District 26 Metro Council Member Courtney Johnston Weighs In on Ambiguous Lease Terms, Liabilities Around Stadium Deal

Live from Music Row, Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Metro Nashville Council Member for District 26, Courtney Johnston, to the newsmaker line to weigh in on the Titans stadium deal and ambiguous lease terms leaving Nashville on the hook.

Leahy: On our newsmaker line, Metro Council Member Courtney Johnson. She represents the 26th district here in Metro Nashville, Davidson County. Courtney, thanks so much for joining us this morning.

Johnston: Yes, absolutely. Thanks for having me.

Leahy: You have been all over this stadium deal, and we have a story that you oppose the idea of having the cart before the horse. I guess your complaint is that the mayor is trying to jam through this term sheet before everybody understands what’s in it.

Johnston: That was certainly the way I think most of the council members perceived what happened. It’s one thing to bring the term sheet to us to say, hey, here’s where we are in our discussions at the moment. What do you think? We want to bring you in early so that we don’t get ahead of ourselves.

But to attach it to a resolution and ask us to approve that term sheet as is, understanding it’s nonbinding, and also approving an ordinance that would turn on a hotel tax that is specifically for a new stadium is absolutely cart before the horse. Regardless of anything we’re ever talking about, I’m always going to be against putting the cart before the horse.

Leahy: Yes, absolutely. There’s a bit of a mystery that perhaps you could help solve for me. I was here when the 1996 referendum went and they approved the stadium deal, and the stadium was built. At the time it was built, there was very little discussion of this claim that the city would be responsible for making it a first-class facility in 2017.

I guess there was a report that said it needed $300 million in renovations to keep it first-class. All of a sudden, it seems to me out of the blue that now it’s going to take $1.7 billion to $1.9 billion to meet that agreement standard and keep it first-class. Where did that come from?

Johnston: That is specifically in the lease agreement that was signed between Metro and the club. So it’s a very ambiguous term, and I think that’s part of the problem that we have. It’s 100 percent the problem that we have here right now is the fact that the lease that was signed in 1996 was so Metro-responsible-heavy, and we’re in a pretty tough spot as it stands right now.

But it specifically says that we shall build and maintain a first-class facility. So your question is a great one. What does that mean? What they’re calling comparable facilities? Clearly, in 1996, that wasn’t the case.

But Allegiant Stadium in Nevada, Mercedes Benz Stadium in Atlanta, and US Bank Stadium in Minneapolis are now what is defined as comparable facilities as it relates to this particular term sheet. So that’s sort of what we’re looking at.

Leahy: I read the lease agreement, and it doesn’t say comparable to Allegiant Stadium or the latest. It says comparable to the majority of similar facilities.

My view on all this is that if the mayor really didn’t want to build the stadium, he wouldn’t be claiming its $1.7 billion of obligations to the city. What are your thoughts on that?

Johnston: I can’t speak to what the mayor wants to do over and above anything else. I just really can’t speak to that. I have no idea. You’re right, it doesn’t have specific comparable stadiums in that lease. It just has a very ambiguous term.

Depending on who’s reading that, that’s when you get yourself, again, a really poorly written lease in that when you leave something like that large of a piece of it up to interpretation, that’s where you get yourself in trouble.

Leahy: This deal came under the leadership of the supposed business genius Phil Bredesen, and yet it seems to be a very, very, very bad deal. Do you think Phil Bredesen is responsible for putting this bad deal together?

Johnston: I can’t speak to what happened in 1996. I was in high school in 1996.

Leahy: I think in 1996, when you were in high school, Courtney, you could have put a better deal together than Phil Bredesen did.

Johnston: I agree it’s a bad lease. No question about it. But you have to remember, Nashville was a very, very different place. And part of the lease was getting the Titans to come here. So it needed to be from their perspective. I’m sure it needed to be pretty aggressive.

And, hey, we want you here, and we’re going to really step up to the plate to make it really attractive for you to come here. Clearly, it worked, but now we’re sort of in a situation where it obligates us to some things that we as a city, cannot afford to adhere to.

Leahy: Courtney, I remember the public argument when the referendum was passed. I think it was passed a little over with like 54 percent, 55 percent, or something like that. The argument at the time is, this will be good for public education in Metro Nashville. How’s that working out?

Johnston: You got me there. I don’t know. Education around football? I have no idea. (Chuckles)

Leahy: Well, they were claiming that it would help provide funding that would make K-12 public schools here better. They’re much worse than they were back in 1996. How long have you been on the council, Courtney?

Johnston: Three years.

Leahy: Does the mayor give you an annual report about the unfunded liability for making the stadium first-class? Have you seen that at all? I haven’t seen it.

Johnston: So there are several unfunded liabilities that we have right now that I can speak to. So we have roughly $30 million left on that original bond issuance. We also have $32 million that we owe the Titans, because another part of the lease that is disturbing, and it’s gotten us into a bind, is the fact that we, Metro, are responsible for the maintenance and capital improvements, all that stuff, to the stadium.

We haven’t been able to do that for the past four years. So the Titans have done it for us to the tune of $32 million. So we’ve got about $62 million of unfunded liability there as far as the cost to upgrade it to a “first-class” facility that’s been ballparked at $1.75 to $1.95 billion.

That report we’re supposed to get, I think today, if not tomorrow, from BFG. So that will be interesting to see. This is another part of putting the cart before the horse. It’s like, well, let’s look at all the options and fully vet them to say this maybe could work renovating the stadium. Let’s see what it really would cost. Let’s see how we can pay for it.

Leahy: So you’re open to that idea? You’re going to analyze that claim of $1.7 billion to make it first-class. You are going to look at that very closely then, it sounds like.

Listen to today’s show highlights, including this interview:

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Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Reporwith Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
Photo “Courtney Johnston” by Courtney Johnston. Background Photo “Nissan Stadium” by Walker Kinsler. CC BY-SA 4.0.


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