At an informal gathering of the Metro Council on Thursday night, Council members learned that they may indeed amend parts of a deal between a group of local investors buying the Nashville Predators and the city concerning changes that the group wanted made to the team’s lease with the Sommet Center before they purchase the team.
The Council was briefed on that deal by Metro’s lead attorney in the negotiations, Larry Thrailkill, along with Metro’s new Finance Director, Richard Riebeling, and attorney for the local investors, Chase Cole.
It was the Council’s first chance to see the details behind the agreement that will either keep the Predators playing hockey in Nashville for at least two more years after this season — and hopefully at least five years — or essentially cost Metro no more money to host the team.
And Thrailkill and Riebeling said the deal, negotiated by Mayor Karl Dean’s office for the city, was a winner for Nashville.
“We think it’s a good deal for the city and the finance department is comfortable with it,” Riebeling told the 28 members of the Metro Council that attended the informal meeting last night.
Still, council members had a number of questions.
Councilman Mike Jameson asked if the Council will be limited to a “yes” or “no” vote on the deal or will have the opportunity to amend the agreement.
Sue Cain, Metro’s legal director, responded by saying that the Council will be able to make changes to whatever proposed agreement comes before them.
No one could say what, if any, changes Council members would like to include — they have yet to be presented with a document with which to work.
But at the same time Thrailkill explained that once the lawyers for both the city and the investors actually come up with a working document, the Metro Sports Authority would get the first crack at it.
“The mayor’s intent was to say, ‘We’ll help you if you agree to stay five years, but if you leave before the end of those five years, we’ll be getting our money back,” Thrailkill said. “That’s the basis of this deal.”
Members of the Sports Authority on Thursday were not shy about the possibility of making changes.
“At the end of the day a document has to be generated that the Sports Authority will execute,” said Metro Sports Authority Chairman Kevin Lavender after leaving the meeting. “Will the Sports Authority have an opportunity to change the terms that have been negotiated by the Mayor’s Office? The obvious answer is ‘yes,’ because if the documents aren’t in a format that the Sports Authority is comfortable with, then they will not be executed.
“I’ve got confidence in Mr. Riebeling, Mr. Thrailkill and the mayor,” Lavender added. “Do I think there will be some tweaking by the Sports Authority? Yes, I think so… But the basic premise I’ve always carried as Chair of the Sports Authority, though, is let’s find a way to keep hockey in Nashville without hurting the general population of Nashville.”
What effect any tweaking would have on the agreement was something nobody was willing to say.
However, Cole did say that at some point down the road, whoever owns the team will need to know what their projected revenues will be in order to start negotiating contracts with players and coaches.
“The sooner we have a better economic picture, the better able we’ll be to make those decisions,” he said.
Although Predators’ owner Craig Leipold has not officially sold his team — which he reportedly offered to sell to Nashville’s local investors group for $193 million — the pending deal was unanimously approved in California by the National Hockey League Board of Governors last night.
Among the changes to the team’s lease of the Sommet Center that the local investors secured from Metro was an “early terminating rights and reimbursement” provision, which will let the team — after June 30, 2010 — leave Nashville without penalty if the team suffers cumulative cash losses exceeding $20 million and the average paid attendance is less than 14,000 per game.
The investors also secured a yearly subsidy from Metro as well as a new “incentive fee” of up to $2 million a year if the team’s — and related sales tax — revenues are high enough.
Some Council members had questions about where that money would come from.
Riebeling assured them that funds for the team will not be derived from property taxes, but from hotel and motel taxes.
After the meeting, Metro Council’s Budget and Finance Chairman Erik Cole said using hotel and motel tax revenues to fund Metro’s payments to the team was appropriate, but not necessarily feasible right away.
“I want to know where the money’s going to come from that’s needed immediately,” Cole said. “We still have a lot of pieces that need to come before us.”