Citing growing "criticism of running too much in Nashville,"
Gaylord Entertainment has withdrawn an offer to contribute $5M to
complete construction of a downtown arena and then manage the
facility, according to the Nashville TENNESSEAN. Frank &
Ippolito write the change means Leisure Management Inc. will
continue to manage the 20,000-seat arena for now and that
Nashville taxpayers will be liable for an additional $22.4M in
bonds and $2M up front in order to finish the facility by the
scheduled December opening date. Under the original deal,
taxpayers would have paid $5M up front and both Gaylord and a
national concessions company would have contributed $5M apiece.
Nashville Mayor Phil Bredesen asked the Metro Council to approve
a new plan under which the city would manage the arena. His
proposal also calls for the roughly $2M in annual debt on the
$22.4M in new bonds to be paid with arena revenue from
concessions, parking, a seat tax of up to $1 a ticket,
sponsorships and the sale of an additional luxury suite
(Nashville TENNESSEAN, 8/14). Mark Ippolito writes many
Nashville Metro Council members were "relieved" of Gaylord's
decision and that Bredesen's financial plan is being received
with "strong support" (Nashville TENNESSEAN, 8/14).
THE PRINCIPALS: Bredesen said the "headaches and
controversy" of Gaylord running the predominantly city financed
arena "clearly outweighed" the profit potential -- estimated at
between $800,000 to $1M a year. Bredesen: "The bottom line is
... this is a city venture again" (Frank & Ippolito, Nashville
TENNESSEAN, 8/14). Gaylord CEO E.W. (Bud) Wendell said he "could
sense" the building of negative feelings. Wendell: "This just
seemed to be a propitious time to say, 'Hey, the upside for us
financially is not that significant as arena manager, let's just
walk away'." Gaylord COO Richard Evans: "It was the right thing
for us to do" (David Climer, Nashville TENNESSEAN, 8/14).
NHL PICTURE STILL IN FOCUS: Gaylord's Wendell said the
decision will not affect their stake in a potential Nashville NHL
expansion franchise and that the company "remains committed" to
owning 19.9% of the team, with WI-based businessman Craig Leipold
owning 80.1%. Leipold called the pullout "a little bit of an
inconvenience," but said it will not alter his commitment to
bring an NHL team to the city. Leipold optimistically predicted
the likelihood of landing a team at 90% and said his biggest
question now is whether the franchise will begin play in '97-98
or '98-99 (David Climer, Nashville TENNESSEAN, 8/14). Noting the
city is "nowhere on the map when it comes to the NBA," the
TENNESSEAN's David Climer writes that Nashville has "rolled the
pro sports dice and it's come up N-H-L." Bredesen agrees: "This
isn't Los Angeles or Chicago. ... The reality is we may want an
NBA team, but we're not going to get one. ... If we don't act on
this, we could be sitting here 10 years from now without either
the NBA or the NHL" (Nashville TENNESSEAN, 8/14).
