Remember last Thursday, when it looked like the state of Tennessee and city of Nashville were going to combine to spend $846 million in public money on a new Titans stadium? Well, scratch that, because the projected taxpayer cost just soared past $1.2 billion:
- The state is still looking at putting in $500 million in stadium construction bonds, though given the way bondholders have this silly preference for earning interest, it’ll actually cost $710 million over 20 years to pay off the bonds. According to state finance department documents obtained by The Tennessean, this will be kicked back to the stadium project from taxes on construction ($85 million), sales taxes on events at the stadium ($236 million), taxes on construction of a new “campus neighborhood” around the stadium ($182 million), and sales taxes from the campus neighborhood ($415 million, and yes that adds up to more than $710 million, the Tennessean didn’t include the actual documents, all we have is what they’re reporting*). All these tax revenues are money that for a normal construction project would flow into the state treasury; according to noted economist Felix Unger, however, any money a team owner touches even once becomes their money, so Gov. Bill Lee is counting this as a windfall, and certainly not the sort of thing developers should be expected to pay like everyone else in order to support all the state services that they get rather than dumping those costs on other taxpayers.
- Just days after a state bill was introduced to allow the Nashville Metro government to raise about $346 million in hotel-motel taxes to throw at stadium construction, The Tennessean cites House Speaker Cameron Sexton as saying the actual total estimated city cost is $700 million. “Metro officials have not yet released projections on its portion or how it would finance it,” reports the paper.
So that’s $1.2 billion, which would instantly blow past New York state’s record $1 billion subsidy for a Buffalo Bills stadium. But wait, there’s more!
Meanwhile, the Titans are projecting new development of a neighborhood surrounding the stadium could cost $4 billion in a series of public-private investments, according to the documents.
Public-private what now? It’s not clear where additional public money would come from to pay for the new surrounding neighborhood, given that construction and sales taxes from there would already be committed toward paying off the stadium — though I suppose there’s always property-tax kickbacks, or straight-up cash grants. The Tennessean didn’t provide any details on what the public price tag would be for this piece of the financing puzzle; it also didn’t indicate who would be on the hook for any of this money if tax receipts fell short, which is a thing that can happen.
Finally, no self-respecting plan to spend more than a billion dollars in taxpayer money would be complete without a rendering, and we do have one of those:
I mean, it’s sort of a rendering. It’s missing a few things, like the sky and any surrounding landscape and any color or details for the surrounding buildings and anything about the stadium other than that it will apparently feature a flat fabric roof. Somebody did some nice cut-and-paste work with the Tree tool, though, even including a few that seem to be flowering while others have their leaves turning yellow, as traditionally happens during the Tennessee season of sprautumn. The stadium also seems to have some sort of grassy deck floating in midair with a large square cutout that allows sunlight to pass through to the ground beneath and also allows fans to fall to their deaths — oh great, now everyone will want one.
*UPDATE: A reader sent along the state finance department data that the Tennessean referenced, and it turns out the tax kickbacks are estimated to be enough to pay off the $710 million in state bonds plus interest, while leaving $207 million over 30 years for the state to keep — or as the document puts it, “net new benefit,” which ignores all the lost taxes from the Titans not playing and selling things at their old stadium, but anyway. Also, that “public-private investment” business for the surrounding development is nowhere to be found, it must be from some other document, or the Tennessean reporter’s imagination, one of those.
$1.2Bn for a giant coffee table. Sure, it’s a nice coffee table, but still…
Tough to defend this one. I guess one positive is that all that tax money won’t be going towards actively harmful things like administrative bloat in public education or rail projects that disrupt traffic flows.
This is Tennessee, where the state legislature wants pharmacies to give Ivermectin to humans because it’s a miracle cure for Covid-19.
You still have pharmacies? I thought they’d all been converted into “pain management clinics” by drug dealers masquerading as philanthropists?
Does anyone go for just the game anymore? Is it really no longer possible to build a stadium or ballpark for under a billion dollars? Shea Stadium in todays dollars would cost about $260 million. Lets double it to $520 million since those fancy scoreboards, ribbon boards, some nice clubs, and good concessions which did not exist then. You can probably reduce it from 55,000 to 45,000 seats which would offset some of the cost. It really can’t be done? I know, 10 high-end spenders are better than 1000 average fans.
“…10 high-end spenders are better than 1000 average fans….”
Only if someone else (IE: the taxpayer) is funding the amenities that draw in the ten high spenders.
I was going to post this on another thread in which complaints were being made about the spartan and down market nature of certain bay area sports facilities… but it works here too.
Whenever you see franchise owners spending (only or mainly) their own money for facilities, the venues are much more modest in amenities. After all, most business owners know that they should only spend money on things will earn them that capital outlay back (and more).
So, where college or professional sports are concerned, owners who are not spending someone else’s money follow the traditional business rule around wasteful spending.
It’s only when the taxpayers start funding these boondoggles that we see idiotic levels of finish (like Pittsburgh arena’s famous 300 UHD TVs in areas no-one even goes to). When private money is used, owners also don’t seem keen on building an extra ten thousand seat that will only be sold for playoff games etc. It’s the very definition of dead money.
But hey, if someone else is paying… why not clad the bathrooms in gold leaf? Why not – as the Braves have done – come up with a $150 BURGER for sale at your concessions?
I mean, literally why not?
Who among us would drive a Chevy if we could drive a Bentley and put the operating, maintenance and financing costs onto the tax paying public?
Even the people that can afford the $400-500 seats in some of these palaces can do so happily, knowing that low and middle income earners who can’t even afford the nosebleed seats once a season are subsidizing their entertainment.
Well put. And as Ben Miller (whose is more enthusiastic about this stuff than most posters here) said, “tough to defend this one”.
Looks like the Titans are moving into a copy of Chicago’s McCormick Place Lakeside Center.
“public-private” in nashville parlance has meant in the recent past that the metro government will capitalize the project and then the ownership will “repay” a portion of the bond debt. that’s how the nashville sc stadium (nee: geodis park) was financed. so much more convenient than the billionaire ownership paying bank interest and hey metro is on the hook for the balance, but this is how they get away with claiming that the transaction privately funded.