Month: November 2017

Nashville General Hospital – Nov. 29 thoughts

Here are some things I think about Nashville General Hospital:

  • I don’t have any idea what is going to happen. It feels like options are narrowing, which is never good.
  • There are too many chefs in the kitchen. I’ve been trying to stay relatively quiet about the hospital because there are already a whole lot of people who are actively pushing various  ideas about how to “save” the hospital. Unfortunately, most of the efforts are uncoordinated and there is not a basic agreement about what “save” means.
  • I am not sure the right chef is in the kitchen, but I can’t tell. Information is too opaque to really tell who is leading, or moderating, or dictating how circumstances are unfolding. It feels like the Hospital Authority and the administration are headed toward a bad place. For you NASCAR folks, think Kyle Busch and Martin Truex at Indy this year.  See time marker 0:25 to 0:35 here.
  • Meharry has lots of leverage in whatever is going to play out here. There’s only 6 years left on the hospital building lease. Do they want to continue in the relationship after that? If so, on what terms? Metro also has lots of leverage because it has money.
  • The Hospital Authority’s request this week for $20mm is not a surprise. Ironically, this is first fiscal year in quite a while where the Hospital Authority accurately predicted its cash needs. They told us all back in May 2017 that they’d need an additional $20mm.
  • It is not just about numbers when we talk about this hospital. As Rep. Brenda Gilmore wrote in the Tennessean a few weeks ago: “For more than 125 years, Nashville General Hospital has provided care to Nashvillians, many of whom would have no other way to get medical attention.” I don’t have the voice or experiences to try to fully describe the implications of her statement. But I know she’s voicing an authentic concern that is as real as the money is.

I could add another dozen bullet points with my thoughts about things that have been announced publicly. But I don’t want to add to the “too many chefs” dynamic. That said, my number one wish this evening is that the Hospital Authority and the administration would find a way to be teammates. If they don’t, I’m concerned that we’re going to end up watching a fiery wreck.

Here, here, here, and here are my previous posts about the hospital over the last few years.

Following up on the community oversight bill on 1st reading…

At our Council meeting on November 7, legislation for a police community oversight board was introduced on first reading. With all the attention earlier this week on soccer, I wanted to do a quick follow-up on this.

I think there is a general consensus that a citizen’s board of some kind is possible in Nashville. In an email to Council members on November 8, the FOP told us: “The Fraternal Order of Police is not opposed to some manner of an advisory board that is compliant with current law.” At the NOAH event on October 29, 2017, the Mayor also said that she would support a community oversight board if it resulted from a discussion among all interested groups. The Mayor also reported that the administration is going ahead and hiring consultant Barry Friedman.

I believe that Mr. Friedman has referred to community oversight boards as “back end solutions” that are used after something bad or allegedly bad has happened. I understand that he prefers to focus on front end policy and training solutions created and adopted by an entire community. I understand that he also thinks that an oversight board can be appropriate at times in some cities.

I am not a sponsor of the current legislation. I had the opportunity to see a draft of the bill before it was filed. Among other things, I expressed concerns about making sure that police officer due process rights are protected appropriately. I shared that, in addition to protecting due process rights, any oversight legislation would have to legitimately respect the magnitude of the job officers do and the risks they take, and not presume bad acts by them. I also expressed concerns about whether enough community consensus-building has been done. I was glad to see that second reading was pushed off to January to allow time for discussion about this.

I am hopeful that Mr. Friedman’s work in Nashville will begin before the end of the year and that his community-led policy-making process involving all of Nashville’s interested government and private groups informs and guides what the Council does with the pending bill.

Soccer thoughts (11/6/2017 edition)

Here’s an update about where I am on my issues. Excuse typos — I’ve been trying to get this out quickly and still get some client work done today.

After Friday (see my thoughts from then), I had several open issues. I appreciate that the administration and team kept working with me through the weekend even when it has looked like they already have the votes to pass the resolution. Some of my last issues have been addressed, and some haven’t. After balancing everything, if the amendments I am offering are included, I am going to vote in favor. Here’s why…

Two important issues are being addressed in last minute amendments that I will introduce at this afternoon’s budget and finance committee meeting. One amendment will say specifically that the team guaranty will cover infrastructure overruns — this is a new clarification. The other amendment will clarify that, if there is ever a new lead investor and they don’t provide an adequate guaranty, it will be considered a breach of the lease.

On the issue of the 10 acres, the team issued a letter over the weekend setting out their vision for having sufficient affordable housing to allow people who work at the stadium to also live at the development. This is as much detail as we are going to get before voting on the financing package. And, regarding the idea of a guaranty from the current owners, that’s not going to happen. Any earlier reporting that the individual owners would provide a guaranty is not accurate. That’s not going to change before we vote.

