The arena at 15: How Phil Bredesen’s gamble on downtown paid off

Sunday, December 18, 2011 at 10:05pm

At the time, there was no pro sports team.

Lower Broad was a mishmash of wink-nod massage parlors, dive bars and a smattering of Nashville mainstays.

But at Broadway’s intersection with Fifth Avenue late in 1996, Nashville had its shiny crown jewel: a new $144 million venue — at the time still seeking a name and known simply as the Nashville Arena.

To date, it was the city’s largest civic project, envisioned by then-Mayor Phil Bredesen as a spired jumpstart to Music City’s transition from midlevel Southern burg to the all-caps designation of World Class City.

Its inaugural event wasn’t a sporting event, nor was it a stop on a nationwide concert tour (those would come later). It was a two-night stand — Dec. 18-19 — for Amy Grant’s Country Christmas. Grant and her show sold out both nights and in fact had the highest-grossing shows in the U.S. that month. Most everything went off without a hitch.

There was plenty of hand-wringing during the planning and construction — the strangest controversy involved the arena’s proximity to First Baptist Church, which put beer sales on the northwest side of the building in danger of violating Tennessee blue laws.

Since Lower Broad was still quite seedy in 1996 — and even today the neon canyon is rife with bars — that concern, in hindsight, comes off as quaint to the point of preciousness.

There were, though, practical concerns: Would the arena ever pay for itself? Would it ever have a permanent tenant? Where would everybody park? While city officials, predictably, glossed over those questions, the last proved to be a problem even on opening night, when Vince Gill, performing in future wife Grant’s show, got slapped with a $50 parking ticket.

Many of those concerns are still valid — though, presumably, Gill, like other regular arenagoers, has figured out where to park — as the arena enters its second 15 years.

 

 

In that decade and a half, Nashville has had other battles over massive civic projects — the NFL YES referendum would come a few years after the arena opened, and the sturm and drang surrounding the Music City Center is the most recent example.

By comparison, the arena was an easy sell. The Metro Council’s final vote on the project — funded with, among other things, a small property tax increase — came just 86 days after Bredesen made his formal proposal.

The idea of an arena dated back to the mid-’80s, and Bredesen had hinted at the project in his 1992 State of Metro speech.

At a time when a number of other cities were locating arenas away from the urban core — certainly, non-downtown locations have certain advantages: The land is cheaper and parking revenue is easier to capture — Bredesen “always had the downtown site in his vision,” remembers Dave Cooley, who served as the mayor’s chief of staff.

“He recognized the critical-mass advantages and potential investment associated with a downtown anchor,” Cooley said.

To ensure that vision was recognized, the mayor’s team refused to allow any alternative site to be introduced.

“A key piece of the strategy was to never allow the site question to become an item for debate. There was only one site put on the table, and it was not open to discussion. This was critical, or else we would still be arguing over a site while Broadway opened more peep shows and perv shops,” Cooley said.

Bredesen’s play proved to be the right one.

“The building started this renaissance,” Predators CEO Sean Henry said. “Now we have an experience other people have to manufacture.”

According to current Mayor Karl Dean, 15 years on, it’s hard to overestimate the importance of Bredesen’s bold choice.

“When the mayor decided to build Bridgestone … he did that without knowing a basketball team or a hockey team would be here. He did it because he believed in the future of downtown, and it’s been a huge success,” Dean said.

 

 

In 15 years, the arena has been through four names. By the end of 2011, more than 18 million people will have passed through its turnstiles. A hockey team came and almost went, saved by a cadre of local investors. The building is a regular nominee for venue of the year awards and now is a common sight on busiest building lists.

Its impact on downtown is self-evident.

No longer at the gateway of a district in need of redevelopment, it’s now the arrowhead of a bustling entertainment district. The arena jolted Lower Broad into a destination. The Country Music Hall of Fame moved in across the street. The Music City Center will abut Bridgestone across Demonbreun. Dozens of restaurants, shops and glitzy bars are spread like a tourist-trapping blanket from Bridgestone’s front door.

The arena’s contribution to the after-hours busy-ness of downtown is apparent, but its impact on the business of downtown is no less remarkable.

Take, for example, Nashville mainstay Tootsie’s, across Broadway. In its last appraisal before the arena opened, the value of the legendary honky-tonk was $175,600. In one year, it jumped to $234,600. Its most recent appraisal values it at $528,700. Even adjusting the 1996 appraisal for inflation, Tootsie’s is worth twice as much today as it was before Amy Grant held that inaugural concert.

Dean noted that perhaps the best evidence for how the arena has transformed the city is to look at a time when it was underutilized.

“A good example of the importance of the arena is to look at the [2004-05 NHL] lockout. When the arena was dark most of the time, it really had an impact on the city,” he said. 

The actual dollars-and-cents impact of the arena is difficult to quantify. There is no recent vintage of the ubiquitous economic impact study.

