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:
- 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.
- 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.