A view of part of downtown Nashville, Tennessee, including the East Bank district and Nissan ... [+]
The Tennessee Titans and Nashville Mayor John Cooper recently reached an agreement to build a $2.1-billion domed stadium that would host home games for the NFL franchise and other major events. Advocates and opponents are trying to sway the debate about whether the economics of the new venue make sense for the future of the city. But they may yet discover that the deciding factor won't be about economic development—it will be about social impact and community benefits.
Why are the Titans and the mayor charging toward a new stadium?
Nissan Stadium, a multipurpose, open-air venue in downtown Nashville has been the team's home field since opening in 1999. According to the lease agreement, which runs until 2039, the city is obligated to ensure that the stadium is of “first-class” standard. The mayor's office estimates it will cost at least $1.75-billion, including operating and capital costs, to maintain that quality; other estimates suggest amounts in the hundreds of millions. Building a new stadium instead of renovating the existing one, the mayor says, would be more cost-effective since it would attract more events and have a longer useful life.
Financing for the new stadium involves the Titans and private partners investing about $800-million, including a $200-million contribution from an NFL loan program. The public portion consists of $500-million in bonds from the state and about $760-million from the local government. The local government would secure its amount through a 1% tax on all hotel room stays in Nashville and surrounding towns in Davidson County, and sales tax collected from purchases within the new stadium and at establishments on its 130-acre campus.
But the aim of a new stadium is to do more than merely replace the existing one.
The new stadium serves as centerpiece of a vision plan to redevelop about 350 acres near the banks of the Cumberland River that runs through the city's downtown. The larger project would take the East Bank stretch of waterfront land that city leaders and urban planners have marked as underutilized, and shape it into a neighborhood of public parks, recreation areas, residential complexes, retail outlets, restaurants, and hotels. It would expand Nashville's downtown district to more fully cover both sides of the river.
Nashville's claim to fame is its status as the center of country music. And its music venues, restaurants, bars, and outdoor amenities have made it as much a popular destination for business conferences as for bachelor and bachelorette parties. But, as research by University of Toronto professor Richard Florida and colleagues shows, the city has been experiencing a population boom led by people who are attracted to working and living in metropolitan areas in the center of the United States that have amenities and “assets like waterfronts or mountain scenery, research universities, well-endowed local foundations, corporations and anchor institutions that enhance both their business environments and their quality of life.” The city's professional, collegiate, amateur, and youth sports teams and the places where they play are a key part of that fabric.
Still, the term sheet that outlines the new stadium agreement is raising questions and concerns about capital costs, infrastructure expenditures, tax collections, and debt obligations. That comes along with the reality that the deal would put the stadium on the receiving end of the most public money ever allocated to an NFL venue. Add to it ongoing, broader criticism about using public funds to subsidize a multi-billion dollar private business owned by a billionaire—no less one that competes in the world’s most profitable sports league.
On the other hand, the new stadium would go long in keeping the Titans in Nashville for decades to come. Its dome would also make Nashville a sure-fire candidate to host the Super Bowl, as well as major sports, music, entertainment, and industry events throughout the year. The economics of spending on purchases by residents and visitors at those events figures to drive billions of dollars in revenue at the stadium and nearby businesses.
Major sports venues, like the one being proposed in Nashville, are unique in the different types of spending that they trigger when they are set up with the right objectives for partnership with and in the community. Spending in the venue, and patronage at nearby restaurants, bars, hotels, and retail outlets tends to rise when tens of thousands of people gather around an event. But while the economics of stadium and arena deals are as important now as they ever were, they are no longer the determining factor.
There is a fast-growing—and necessary—focus of attention on social impacts and community benefits. Within them are key points about what a stadium can do for the community and how it can be used by the community.
Following the announcement about the proposed stadium, the Titans's introduced a community benefits plan. The ONE Community platform builds on initiatives and efforts the team has been involved around Nashville. It further connects the franchise with fourteen local and regional organizations on the pillars of Opportunity, Neighborhoods, and Education. Titans executive Adolpho Birch said in a statement, the objectives are on “increasing opportunities for workforce and small business development, nurturing and enhancing our neighborhoods in need, and supporting education at all levels” because that is “what the community believed would be most impactful.”
Most people now expect that major professional sports organizations get involved in local workforce, small business, and neighborhood development. Yet, they don't take it for granted. People inside and outside the organization know that to achieve real results in these areas takes honest commitment. In the past, the items on Birch's list might generally be cast as community relations or philanthropic efforts. Now, they are being regarded as social impact and community benefits.
This isn't a matter of assigning new titles to old activities. It is a matter of engaging in a greater sense of commitment by both the organization and its community. And it means designing and using the stadium with that in mind: there is good reason why the proposed stadium in Nashville includes a 12,000-square foot multi-purpose space that can be used by schools, nonprofits, and community groups for the development and delivery of educational and recreational programming. Many of the stadiums and practice facilities that have been recently built or renovated in NFL cities around the country have incorporated something similar.
The debate over public money being put toward stadiums doesn't appear as though it is going to be sidelined anytime soon. But new developments in the social impacts and community benefits of stadiums are forcing changes to the basic assumptions about the economics of the facilities. The stadium on Nashville's drawing board can move the ball further in that direction.
