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.