MLS To Nashville: What's Next?

NASHVILLE, TN — Nashville's prospects for securing a Major League Soccer expansion franchise got a serious jolt Tuesday, as the Metro Council overwhelmingly approved a crucial piece of the financing plan for a proposed stadium at the Fairgrounds Nashville.

Despite some vociferous opposition in the days leading up to the vote and in committee meetings, the council voted 31-6 to approve the issuance of $225 million in revenue bonds as part of a $275 million package for the 27,500-seat stadium. Councilmembers Jon Cooper, Steve Glover, Larry Hagar, Holly Huezo, Mina Johnson and Dave Rosenberg voted no. Ed Kindall and Mike Freeman abstained, while Robert Swope was absent.

Though it garnered most of the criticism, included in the final package was a deal to give 10 acres to the team's owners — which include John Ingram, scion of one of the city's richest families, and the Turner family, founders of Dollar General and development giants MarketStreet Enterprises, along with the Wilf family, which owns the NFL's Minnesota Vikings — for a mixed-use development, which they say will include retail, hotel, affordable and market-rate housing. A number of councilmembers and fairgrounds supporters opposed the giveaway, but ultimately, those concerns were not enough to torpedo the deal. An amendment offered by Councilmember Jeremy Elrod to remove the 10 acres from the package was tabled without a vote.

Under the plan, Metro will issues the $225 million in 30-year bonds with the ownership group kicking in $25 million on the front end. The debt service on those bonds will total about $13 million annually, paid off through a combination of private investment, lease payments and taxes from revenues generated at the stadium, included sales taxes generated at the stadium site, along with a $1.75 ticket tax. In addition, if the combination of sales and ticket taxes are below $4 million in the first five years of operation or below $3 million in years six through 10, Metro itself will service the debt through "non-tax revenue."

During Monday's Budget and Finance Committee, Metro Chief Operating Officer Rich Riebeling conceded that the city anticipates having to cover $1.5 million in the first few years of the deal.

Tuesday's vote certainly bolsters Nashville's chances of being awarded a franchise when the MLS Board of Governors selects two teams to join the league for the 2020 season. That announcement is expected in December. Nashville and Sacramento, Cali., are widely seen as front-runners for those teams, particularly after the vote Tuesday. Two other expansion franchises will be announced some time in 2018 to begin play in 2021.

With the vote, Barry secured a victory for one of her two prestige projects; the other being her multi-billion-dollar transit plan.

"The Metro Council should be applauded for joining the majority of Nashvillians who say yes to Major League Soccer in Nashville," Barry said in a statement. "Their vote tonight puts Nashville in a very strong position to be awarded a franchise later this year by MLS. Thank you to John Ingram and the MLS to Nashville committee who have worked tirelessly over the last year to make this night possible for soccer supporters all over the Nashville area."

Ingram declared Tuesday "a great night for Nashville."

"It’s been a long road as we started this process almost a year ago and so many Nashvillians have been a part of making it happen From Mayor Barry’s leadership, to soccer fans and parents from all parts of our city, and now tonight with our Metro Council, the vision to bring Major League Soccer to our city moves one step closer. Of course the final decision on the team won’t be ours, but tonight Nashville checked off the final item that MLS needed to see. I’m always proud of this city, and tonight we’ve shown — once again — how we all come together around something important to make Nashville the best it can be," he said in a statement.

If Nashville is awarded the expansion team — as seems almost inevitable now — there are some more formalities. The fair board will have to approve leasing the Fairgrounds land to the Sports Authority, which will also have to approve the bond issuance. The council will have to sign-off on the infrastructure bonds — $50 million for various improvements on the site — and will have to vote to demolish certain buildings and facilities at the fairgrounds. An amendment to the Metro Charter approved by voters in 2011 — one of the biggest political defeats for Barry's predecessor Karl Dean — requires a two-thirds vote by the council for certain changes at the fairgrounds.

The council will also have to vote to rezone the property to allow for the mixed-use development and, at some point, actually approve the lease agreement.

Image via HOK/Nashville Soccer Club Holdings