Titans term sheet shows size of tax district, but not size of tax kickbacks or what happens if they fall short

Nashville Mayor John Cooper sent over his final term sheet for a new Tennessee Titans stadium to the Metro Council last Friday, though it took a few days before it became available for the great unwashed to read. It showed up by yesterday, however, and one of the items included is a document explaining how the city will pay for its share of $1.26 billion in public costs, which is this:

Public Finance 101. When you draw a circle around a stadium it equals free tax revenue. https://t.co/fcQ1m9H5bU

— J.C. Bradbury (@jc_bradbury) March 2, 2023

So the small purple blob looks to be the stadium, and the larger area described by another purple line is the “sales tax zone” that would have all sales tax revenues kicked back to a capital fund to pay for the stadium. That’s a total of 104.41 acres, encompassing the whole new development district that the Titans owners plan to build around the stadium.

We’ve already been over this before, but to recap:

Since this is money that otherwise go to the metro government and the state — sales taxes from fan spending at the current stadium goes to the public treasuries, obviously, and most of the spending at new stores around the stadium would just cannibalize spending at stores elsewhere in the city or state — it’s verbal prestidigitation bordering on outright lying to say that this is tax money that couldn’t otherwise be spent on other public needs.

How much money would be provided by sales tax kickbacks? The term sheet doesn’t appear to spell that out anywhere, which is what council stadium committee chair Bob Mendes was complaining about when he issued his questionnaire full of blank entries in December. Nor does it indicate what happens if sales tax receipts plus other stadium funds (hotel taxes, ticket taxes, plus for some reason a $4 million annual payment in lieu of taxes from the city water and sewer department) fall short of what’s needed to pay off the stadium costs, though since it’d be the public Sports Authority on the hook for construction debt, the answer would presumably be “find more money to give to the Sports Authority, maybe by selling a hospital or something.”

(There’s also a bit in the term sheet about a state-of-the-art clause, which was noted by The Center Square’s Jon Styf in an article yesterday. It’s a bit confusing, though, in that the Titans would be the ones responsible for maintaining the new stadium in “first-class” condition, but could presumably access the capital fund created by tax revenues to pay for upgrades, suggesting a kind of waterfall fund like the one the Atlanta Falcons are using to get more subsidies on top of their initial ones. I’ve already held up this post for long enough trying to figure out what it all means, so I’ll come back to it either after I’ve had more time to dig through the lease language or after Styf has beat me to it.)

There’s likely more to be found in the term sheet, but you won’t find it in the Nashville Business Journal, which instead spent its time interviewing Mayor Cooper about how he wants a new domed stadium in place to host a potential national political convention in 2028:

I know you sent a letter about bidding for political conventions in 2028. What else are you doing to try to fix [the relationship between Metro Nashville and the state]? I do spend a little bit of time [on it], as much as I can. Part of it is explaining Metro government. Let’s say you have a state-appointed Sports Authority. Well, the Sports Authority issues county debt. Sometimes it’s good just to point our basic governing challenges: You’re a state board, issuing county debt? The issuance of county debt has been of great benefit to the state, right? The state has made more money off of Bridgestone [Arena], I’m sure, than the city ever has because they get seven cents on every tourist dollar coming to the state. And so here you have the case of county debt really being a windfall for the state.

Like, what? The state gets more in hotel taxes than the city does, sure, but also people attending Predators games from elsewhere in Tennessee are a gain to the city, but not to the state, because that’s just shuffling around money from existing state taxpayers. This would not seem to be too difficult a concept to grasp, but then, Cooper has lots of incentives not to grasp it, as someone who’s staked his reputation on a $1.26 billion public expense to build a new NFL stadium that he claims will benefit taxpayers because reasons.

Though Cooper’s reputation may not matter all that much, given that in January he made the surprise announcement that he won’t be seeking re-election to a second term, again because reasons. This means he will likely be remembered mostly as the guy who blew into the mayor’s office, gave a billion dollars to Amy Adams Strunk for a new stadium, then rode off into the sunset. This is not what I personally would want at the top of my Wikipedia entry, but I guess it beats “got out-fundraised by his mayoral opponent but won the election anyway by spending $1.4 million out of his own pocket after helping run corporate mergers for Lehman Brothers, you remember them, the company that set off the Great Recession by helping to invent subprime mortgages.”