While Nashville waits to see the details for a proposed domed Titans stadium and development along the east bank of the Cumberland River, there’s another deal that has been discussed for almost two years: Mayor John Cooper’s office has been actively negotiating with Bristol Motor Speedway to redevelop and run the Fairgrounds Speedway.
With BMS would come a return of NASCAR racing to Nashville. But it also comes with an ever-increasing price tag.
The Banner talked to multiple sources familiar with the negotiations in addition to Metro Council members who will be responsible for ultimately approving the agreement. Many of the representatives on either side of the deal would not speak on the record because the agreement is not yet finalized. Both sides provided on-the-record statements, which are included below.
What would the deal look like?
According to draft versions examined by the Banner, Metro would continue to own the facility and enter into a development and 30-year lease agreement with BMS, a subsidiary of Speedway Motorsports Inc. and one of the largest racetrack operators in the country. Metro would issue up to $100 million in revenue bonds, which would be backed by multiple streams of income: rent from BMS, annual payment from the Nashville Convention & Visitors Corp., a percentage of revenue earned by BMS, naming rights, a tax on tickets sold to events at the track and sales tax generated by racing and events. Additionally, there would be a cap of 10 racing weekends per year, including local racing and any possible NASCAR races. BMS would be responsible for leading the demolition and reconstruction of a new grandstand with luxury boxes as well as a resurfacing of the track and installation of new safety walls and sound barriers.
Why does this deal matter?
Racing in some form — first with horses, then with cars — has been held on the site for more than a century. From the 1950s through 1984, it was the site of annual NASCAR events until the series began moving to bigger tracks. Richard Petty and Darrell Waltrip dominated Cup races at the track during this era. Even after NASCAR left in a dispute over track management in 1985, the racetrack has continued to host local racing, as well as the All-American 400, a late-model stock car event. After an effort by then-Mayor Karl Dean to raze the Fairgrounds in favor of an office development was rebuffed by the Council, Nashville voters approved by a 2-to-1 margin a 2011 amendment to the Metro charter that enshrined racing at the Fairgrounds. Any effort to change the usage of the area — such as adding a soccer stadium — now requires 27 votes in the Council instead of a simple majority.
So, who is paying for this? And will Nashville taxpayers be on the hook for the bond debt?
According to documents, a previous version of this deal using $75 million in bonds would have required a little more than $4 million per year to cover the debt service. But with rising interest rates and a higher redevelopment cost due to inflation, that number is expected to be closer to $5 million per year on $100 million in debt. The capture of ticket taxes and sales taxes are, by one projection, expected to cover some, but not all of the debt, meaning that non-racing events at the track will be needed to make up the gap. The CVB’s $1 million-plus annual payment, for example, includes 20 days per year to use the speedway for events. Both the city and BMS have commissioned studies about the revenue potential for a redeveloped track that are expected to become public when the deal is presented to the Fair Board, perhaps as soon as a September meeting. While both the Cooper administration and representatives of BMS have said that the studies show there could be sufficient revenue to cover the cost of the bonds, neither of the studies were made available to the Banner and no one would say if the studies anticipated higher bond debt.
A number of options have been floated as possible non-racing money makers, including using electric cars to run laps at corporate events.
“Labor Day weekend at Bristol, Cletus McFarland is coming in and running knock-out races and silly stuff. He’s a YouTube celebrity and he’s bringing in people to race Lincoln Continentals for like 10 laps,” said Norm Partin, a Nashville native who has promoted events and is familiar with the deal and how it would function. “That’s not a motorsports event, right? A motorsports event is a race to the flag, right? Last year they had Dude Perfect. I think it was 20,000 people that bought [tickets]. That stuff will be coming here. The monster truck series will be coming here. And the goal is to operate the track [like that]. You take 365 days and you put the X’s in the boxes. There is untold concert potential.”
Some are skeptical that the track can throw off enough revenue to cover the higher bond debt, however. Jason Bergeron, who until earlier this year was the chair of the Fair Board before he resigned, is one.