The HP Pavilion in San Jose, Calif.,— two years older than Bridgestone but similarly situated in a move to bolster downtown development — has an economic impact of more than $250 million and creates the equivalent of 5,000 full-time jobs, according to a study that — strangely enough — was funded by the owners of the Sacramento Kings in an effort to encourage California’s capital city to build a new arena for the NBA team.

The Nashville Sports Council regularly publishes direct-spending estimates after the events it’s responsible for hosting — for example, the SEC Men’s Basketball Tournament, which has made Nashville a regular stop on its circuit. In 2010, the NSC said the tournament pumped more than $18 million into the Nashville economy in its weeklong hitch.

The SEC has now promised Nashville the men’s tournament in 2013, 2015, 2016 and 2019. It will play host to NCAA men’s tournament rounds in March. The women’s Final Four will come to town in 2014.

Sports traffic has been fairly steady since Day One. In addition to the Predators — and the regular return of conference and national basketball tournaments — the arena has hosted Olympic gymnastic and figure-skating trials.

What was lacking for years, though, was concerts.

Between 1997 and 2008, the arena averaged just 22 concerts, with an annual average attendance of 202,546. In 2009, there were 45 concerts with 387,672 attendees. Last year, 43 dates — including nine sold-out Garth Brooks shows — sold 491,297 tickets.

Even through the first six months of 2011, there were 26 concerts, outpacing the old
average.

The jump in concert dates is likely due to a combination of factors: The closure of Starwood Amphitheater in 2006 left the arena as the only large-scale music venue in the city; the new incentive package negotiated between Metro and the new Predators’ ownership put an increased emphasis on non-hockey events; and the proactive Brock Jones arrived as vice president of booking.

 

 

Fifteen years is an appropriate time to examine the life expectancy of a massive civic building. For decades, the conventional wisdom was that the practical lifespan of an arena, barring a major renovation, was 20 to 30 years.

For example, Newark, N.J.’s Continental Airlines Arena opened as Brendan Byrne Arena in 1981. By 2010, it was all but empty, with the NHL’s Devils and NBA’s Nets moving to the new Prudential Center.

Dallas’ Reunion Arena opened in 1980, and its replacement, the American Airlines Center, opened in 2001. Denver’s McNichols Sports Arena opened in 1975, with the successor Pepsi Center opening a quarter-century later.

There are outliers, of course. The iconic Madison Square Garden opened in 1968, though it regularly gets multimillion-dollar renovations.

With the advent of better construction techniques and an increase in government-built facilities, the lifespan is longer, but according to arena officials, only if the commitment to maintenance is there.

In 1988 and 1989, three new arena projects opened: Charlotte (N.C.) Coliseum, Orlando (Fla.) Arena and the Palace of Auburn Hills in suburban Detroit.

Now, barely more than 20 years later, the first two have been razed, while the Palace is still considered one of the NBA’s top-flight buildings.

“In Charlotte and Orlando, the money didn’t come in,” Henry said. “At the Palace of Auburn Hills, there’s a couple million [invested] every year. And every 10 years, there’s a $15 to $40 million renovation.”

Under the current lease and incentive structure, Powers Management — the arena management arm of the Nashville Predators — is paid $7.8 million from the city’s general fund. Since the local owners bought the team, and thus took over arena management duties, Metro has paid more than $38 million to Powers.

It was designed to be paid through tourism taxes and fees, but that money was shifted to the convention center, so the arena dollars come out of the general fund. The Metropolitan Sports Authority and the Predators agreed to extend a deadline for nixing the current incentive structure to the end of April 2012, with an eye to restructuring the deal.

Dean said he expects the discussions to pick up after the new year.

“It’s our goal to reduce that subsidy,” he said.

Dean said city leaders made a choice in 2007 and 2008 that having professional sports was significant enough for the city to subsidize, and in the meantime, the Preds and Powers have “more than lived up to their end” of the agreement, drawing more events to Fifth and Broad and increasing hockey attendance. Dean, while acknowledging the need for a cut in the subsidy, said he thinks the incentive package has been positive for the city.

Few, if any, other cities directly pay a tenant team out of the general fund to operate a facility. Many of those teams, though, have the ability to capture parking revenue — something that can’t happen at Bridgestone, a downside to the downtown location.

In Tampa, where Henry previously worked, the St. Pete Times Forum benefits from a $2 million capital fund — a combined city and county effort — with money coming in from arena-generated sources.

The Predators have indicated a willingness toward a similar deal here. At December’s Sports Authority meeting, Henry said raising the seat-user fee at Bridgestone Arena could be used as a new revenue source.

“We have to come up with a revenue stream,” he said. “We are open to talking about that fee. I think we need to address it.”

This comes in the wake of the Titans shelling out more than $26 million in LP Field renovations with bonds paid for by the user fee there.

