A bad deal

The prospect of a new $2.1 billion domed stadium for the Titans finally dropped from the ether to the table last week when Nashville Mayor John Cooper unveiled financial particulars that will go before the Metro Council for its approval. Cooper’s sales pitch — now being endlessly recycled on every media platform that will give him the time of day — invites us to perceive it as both advisable and inevitable. Earth to Planet Nashville: It is neither, and the council should tell the mayor to try again. 

Before going further, a few quick disclaimers. I like football, I like the Titans, and I follow it even as I recognize that gridiron fandom is an ethically complicated pursuit. I opposed the 1996 referendum on financing the current stadium because it felt like a bad deal that would crowd out other priorities (it was and it did), though I’m not sorry we have pro football. Paradox? Guilty as charged.

Anyone who pays even minimal attention to the economics of cities and sports knows of the longstanding and substantial pile of research pulling the curtain back on the myth of beneficial public subsidies for pro stadiums, so I won’t deep-dive it here. Economists may not agree on much, but they concur to a remarkable extent that publicly financed stadiums are lousy investments. The evidence against public benefits from spending on these behemoths as imagined engines of employment, income, or tax revenue growth is robust.

Knowing that a public-money-for-public-benefit dog won’t hunt, the Cooper administration and its tourism-obsessed accomplices are framing it instead as an intractable legal and fiscal dilemma to which there is only one solution. In their telling, Nashville is trapped in a lease that puts taxpayers on the hook for costly updates to an existing stadium in disrepair, and building a new one is the only way out. And so we have in front of us a plan for a $2+ billion dollar indoor stadium, with 60% of the cost coming from public financing — the largest subsidy ever in dollar terms (though not in percentage terms) for an NFL team.

The administration’s argument for the deal has two main thrusts. The first is that doing it is better than not doing it, since not doing it means (by their dubiously impartial calculations) perhaps $1.75 billion or more in Nissan Stadium upkeep over the next 17 years of the existing lease. Cooper says renovating “proved to be financially irresponsible,” but given how quickly that upkeep and reno estimate has ballooned as new-stadium chatter took hold over the past year, a more facially unbiased analysis is worth the wait.

The second thrust is that all this money can be spent only on this, and not on anything else. Quoting from the press release announcing the deal: “This new stadium proposal protects Metro taxpayers by not spending a single dollar that could be spent elsewhere on our core priorities like education and public safety.” This is an insultingly dumb argument. It is true that the state’s $500 million bond offering can be spent only on a domed stadium because the state legislature approved a $500 million bond offering only for a domed stadium (a move that forces on Nashville a costly dome, which as the estimable Joe Rexrode at The Athletic persuasively observes, is idiotic and unnecessary). It is also true that the planned increase in the city’s hotel/motel tax can only be used to finance a stadium because the pinheads in the state legislature authorized such an increase only for the purpose of financing a stadium. And obviously the team’s $840 million contribution will fund only a stadium because, well, the team is only going to fund a stadium.

Forgive the simplistic analogy, but if the legislature approved funds that can only be used by the city to dump toxic chemicals into the Cumberland, would we do it because there’s not “a single dollar that could be spent elsewhere”? If the legislature is offering to finance a bad idea, a better leader would do more to work the legislature rather than throw up his hands and tell city residents he has no choice but to spend the money on a boondoggle. This “not spending a single dollar that could be spent elsewhere” canard is also calculated to assume that the public is too stupid to grasp the simple concept of opportunity costs. If we actually do manage to create a more economically vibrant East Bank, the tax dollars it generates can indeed be used for any number of purposes—unless of course you lock us into an ill-advised taxing zone that ensures we can’t.

Way back in 1996, four days before the referendum that sealed the original stadium deal bringing us the Titans, the New York Times ran a front-page story headlined “Can Nashville Say No to NFL Team? Maybe.” For those of us who find ourselves frequently telling out-of-towners and new arrivals how much Nashville has changed in the last couple of decades, the Times piece is a striking rebuff. 

Positioning the 1996 vote against a backdrop of “underlying sentiment that Nashville is growing too quickly,” the Times piece described stadium skeptics as alarmed about “misplaced priorities” in a city where traffic and infrastructure and school construction are failing to keep pace with growth. Does that sound just a wee bit familiar? Then-mayor Phil Bredesen told the Times that the vote put those “who just like the way Nashville was…a somewhat isolated, genteel Southern city” up against those who “want to be more like Jacksonville and Charlotte and Indianapolis and some of those kinds of frontline, growing cities.” The good news a quarter century later is now we are just like them—second-rate cities with NFL teams, lousy transit, high levels of poverty, and plenty of violent crime. 

Building the stadium to house the Titans, Bredesen told the Times in 1996, would spur development of the Cumberland’s east bank (now known capitalizationally as the East Bank). Yeah that prediction wore well. The 2022 version again pitches East Bank Valhalla, this time with a glossy bible full of urban planning visionbabble and an assortment of pretty drawings. Once again we are asked to consume the delusion that an immense temple of steel and concrete served primarily by internal combustion vehicles that have to park somewhere nearby, and that sits unused most days, will spawn something that approaches anyone’s notion of “community” or “neighborhood.” The fact that the proposed deal’s economics depend significantly on tax dollars thrown off by as-yet-nonexistent commerce surrounding the stadium (on what they misleadingly call a “campus”) tells us all we need to know about the kind of commerce that will likely surround the stadium. Nashville already has a tiresome theme park downtown; do we really need another?

The mayor and his team will be telling Metro Council members that they have no alternative to approving this, but in fact they do. In 1995 a no vote on the stadium would have sent the Houston Oilers off to be named something else in some other city willing to build them a castle at taxpayer expense. This time they aren’t going anywhere, and with a team valuation north of three and a quarter billion dollars (up almost by half in just the last two years) they can afford to finance the full freight. 

Saying no to this deal will send the mayor and the Titans back to the negotiating table for a do-over, and that’s a good thing. Keeping and improving Nissan Stadium (it is a feature not a bug that it is closer to pedestrian downtown than to the interstate) should be given much more thought. If we have a bad lease that has taxpayers excessively on the hook, tear it up and write a new one that spiffs up Nissan big time and puts the Titans on the hook for it. If there must be a new building, insist that the Titans find private investors to pay for the building, as the Chicago Bear’s owners intend with their proposed Arlington Heights stadium. And lose the damn roof; tell the governor we’ll take money on our terms, not theirs.

The architects of this loopy deal are resting their case on assumptions that we have a crappy lease with the Titans and a building in disrepair. One can buy those assumptions and yet not see the necessary result as a publicly financed overpriced replacement that will consume massive civic energy and fiscal capacity while doing essentially nothing to improve the everyday lives of Nashvillians or livability of the city. Cooper wants you to believe the problem is structural and legal, and hence solved with a new building and a new lease, when in truth it’s a problem of leadership and imagination.