ticket tax revenues are below $4 million per year for the first five years of operation, or $3 million per year in years six through 10, Metro agrees to contribute the difference from non-tax revenues.
The city’s chief operating officer, Rich Riebeling, who has been stressing that the deal would be a “private-public partnership, emphasis private,” was quick to defend the proposal.
“We have done everything there is to minimize any potential downside to the city,” Riebeling said.
“We are making this investment in Nashville because we believe in this city,” Ingram said on Monday. “This is a can-do community, and we know bringing Major League Soccer here is something sports fans want. We are an international city, and soccer is the world’s sport.”
The next step is for the Metro Council to approve the deal contingent upon Nashville being awarded a franchise. According to a timeline provided by the team, a successful bid would mean Nashville would begin play in MLS in 2020 and move into the new stadium in 2021.
The deal represents a departure from the Dean administration, which lost a referendum on redeveloping the fairgrounds and Nashville Speedway. Barry said her administration is committed to preserving all current uses of the fairgrounds, and the deal would fully fund the property’s master plan, which calls for rebuilding the aging expo and fair facilities.
“This proposal honors all existing uses of the fairgrounds, and will pave the way for those groups and activities to grow and thrive,” Barry said. “John Ingram and his fellow investors are bringing significant private investment to the site. Overall, this plan will improve the fairgrounds and benefit future generations to come.”
Metro would also lease 10 acres of what it terms as “underutilized” land at the fairgrounds site to the ownership group for a mixed-use development and “workforce housing.” That piece of the proposal attracted questions during and after the meeting. Ingram said the Turner family, whose MarketStreet company developed most of the Gulch, has joined the bid group and would develop that land.
“There’s a lot to examine, and as always with Metro, it’s the free land deal underneath that most of us will have trouble with,” said At-Large Councilman John Cooper.
Council member Freddie O’Connell had questions for the administration about non-soccer uses of stadium, citing the relatively underused Nissan Stadium. Riebeling noted that Nissan Stadium is too big for many events, whereas he anticipates the new facility would accommodate many civic uses along with concerts and other soccer games.
At-Large Councilwoman Sharon Hurt, raising questions about the stadium’s benefits beyond just soccer, asked, “How can this project help people who can’t afford to attend soccer games?” Metro officials insist there will be economic benefits for the city as a whole. Hinting at another big project just over the horizon, they also pointed at a potential transit line that would go right by the location.
At the end of the meeting, Vice Mayor David Briley noted, positively, that it’s rare for deals like this to be driven by local investors.
When MLS announced its expansion process last year, a group led by former state ECD officials Bill Hegarty and Will Alexander seemed to be a longshot bid, mainly due to Nashville’s size. But one by one, perceived frontrunners like St. Louis and San Diego ran into trouble with their bids. At the same time, the Predators’ run to the Stanley Cup Final, coupled with impressive attendances for international soccer games at Nissan Stadium in July, boosted the city’s reputation as a sports town.
Belmont professor Adam Pfleegor told the Scene earlier this year that he thinks the market is there for an MLS team, as long as it can foster a good fan experience.
“The demographics are there, the marketing dollars are there,” Pfleegor said. “The key is going to be the facility and almost modeling themselves after the Preds. It’s not a European team. It’s a soccer team in the South, and if they can embrace that and go with the local culture, it could be a really positive experience.”
Ingram and his group had approached Vanderbilt as a potential partner, offering the stadium as an off-campus replacement for the dilapidated Vanderbilt Stadium. Last week, the university decided to keep football on campus, but said it would rent the stadium for a couple of dates a year.
If the bid is unsuccessful this year, MLS will award two more franchises next year. But the competition from cities that have been unable to put together a stadium plan in 2017 is expected to be stronger next year, with cities like Detroit, Phoenix and even a revived San Diego in the mix again.