Here is a quick bullet point summary of changes that I requested that have been made, and those that haven’t been made:

Changes achieved:

  • 10 acres issue: We didn’t know the location of the 10 acres. Now we do.  Also, in its letter, the team described its intention to have housing that is affordable for people who work at the stadium. I intend to do my best to hold them to fulfilling that vision as rezoning and entitlements come back before the Council.
  • Guaranty: The guaranty language has added new specific requirements. The guaranty now specifically requires the $25 million team cash contribution, covering stadium overruns, covering infrastructure overruns. Metro’s cost on the stadium now has a hard cap of $225 million. Having the guaranty cover infrastructure overruns is a late change that will happen in an amendment at my request. This was an important issue to me.
  • Guaranty (future change in lead investor): It will be an event of default under the lease if a future successor lead investor does not provide an appropriate guaranty. This is a very good change.
  • Clarification that the team lease will require rent sufficient to cover not just regular bond payments, but also costs related to issuing the bonds.
  • Clarification that Metro’s obligation to contribute a minimum amount of sales tax toward the bond debt expires after 10 years.
  • Added a definition of what is a “capital expense” under the lease.
  • Added a requirement that there be a fair schedule conflict resolution process in the event of a conflict between a soccer game and another event.
  • Added a requirement that the Council approve building demolition before the bonds are issued.
  • Added a requirement that the Fairgrounds Board approve building demolition before the bonds are issued.
  • Added a requirement that the Fairgrounds Board approve all infrastructure changes, including roads and sidewalks, before the bonds are issued.
  • Clarify that the Mayor may only approve technical changes after the Council has approved if the changes are substantively consistent with the approved legislation.
  • Clarify that adding concerts at the stadium would not impact the Bridgestone Arena’s finances.
  • Provided a parking plan.

Not achieved:

  • 10 acres issue: We have not seen a realistic value of what the 10 acres is worth to the team.
  • Guaranty (current lead investor): There is no formal or informal guaranty. I think the administration would concede that, if MLS fails as a league, Metro is left exposed for the remaining bond costs. Supporters would say several things. They would point out that soccer is super-popular and some other league would take MLS’s place. They would point to the growing popularity of professional women’s soccer and suggest that we will likely end up with a team from that league to help offset costs. But in the end, Metro is exposed if MLS fails.
  • What are terms of other important documents: We have not seen the lease from the Fairgrounds Board to the Sports Authority, or the lease from the Sports Authority to the team. We just have the key financial terms known at this time.
  • No traffic study has been provided. Discussions about sound mitigation in the neighborhood have not happened yet.
  • To me, there are questions about whether the state fair will be permanently displaced by soccer coming to the Fairgrounds. Supporters would say that the Fairgrounds Executive Director says we’ll still be able to accommodate the fair. Supporters are also quick to note that the fair might leave anyway no matter what we do.

At this point, while it’s not perfect, fairly extensive and important changes have been made to improve this deal for taxpayers. If my amendments to get these last few improvements to the guaranty language for taxpayers are passed, I will vote yes.

Soccer thoughts (11/3/2017 edition)

Yesterday evening, the administration sent the Council a Substitute Resolution for the soccer stadium. See here. After digesting where the parties ended up, I don’t think I can vote for it.

I do appreciate that many of my requested changes were made. Unfortunately, the legislation was not improved enough for me to be able to support it. The primary problems continue to be the guaranty language and the 10 acres for private development.

Let’s start with the guaranty language. On October 2, we were told: “The MLS ownership group will be responsible for lease payments…” In the original resolution, it said that “Team owners” would guaranty the lease payments. To me, there was a red flag raised by the fine print in the Intergovernmental Agreement attached to the resolution because it spoke only of a single “Team Guaranty” that has not been provided to us. This suggested to me that no individual owners would be guarantying anything.

Many of my colleagues wanted more details about the identity of the “ownership group” or “owners” that would be responsible if the team or league were to stumble in making payments. With the Substitute Resolution, we know the answer — nobody. There are no individual owner guaranties.

The Substitute Resolution calls for the legal entity that owns the team to provide a guaranty of the lease. If the lead investor for the team ever changes in the future, then Metro would have the right to ask for a guaranty from the new lead investor. But even with this, the legislation does not provide any enforcement mechanism to force a new lead investor to provide a guaranty. From my perspective, this means the guaranty only protects Metro if everything goes well (and therefore we don’t actually need it) and doesn’t protect Metro if things take a bad turn (and we do need the guaranty).

In addition to this issue, the guaranty language in the Substitute Resolution does not cover overruns on the stadium-related infrastructure. I asked to have language added that would protect Metro for infrastructure overruns, but that wasn’t included in the Substitute. Considering that the majority of the overruns for the Sounds stadium were for the related infrastructure, having Metro get a hard cap on these costs was important to me.

About the private development side of this, having the 10 acres in the deal has not been adequately justified. There are not enough details about the proposed affordable housing onsite. There are not enough details about what the land is worth to the team. The Council was provided with the value of comparable nearby vacant land with no soccer stadium on the site. But that wasn’t a helpful data point for me. In the end, if we don’t know what the land is worth to the team, and we don’t know what Metro is getting from the 10 acres, I don’t think I can support this part of the proposal.

Finally, many of you read my initial thoughts a few weeks ago. I have updated that memo with comments to show whether each particular issue was addressed, partially addressed, or not addressed. Here’s that updated memo.

I continue to support the idea of soccer coming to Nashville. Hopefully, it will be with a better financial plan than what has been presented. It doesn’t seem likely, but perhaps there will be more changes or more information between now and when we vote next week.