by Steven Hale
Playing catch-up on the new Nashville Sounds stadium? Here's primer on the situation. It's not everything, but we think it'll get you started.
Hold on. Since when are the Sounds getting a new stadium?
The franchise has been angling for a new stadium for years. In 2007, under then-Mayor Bill Purcell a deal was in place that would have put a new stadium on the riverfront. That deal fell through.
In 2011, a study by Populous Inc. — a national stadium architecture firm — identified three potential sites for a new baseball stadium: Sulphur Dell (the original home of baseball in the city, in the heart of North Nashville's Germantown and Salemtown neighborhoods), the east bank, and the North Gulch.
After discussions about a new stadium between the city and the team appeared to have stalled, The Tennessean broke the news in August that Mayor Karl Dean's administration that a stadium project at Sulphur Dell was in the works. Two days later, the mayor confirmed that report at a press conference, although details about the project remained scarce. More details, including renderings of the stadium and plans for its design, emerged at an Oct. 25 community meeting.
On Nov. 8, that the mayor's office announced a deal had been reached the state, the Sounds and a private developer to allow the project to move forward. And on Nov. 11, the administration revealed the financing plan for the ballpark.
The Metro Council advanced plan on first reading on Nov. 20 and will consider it for the second time this evening (with plans to give it a third and final vote on Dec. 10). So here we are.
Ok, back up. Why do the Sounds need a new stadium?
Their current home, Greer Stadium, was built in 1978 and stands as one of the oldest minor league baseball stadiums in the country. There seems to be widespread agreement that the place is a dump.
I don't really go to many Sounds games. Are they any good?
Eh. In 2013 they were 57-87. Although, in the history of the franchise, they have a winning record. In any case, that's not really what minor league baseball is all about, right?
Fair enough. But does anyone go to Sounds games?
Some people do! According to the team's 2013 review, 355,003 fans attended 70 home games at Greer this year, an average of 5,071 people per game in the 10,300 seat stadium. The Sounds say it was their best seasonal attendance in six years.
Fine. So what about this financing plan? Who's paying for this new ballpark or stadium and...actually, is it a ballpark or a stadium? What's the difference?
Well, the Dean administration and the project's architects have emphasized their belief that this project will fit into the North Nashville community, and be a true neighborhood ballpark. They insist on calling it a ballpark for this reason and also (we assume) because "ballpark" sounds much friendlier than "stadium."
So what will this "ballpark" be like?
Some renderings from the architects are here. The ballpark would sit on Jackson Street between Third and Fifth avenues. It will have fixed seating for 8,500 people, with room for about 1,500 more in open areas like grass berms. The playing field will be 12-14 feet below street level. The stadium will be positioned so that it features a view of downtown. Interestingly, though, that means it will be aligned in a distinctly non-traditional way.
OK, so who's paying for this thing and how are they doing it?
The project, as proposed, will be birthed by the much heralded public-private partnership. Metro (that is, the public part) will issue $65 million in bonds to make the ballpark happen on the front end — $23 million to buy the land from the state and $37 million to build the stadium, plus $5 million in capitalized interest during construction.
At the same time the stadium is being built, the Sounds say they will build a $50-$60 million residential and retail development nearby, along Third Avenue. They are not contractually obligated to do so, but they say they plan to follow through.
Embrey Development, who had been moving forward with plans for a multi-family residential development on the land that will now be left field, has agreed to move their development to accommodate the Sounds new home. They are now planning to build a $37 million development in between Third and Fourth avenues and Jefferson and Jackson streets.
The administration's plan for paying off the $65 million in debt — $4.3 million a year for 30 years — is as follows:
The Sounds will make an annual lease payment of $700,000 during the 30-year term of the lease (2015 through 2045)
Under state law, a municipality can capture the increase in local-option sales taxes and any state sales tax generated on-site, which Riebeling estimated at $650,000 annually
The city will receive $750,000 in annual property tax from the Sounds development
Embrey's development is expected to generate $675,000
An existing MDHA tax-increment financing plan for the area — which is already in place, but will need to be extended — will generate $520,000.
In addition, an annual $250,000 payment to the Sounds for Greer Stadium maintenance will be eliminated and the city will no longer pay the state $410,000 annually for a lease at the former Tennessee Prepatory School property, which is now the campus of the Nashville School of the Arts.
Metro will also kick in $345,000 annually. To be clear, neither the Sounds nor Embrey are obligated to go through with their planned developments. Analysis of the deal by Metro Council attorney Jon Cooper identified that as "the basic risk associated with the proposal." If neither of those development are built (and thus, their property tax revenue is not generated), according to Cooper's analysis, Metro's annual cost would increase by more than $1.4 million. Few doubt that Embrey intends to follow through on their development, since they had been in the process of doing so before the stadium proposal even emerged. The administration and the Sounds say the same goes for their plans, and administration officials have insisted that if the Sounds don't build there, someone will.
To be clear: The deal is not revenue neutral for Nashville. The city will be paying at least $345K per year for the privilege of building a stadium for the Sounds.
So why don't the Sounds just build their own stadium?
We had the same question! So we asked Metro's Finance Director Rich Riebeling. Here's what he said:
"As you look around the country I believe that most projects of this nature are done in some form of public-private partnership," he writes. "We’ve approached this issue that way and will go forward only if we think it is in the best economic interests of the City. We believe this project is beneficial as it connects the Germantown area to Downtown while providing economic redevelopment along one of Nashville’s historic corridors, Jefferson Street."
Do minor league baseball stadiums provide the kind of economic boon we're always hearing about? It's up for debate. A 2008 study, published in the Rutgers Journal of Law and Urban Policy, argued there is "little or no positive correlation between stadium construction and local economic development."
Nevertheless, Riebeling is correct that most, if not all, stadium projects are built with large amounts of public money. However
If the council approves the plan on Dec. 10, it will be less than a month since the full proposal was released. What's the rush?
The mayor himself was asked that very question when the plan was unveiled. Here's what he said:
"Yes. There's really three reasons. One would be that it's important for us to move forward while interest rates are low. We don't want to delay and have the opportunity for interest rates to go back up. We also have one of the private parties involved needs to get this deal completed by the end of the year. This is a private party, Embrey, who had been involved in this project of building over there before we just moved forward with the ballpark project. And it's important for us to move forward because we'd like to get the stadium open for the Sounds season in 2015."
One other reason? Sounds owner Frank Ward has a $5 million option on the land where that residential and retail development would go as long as he pulls the trigger before Dec. 31. If the deal isn't approved before then, he says he won't exercise the option. If the administration's claims about the appeal of the property are accurate, that could mean he loses the land.
Ward says he wants to "stay out of the politics." But then, there is this from the team, which is actively encouraging supporters to attend tonight's public hearing at the council.
So, is the council going to approve this thing?
If we were betting — and we're not — we'd go with yes. It will take 27 votes to alter the capital improvements budget to make room for the ballpark, but the plan would seem to have enough support on the council. There are those calling for the process to slow down, though. Before last month's initial vote on the plan, At-Large Councilman Charlie Tygard attempted to defer the stadium bills for two meetings, but was defeated. Since then, he has propose an amendment that would obligate the Sounds to pay Metro $750,000 for each year that a $50 million mixed-use development next to the ballpark is not constructed. That amendment will get a vote at tonight's meeting. It stirred debate at committee meetings Monday night, with one council member calling it a "no-brainer", while another labeled it a "poison pill."
Tonight's meeting will include a public hearing on the ordinance amending the MDHA redevelopment district to extend the term and increase the amount of the tax increment financing cap. Both are necessary to proceed with the financing of the ballpark.