Scoop: Major piece of Titans stadium financing plan emerges
State lawmakers are expected to soon consider legislation that would allow Nashville to increase its hotel-motel tax and use that newly generated revenue to help pay for a new Titans stadium, according to documents obtained by Axios.
- Nashville's hotel-motel tax is currently 6%, but state law allows the rate to go as high as 8%. This proposal would raise it to 7%.
Why it matters: If passed in the waning days of this legislative session, the measure would provide a substantial portion of the funding for a new enclosed Titans stadium.
Of note: The hospitality industry supports the proposed increase, according to Nashville Convention and Visitors Corp. CEO Butch Spyridon.
- "When we learned of the roof opportunity, we polled hotel members [of the CVC] and said, 'If we're going to do this, it's got to be visitor-funded,'" Spyridon tells Axios. "And the poll results came back unanimous."
- Spyridon says members are sold on the opportunity to use an indoor stadium to lure "mega events" like the Super Bowl, Final Four and College Football Playoff games, crucial because colder winter months are Nashville's only remaining tourism "soft spot."
Details: According to the bill's fiscal analysis, increasing the tax by 1% would generate about $10 million annually — the existing 6% tax created $60 million in the last pre-pandemic tax year.
- Spyridon says that estimate might be conservative. Based on the number of new hotel rooms, average rental rate and big events already on the books, he projects the increase would generate $17 million to $20 million annually.
By the numbers: Gov. Bill Lee proposed $500 million in state funds as part of his amended budget to help pay for an enclosed stadium.
- Last year, the legislature approved a bill to redirect a portion of sales tax generated around Nissan Stadium to help pay for stadium upgrades or a new facility.
- In a recent radio interview, Speaker of the House Cameron Sexton indicated Titans ownership will spend $700 million on a new stadium.
- Construction of a domed stadium is anticipated to cost in the neighborhood of $2 billion.
State of play: If the legislature approves the legislation, Metro Council would be empowered to increase the hotel-motel tax.
- The proposal stipulates that tax revenue generated from the increase must be used to pay debt service for construction of an enclosed roof stadium.
The big picture: Increasing the hotel-motel tax would mean tourists are helping pay for the stadium, not residents.
- Mayor John Cooper has been adamant that the stadium project should not burden the city's operating budget.
What's next: The legislation is scheduled to be considered in legislative committees beginning Wednesday.
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