Wednesday, March 19, 2008
Predators owner plans to max out city funds
Proposal would cap city's liability at arena at $3.8 million By COLBY SLEDGE • Staff Writer • March 19, 2008 The Nashville Predators' new owners expect to ask the city to pay the team $3.8 million every year, even when the team doesn't lose that much money, the owners' leader said. Under the agreement, which was approved by the Metro Sports Authority on Tuesday, the Predators would cap the city's liability for operating losses at the downtown Sommet Center at about $3.8 million — the same funding provided in 2006 — plus up to 5 percent a year in adjustments. But even if those losses dip below the threshold, the owners expect to spend at least that much, said David Freeman, lead owner of the Preds group. Freeman said those funds primarily would be used to bring in big-ticket events, like the NCAA Women's Final Four basketball tournament, that he argued would bring in more tourism dollars for the city. "We're not worried about taking risks anymore," said Freeman, CEO of 36 Venture Capital. "We're going to take some risks." If the arena loses less than $3.8 million, the difference could also be spent on capital expenses such as improvements to the building itself, according to Larry Thrailkill, Metro's attorney in the negotiations with the pro hockey team's owners. Freeman stopped short of saying the money would be spent solely on bringing events to the arena. "If we do something that enhances the arena and that brings in more events, then that's a terrific expenditure," Freeman said. Freeman expected to have about 150 days of events from July 2007 to the end of June this year. That would be 30 days more than the previous fiscal year, Freeman said. The sports authority approved the agreement, 7-1, after deferring the vote earlier this month, frustrating some Predators officials. After Tuesday's vote, the phrase "one down, one to go" could be heard among several members of the audience. The decision will now go to the Metro Council, which is expected to vote on the agreement April 1. "I don't totally feel we got the best deal, but we may have gotten a better deal than we had, and I think we should go ahead and work with these folks," said sports authority member Arnett Bodenhamer. The dissenting voter, Steve North, said he thought the new lease might leave the city paying for more than it expects. "Anytime you have a complex agreement, there are always unintended consequences," North said. Freeman's statements brought mixed reactions from Metro Council members, who now must look at the agreement before possibly turning it over to Mayor Karl Dean, who helped negotiate the proposal. "I think a selling point for council members was if we can figure out a way to cap the amount of losses," said Councilman Erik Cole of East Nashville, chairman of the Budget and Finance Committee. Councilman Michael Craddock of Madison, who is also on the committee, said he was disappointed the group had already planned to spend the funds. "I guess it is, unfortunately, to be expected," Craddock said. "You give someone a line of credit or allotment, and they're going to spend it." A simple majority of the council's 40 voting members will be required to pass the agreement, which would be made retroactive to the current budget year. The city would likely pay about $4.5 million this year in incentive fees and other changes to the lease, including rent reductions and an increased cut of advertising revenues for the Predators, Thrailkill said. The city will be able to pay for that through various funds, Metro Finance Manager Bob Lackey said, including hotel/motel tax revenues. Contact Colby Sledge at 259-8229 or firstname.lastname@example.org.
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