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fromthetop2

Not good news

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From Tuesday's Tennessean front page:

 

Investor doubts Predators deal will happen

Buyers' leader says lease changes rejected

By MICHAEL CASS

Staff Writer

 

 

The leader of a local group trying to buy the Nashville Predators said Monday that he doesn't expect the deal to work out.

 

The group on Saturday asked for new tax money and several improvements to the Sommet Center, where the Predators play. According to leader David Freeman, the city has rejected the requests.

 

 

 

"No, I'm not hopeful, but also not bitter," Freeman said Monday, after his group's proposal to change the Predators' Sommet Center lease was made public. "We put a ton of work into it, and we did our best."

 

His past-tense talk went further than Mayor Karl Dean's spokeswoman would.

 

"Lawyers with the city and lawyers with the ownership group are still in negotiations," Janel Lacy said. "The mayor feels he's not in a position to comment."

 

The group has until Oct. 31 to negotiate exclusively with Craig Leipold, the current owner, who previously had talks with buyers who might move the team out of town.

 

Freeman, CEO of 36 Venture Capital, proposed nine changes to the Predators' arena lease in a letter he sent Saturday to Larry Thrailkill, a private attorney hired by Metro. He said he and his business partners would not be able to make their deal for the pro hockey team financially viable without changing the terms of the agreement.

 

What the group wanted

 

The proposals included:

 

??? Allowing the Predators to keep "almost all of the state and local sales taxes and the seat use fees paid by those that use the arena" for hockey games and other events. That amounted to about $4.6 million in the 2007 fiscal year, which ended June 30, including $3.6 million from Predators games and $1 million from other events.

 

Freeman said the group didn't want $400,000 in sales tax revenue that goes to education, and he pitched the proposal as an incentive for the owners to bring more events into the Sommet Center. But much of the sales tax and seat use fee revenue helps pay off the city's debt on the facility, and giving it to the Predators would require Metro government to make it up somehow.

 

"For me right now, that's the biggest question," said Erik Cole, chairman of the Metro Council's Budget and Finance Committee. "I certainly don't want to do anything that undercuts our ability to repay those bonds."

 

??? Capping the city's subsidy of arena operating losses at $3,788,984, the 2006 level.

 

??? Letting the team leave Nashville if average attendance falls below the league minimum for revenue sharing, now 14,000, and the group loses $20 million total over its tenure.

 

??? Increasing the team's penalty for breaching or defaulting on its lease to about $50 million.

 

??? Asking the city to "assist the team in creating new revenue streams" to turn the arena's rehearsal hall into a concert venue; build three new "Fun Zones," club-level, deck-like areas where the price of a premium ticket also covers some food and drink; and make improvements to "eliminate excessive utility costs."

 

??? Allowing the Predators to use any parking facility that would be built as part of the proposed new downtown convention center. The team would have control of the facility starting two hours before most arena events.

 

Plan called 'minimum'

 

Councilman Jim Gotto of Hermitage said he had not seen the proposal but knows where he stands philosophically.

 

"I have an open mind about this until you tell me you're going to stick your hand in the taxpayers' pockets again," Gotto said. "The proof will be in the pudding."

 

Freeman said the ownership group was proposing only to use what he called "but for" money ??” money that wouldn't exist but for the Predators.

 

"Yes, it definitely creates a hole in the budget, but we fear it would create a much bigger hole without the team here."

 

Freeman called the proposal a "bare-bones, absolute minimum we could even make an attempt with." With any less money from the city, the prospective owners couldn't sign top players, win games, attract enough fans and make the business work, he said.

 

Freeman said he had great respect for Dean, however.

 

"I know he was probably as heartbroken as anybody over having to say no," Freeman said. "This decision appears to have not turned out the way we had hoped."

 

 

Terrible timing. Thank you Karl Dean for having an open mind and showing yourself you're not a Purcell-clone /dry.gif" style="vertical-align:middle" emoid="

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After reading a little more about the situation, I feel better that a deal with the city will get done. I do not appreciate the tactic used by some councilmembers, comparing an "extra tax burden" on the 99 year old lady that lives down the street....or the always used "for the children" and money for schools....LOL....Only the niave believe that sort of stuff.

 

Dean....What do you expect. If he is smart, he will get the deal done, take a little heat and in a month it will all be forgotten. If the deal isn't done, Preds leave and Dean ends up with a big black (or should I say red) hole on 4th avenue, several businesses closing (everybody forgets the vacant downtown during the strike year) that s*cks the taxpayer money anyway, which seem to be lost on a few councilmembers. Revenue does go down and he is a one termer.

 

If this were anything but sports, which will always be controversial, there would be no issue. Hopefully, level heads will prevail, personal biases left at the doorstep and do what is good for the city.... Keep the team.

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