by Jon Styf
Nashville’s Fair Board narrowly approved a deal that will now head to the Metro Nashville Council to rebuild the Fairgrounds Speedway for a price that has not been finalized.
The deal, approved by a 3-2 vote from the Fair Board, authorized the issuance of up to $100 million in revenue bonds for the project, in addition to $17 million from the state of Tennessee and $17 million from the Nashville Convention and Visitors’ bureau reserve fund, which comes from Davidson County hotel and motel tax collections.
A pro forma for the deal estimates $168 million will be paid in debt service on the bonds over the 30-year life of the lease. Those bonds will be paid for by ticket tax, rent from Bristol Motor Speedway, a sales tax capture, 5% revenue share, an annual $650,000 payment from the CVC and revenue from advertising and sponsors.
The deal would build a new 30,000-seat grandstand, track and surrounding structures at the speedway with the plan of bringing a NASCAR race to the stadium. The new track would be run by Bristol Motor Speedway.
As part of the deal, Bristol will keep all proceeds from its four main race weekends.
The Fair Board found out in November it would be asked to approve the deal without a final price.
A report by Conventions, Sports & Leisure International in May showing the planned funding for a $116.3 million project would fall short of its payments.
After that, the deal was adjusted and the CVC funding was added to the project. The documents approved by the Fair Board included a stipulation that any successor to the CVC – which is contracted by Metro Nashville for tourism services funded by the hotel tax – would take over the CVC’s financial responsibilities.
The documents also were amended to change the term “ticket tax” to “user fee.” Metro Legal Deputy Director Tom Cross said at the meeting it would allow Bristol to not charge the fee to all users, such as Boy Scouts groups. But, much like a rent payment stipulation in the new proposed Tennessee Titans lease, it could be used to argue against the requirement of a higher Metro Council voting threshold required for new taxes.
A pro forma for the deal from Metro Nashville projects the fund to pay off revenue bonds on the project to bring in $209.9 million over the length of the lease. The largest portion of that is a $60.5 million sales tax capture at the speedway with $40.3 million in estimated ticket tax, $34.8 million in rent from Bristol, $19.5 million in CVC annual payments, $22.3 million in advertising and sponsor revenue and $24.5 million from the 5% gross revenue share.
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Jon Styf is an award-winning editor and reporter of The Center Square who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies.
Photo “Nashville Fairgrounds Speedway” by Nashville Fairgrounds Speedway.
I am in favor of the race park being rebuilt but passing a motion without having a final figure is BAD. But this has become the accept standard for any and all professional sports venues in Tennessee. Bad stuff going on here.