The cost for a new Tennessee Titans stadium could range from $1.9 billion to $2.2 billion with an additional $4 billion for a mixed-use development of the surrounding neighborhood, according to new projections provided to the Tennessee Legislature.
The domed stadium is expected to take 31 months to build and be ready for the 2026 season, as Titans CEO Burke Nihill said previously.
The surrounding neighborhood development will have from 4 million to 6 million square feet of retail, office and residential space and will take 10 to 15 years to construct, according to the documents, and will be funded by the team’s owners.
The estimates also include uncited economic impact estimates and do not reflect research on the impact of other sports stadiums from economic experts.
“It’s hard to make much of the numbers when the methodology is not reported,” sports economist J.C. Bradbury of Kennesaw State University in Georgia said about the two-page report. “Economic impact studies can be tricky, and so such raw numbers without much explanation should not be viewed credibly by anyone.
“This is especially important given that stadium advocates often commission advocacy reports that miraculously project large economic benefits that economists are never able to find after the fact.”
Bradbury said that was one of the reasons he took another look at the Atlanta Braves’ taxpayer-funded stadium, Truist Park, in Cobb County and its economic impacts. The stadium opened in 2017.
“We were told it would generate $19 million per year in surplus,” Bradbury said. “Turns out it’s running a $15 million annual deficit.”
The new Titans stadium estimates say there was $41.7 million in annual state and local revenue from games during the 2019 season, but don’t show how a new stadium would affect those revenues.
“It looks like it is just reporting gross numbers, not net numbers,” Bradbury said. “That is tax revenues that come directly from Titans stadium-related spending without accounting for the fact that much of that spending would have happened elsewhere. This is just reallocated spending.”
An additional 1 percentage point hotel tax in Davidson County passed a Tennessee House committee this week. The estimated revenue from the tax increase could generate up to $10 million in additional taxes each year to be used toward what House Speaker Cameron Sexton said would be $700 million from Metro Nashville taxpayers.
There is $500 million in state funding proposed in Gov. Bill Lee’s budget amendment and Titans’ ownership is expected to contribute $700 million, according to Sexton.
The state proposal involves the state issuing $500 million in bonds with $55 million in annual recurring payments for the state.
The state report also includes a stadium cost/benefit analysis sheet that now estimates the bonds to have a 4% debt service that will ultimately cost the state $710 million over 20 years.
The analysis also includes an estimated 1% tax rate, which it says will bring in $235.6 million over 30 years from a breakout of the 7% sales tax rate that includes 5.5% going to the metro sports authority, 1% for the general fund and 0.5% going to education.
The bonds are separate from the hotel tax, which would have to be passed by Metro Nashville’s government and would likely be allocated to the stadium.
The hotel tax would be similar to state sales tax funds, which the Tennessee conceded in a bill last year.
That includes 100% of the sales tax from tickets and sales at a stadium along with 50% of the sales tax from a planned development on the 130 acres surrounding a potential new stadium.
A fiscal note on that bill estimated that it would send $10 million annually to a special state account for the Davidson County Sports Authority.
The cost/benefit analysis, however, estimates that tax revenue from the mixed-use campus would be $414.8 million over 30 years, or $13.8 million annually.
This article was originally posted on New Tennessee Titans stadium could cost as much as $2.2 billion