“Maybe there’s some concerts. I don’t think the speedway is a good concert venue, especially next door to one that probably is a much better concert venue: the soccer stadium,” he said. “[Former fair board member] Erin McAnally, whose husband is a longtime musician, thought it was laughable that they think the Speedway is going to be like a real concert venue. But supposedly, maybe some of the [Nashville Convention & Visitors Corp] days are concerts. I think when you start to have more than three or four of those, that’s a real impact on the community. Then there’s the corporate events that feed that 5-percent revenue share column. When I sat down with Julie Bennett, the general counsel for BMS in November, I just had her walk me through what those are and what she described that is like an event dinner, right, like a corporate dinner kind of thing. … But that’s a lot of event dinners to add up to that much revenue. And I don’t know if I buy [the revenue model].”
After extracting guarantees for the debt on the soccer stadium from John Ingram and Nashville SC, representatives from the Cooper administration declined to say whether Metro or BMS would be contractually obligated to cover the bond debt.
Why is there no deal yet?
Multiple sources familiar with the negotiations say the deal has been “95 percent” completed for a year. A press release from Cooper in December 2020 anticipated NASCAR racing as soon as this year. In March 2021, Metro signed a letter of intent with BMS to reach a deal on the fairgrounds, and Cooper said that “I look forward to working with the Fair Board and the Metro Council in the months ahead” to complete an agreement “to bring back high-level racing at no cost to taxpayers.”
An announcement was made at the 2021 NASCAR Banquet this past December that the two sides had agreed to a financial framework. .
“This administration has a case of the slows,” said one source. Another called it a “plodding, hand-wringing group.” Cooper supporters say it’s important to reach the right deal, not the fastest one.
The delays in reaching a deal have had a measurable impact on the final price. After initially saying the deal would cost $50 million, the Mayor’s office put a $100 million placeholder in the current Metro capital improvement budget in May, up from a January estimate of $75 million.
But after almost two years, both sides agree the Metro Council’s decision to quash a proposal to host the Republican National Convention means both the racetrack and Titans stadium deals need to be buttoned up before the state Legislature returns in January. The state has approved $17 million and $500 million for those deals, respectively, and a Republican supermajority looking to exact a measure of retribution might take it back.
Will there be a community benefits agreement as part of the deal?
As of now, no. In the negotiations for the soccer stadium, Nashville SC entered into a CBA pushed by Stand Up Nashville that led to that project adding affordable housing, a child-care center, an incubator for small businesses and a wage floor of $15.50 per hour for stadium employees. While some Metro Council members have mentioned a CBA as being preferable before they could support a deal, none was contained in versions of the deal up to this point.
BMS touts a “community benefits commitment” to six nonprofit organizations, including Conexión Américas and the Boys & Girls Clubs, a promise to match the wage floor at the soccer stadium and the creation of a Nashville chapter of Speedway Children’s Charities.
What is the process?
If the parties sign an agreement, it would go to the Fair Board — where all members were appointed by Cooper — for approval first and then to the Council, where a deal is expected to receive a harsher audience. Multiple council members contacted by the Banner said that Cooper has done little to no outreach.
“It’s just bad governance, the lack of communication and transparency,” said Council Member Tanaka Vercher, a former Budget committee chair. “Regardless if the deal has been finalized or not, you can always provide preliminary information to the council and to the public.”
Colby Sledge, whose 17th District contains the Fairgrounds, was frustrated. “The last conversation I had with them was during the [budget process], in which I had to ask why they had upped the revenue bond amount from $50 million to $100 million and had not mentioned anything to me about it,” he said. “And they told me that it was because costs had been expanding. So I had a call with the administration and said, ‘I think there needs to be a better line of communication going forward on this.’ And I haven’t heard anything since.”
What are they saying on the record?
- “Mayor Cooper’s chief priority throughout our conversations about the Speedway’s future has been getting the best deal for taxpayers and the surrounding neighborhood,” said Cooper spokesperson T.J. Ducklo. “We’re excited to be working with the best operator in the industry to get our 118-year-old track back to a high level, and optimistic about the way forward as both sides take the time to get this unique partnership right for Nashville.”
- “Working with Mayor Cooper, we are near completion of an agreement that achieves a shared vision for the future of the speedway and expect to bring a proposal to the Fair Board and the Council in the next few weeks,” said Jerry Caldwell, executive vice president of Bristol Motor Speedway. “This agreement fulfills every principle Mayor Cooper outlined in our letter of intent, including renovating the historic Speedway, giving it an economically successful future and completing a full renovation of the Fairgrounds. Given COVID and other city priorities, it’s taken a while and some patience by both the city and our company that will be worth it in this really strong long-term partnership.”