Some members of the Sports Authority were reticent to tap into the user-fee dollars to pay for renovations for the football field, and may bristle at a similar plan at the arena.

But, arena officials say, having an up-to-date building is the key to long-term success.

The largest renovations at the arena came in 2007, with updates to concession stands and other public areas, plus a new $3.6 million center scoreboard and $2.6 million media control room. During the summer of 2011, the team opened up one end of the upper bowl to create a “fan zone,” a self-funded project of less than $100,000.

A new round of major upgrades would likely be less visible, but nonetheless important. Playing hockey in Nashville brings certain challenges when it comes to ice-making, especially when the schedule extends into the warmer months, as has become common with the Predators’ regular run of playoff appearances.

Henry says a permanent dehumidifier would help keep the ice in top condition and at the same time allow for the ambient temperature in the arena to be higher. Currently, the team rents a dehumidifier for the late-spring playoff push.

The HVAC and overall electrical system is largely unchanged since 1996, and 15 years of technological advancement have brought increased efficiencies — which could bring long-term savings in exchange for front-end spending.

More visible changes may also be needed. When the Music City Center opens in 2013, arena officials expect more than third of its visitors to come through the entrance on Demonbreun. Currently, only about 10 percent of arenagoers use those doors.

“We’ll have the opportunity to make that a major entrance point,” Henry said.

The rear of the arena is currently dominated by a 13,000 square-foot rehearsal hall, heavily utilized by performers — and the myriad Nashville-based lighting and audio companies — but unseen by the public at large.

When the Music City Center opens, the corner of Sixth and Demonbreun will become one of Nashville’s most visible — and valuable — pieces of real estate. 

 

 

The story of the arena — half-written though it may be — is one of a building that transformed downtown in a very real way, changing its neighborhood from a shady row of “peep shows and perv shops” into a Convention and Visitors Bureau-approved “Y’all come on and see us” postcard.

It’s drawn concerts and played its part in making Music City a major-league city.

It’s brought basketball tournaments and international exposure.

Built with little blowback, it now looks for a new balance of public/private contributions to stay modern.

And, according to Dave Cooley, the silver building at Fifth and Broad is a monument to a cultural shift in Nashville.

“I personally think the arena was Bredesen’s single biggest contribution to Nashville and what it is today,” the former mayoral staffer said.

“Yes, it anchored downtown and opened the door for the Titans to also call, along with the [Country Music Hall of Fame] and other development. However, I would argue that the greatest contribution coming from the arena was that it changed the way our city viewed itself. We moved from a city with some self-confidence questions to a city that said ‘Yes, we can.’ ”

7 Comments on this post:

By: JeffF on 12/19/11 at 9:22

I moved here as a much younger man in 1994. I remember going down to 2nd ave and lower Broadway. There were none of the peep shows and other adult businesses down there in early 94. This is not the first place I have ready that this wonderful building was able to travel back in time and close seedy businesses. Is the building's flux capacitor capitalized as a separate item or is it built into the historical cost of the building.

Does the arena's flux capacitor know that supporters of the convention industry are claiming that their current building on Broadway is the one that ended the seediness 15 years earlier?

Which massive building apparently nearing its depreciable estimated useful life was able to cleanup Broadway, the one that did it before it was even started or the one that supposedly did it years after it opened?

Kudos to the arena though. It was a good investment for the most part. Every city should have a large space for touring events and such and Nashville was without a quality one. This is a building that gets a lot of use by actual Nashville residents as well as pull in real numbers of visitors. This is probably the only beneficial (to citizens) facility completed by Nashville in the last three decades.

By: MusicCity615 on 12/19/11 at 9:39

Great article, and a tremendous investment for Nashville. Thank you for your bold vision Bredesen!

By: jdftn1947 on 12/20/11 at 7:04

Lower Broad was a mishmash of wink-nod massage parlors, dive bars and a smattering of Nashville mainstays.
huh dont think there were wink-nod massage parlors in the area .. but then again maybe I didnt venture into the areas of lower board that the reporter did
maybe yall need to check your facts .. or at least have someone on staff old enough to know the history of the city
just a thought
I sometimes wonder who writes these articles

By: govskeptic on 12/20/11 at 9:14

What wouldn't pay off with a 5 to 7 million dollar "per year" taxpayer subsidy ?
Maybe we should build a 2nd one!

By: pswindle on 12/20/11 at 11:49

Thank you Gov. Bredesen for giving Nashville and the the state of TN the boast that helps make it a great city and state.
Let's hope Haslam does not ruin what Bredesen so carefully built.

By: JeffF on 12/20/11 at 3:47

I think you are overstating the benefits of a simple arena there swindle.

By: BigPapa on 12/21/11 at 8:16

Give me $7M a year and bet I help stimulate Nashville's economy too.

We'd be better off to just pick 7 different Nashvillians each year and give each one of them $1M.