November 18, 2007

Predators, Nashville agree to $4M a year in lease breaks

The new owners of the Nashville Predators and the city of Nashville have agreed to revisions of the team's Sommet Center lease that the owners insisted were necessary to keep the team in town. I've only skimmed the agreement, but it looks like the big items are that the team owners will get a $750,000 a year rent reduction, a cut of non-hockey revenue, plus a share of any sales tax revenue at the arena exceeding what's currently collected - effectively sales tax increment financing (STIF), which is widely considered even more economically dubious than regular TIFs. (The total resulting transfer of money from the city to the Predators has been estimated to total $4.2 million a year.) The team can also opt out of the lease as soon as 2012 if attendance drops below 14,000 a game, a figure that the team has had a hard time exceeding of late.

The new lease is the result of a months-long shakedown of the city by the new owners, who insisted they'd let out-of-town interests by the team and move it if they didn't get lease concessions from the city. Or, as the editorial board of the Tennessean newspaper puts it:

Nashvillians owe a debt of gratitude to the city and the prospective buyers of the Nashville Predators for the way they have worked out a way to keep the NHL team here. ... The two sides exploring a new lease could have taken adversarial positions in their talks, but the negotiators seemed to be engaged in the pursuit of a common goal. From all accounts, the negotiations were conducted like a joint venture, not a face-off, and the city should benefit from that effort. It would be nice to see that spirit continue as the process moves to the Metro Sports Authority and Metro Council.

These things always go so much more smoothly when everyone's on the same page.