A Nashville MLS stadium bond sale moved forward Thursday, when the Nashville Sports Authority voted to finalize the sale of $225 million in revenue bonds.
Slated to open in 2021 for a Nashville MLS expansion club, the stadium will be constructed at The Faigrounds Nashville as part of a project that includes an adjacent 10-acre mixed-use development. The funding model for the $275-million project calls for the issuance of $225 million in revenue bonds for stadium construction, along with $50 million in general obligation bonds for infrastructure improvements and new fairgrounds buildings.
The sale of revenue bonds moved forward with the authority’s vote on Thursday, with the bonds to hit the market early next month. As part of the mechanism for paying down the debt, the Nashville MLS group–led by John Ingram–will pay $9 million annually in rent, with sales and ticket tax revenue from the stadium to cover the rest of the debt. More from the Tennessean:
Two separate votes, both unanimous, cleared the way for the bonds to go on the market Feb. 5 and for Metro to begin collecting proceeds Feb. 15.
The board’s action, which included signing off on an agreement between the city and bond underwriters, came one day after Metro presented the city’s financing plan to two bond rating agencies, Standard & Poor’s and Moody’s.
Metro will accrue debt service of around $15.2 million ever year through 2051 when combining interest under the financing plan. The bond sale adds up to total debt service of $424 million through that same period….
The Ingram-led ownership group will pay the city $9 million annually to help retire a portion of debt, with revenue collected from sales tax at the stadium and a user ticket tax designed to pay for the remaining debt obligation. The city’s non-tax revenue from the Metro general fund would cover the rest if these revenue stream fall short.
Although there is a legal challenge in place to stop the stadium’s construction, work on the venue is currently scheduled to begin this fall–after Fairgrounds facilities that occupy the stadium site are replaced with a new expo hall. Nashville’s expansion club will begin play in 2020, meaning that it will spend at least one season at an alternate venue before the new stadium opens.
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