Mendes questions whether stadium deal will cover long-term costs
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One week after Mayor John Cooper and the Titans unveiled their agreement to build a new domed stadium, pushback has centered around its unknown costs.
Why it matters: Although the initial price tag of the proposed stadium is $2.1 billion, critics say long-term repairs and upgrades will drive that final dollar figure up.
Details: The same revenue streams earmarked to repay the debt for stadium construction will also be dedicated to future capital expenses for decades to come. But the term sheet that Metro Council members will vote on doesn't list a dollar amount for those expenses.
- Metro Councilmember Bob Mendes, who has emerged as the project's chief skeptic, says he has a problem with not knowing the future capital costs. Mendes chairs the council's stadium and East Bank Stadium Committee, which is vetting the deal.
Be smart: The city has dedicated three revenue streams to pay for $760 million of the stadium project: a 1% tax on hotel room rentals in Davidson County, sales tax collected within the new stadium and sales tax collected from the surrounding 130-acre campus, which will be redeveloped.
- In a series of tweets, Mendes hand-drew a flow chart on a whiteboard to detail where the tax collections will go after the city meets its initial wave of debt obligations.
- The term sheet calls for the creation of a capital expense fund with a final cost still to be negotiated, plus an additional 20% in reserves. The Titans would be responsible for capital costs the tax revenue can't cover.
Also: Mendes says he wants to know the cost of infrastructure for the broader East Bank redevelopment plan and how much tax revenue earmarked for the stadium can also be used to defray those expenses.
- The city's most recent capital improvement budget commits $700 million to East Bank redevelopment, but Mendes said he worries the actual cost will be higher.
What he's saying: "[W]e need more information about the two large unknown amounts before we could decide whether the new stadium is actually a better deal," Mendes said in a tweet.
The other side: Cooper says the stadium plan is good for taxpayers because the city's current lease for the Titans at Nissan Stadium has become an albatross. A consultant estimates it would cost Metro at least $1.75 billion to meet existing lease obligations through 2039. Those expenses would come out of the general fund.
- Cooper says the financing plan is a better deal because money from tourists, stadium users and people spending money at the surrounding campus will pay for the new stadium instead of the general fund.
Up next: The East Bank Stadium Committee meets Wednesday at 4:30pm to hear a presentation about the term sheet from the mayor's office.