The board running The Fairgrounds Nashville is seeking to reopen the financial deal for the proposed new Nashville MLS stadium, saying they want to see changes to the $200,000 base rent paid annually by team owners for a 10-acre site slated for development.
The current proposal, which came after months of negotiations, calls for the team to pay The Fairgrounds $200,000 annually for 30 years for 10 acres of land. But members of the Metro Board of Fair Commissioners say they want to revisit that agreement and add an elevator clause to the lease, with payments going up after 10 years. The lease is not for the stadium, but rather for a 10-acre piece of land planned for development next to the stadium. This development will include a hotel, retail, and entertainment venues.
The $200,000 is actually a base payment. The lease also calls for the MLS team to split parking revenues with the Fairgrounds, with that revenue offsetting the $200,000. If parking revenues exceed the $200,000, then the Fairgrounds would receive the higher amount.
It is awfully late in the process to be making changes on basic things like lease rates and parking splits; Metro has already approved a financing plan for the stadium, and to date the Fairgrounds board has not brought up changes to the lease. But there are plenty of folks in Nashville seeking to tweak the deal to their benefit, so expect plenty of other proposed changes before a final vote on the lease and the stadium plan on Sept. 4. From The Tennessean:
Over the next 48 hours, attorneys from Metro and Nashville’s MLS expansion club are expected to revisit the lease structure. But Mary Cavarra, chief financial officer for Ingram Industries, pushed back at Tuesday’s fair board meeting, saying the team and city have “come a long way” to arrive at the current deal on the table.
She said that “$200,000 was quite higher than what we expected the lease to be,” adding that the team “felt we had made significant movement” by including a new clause to share parking revenue from non-soccer events.
She noted that the property tax revenue from the private development — which is to be developed by MarketStreet Enterprises, a minority owner of the team — would be earmarked specifically for the fairgrounds. She called it an “ongoing, recurring resource” for the fairgrounds.
“Right now, we feel that we’ve come a long way,” Cavarra said. “In terms of an escalator, with that just coming to me today, we have to look at that and see what can be possible.”
The topic of an escalator clause and other potential changes to the lease is expected to be discussed at a Fairgrounds board meeting today.
Last November, the Metro Council approved $225 million in bonding for a new MLS stadium at The Fairgrounds Nashville. That was a major accomplishment for the Nashville MLS expansion bid, and ultimately played a part in the league’s approval of Nashville’s pitch in December. However, the issuing of those bonds is contingent upon the completion of several stadium-related agreements that still need to be finalized. Briley’s administration has filed those four pieces of legislation with the council–including the lease for the development, the demolition of existing buildings on the stadium site along with the implementation of a $1.75 ticket tax, rezoning for the development, and $50 million in general obligation bonds for related expenses such as infrastructure improvements and new fairgrounds buildings.
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