NASHVILLE, Tenn. (AP) – An economics professor has called into question an impact study used by the city of Nashville in a pitch for a Major League Soccer stadium.
The Tennessean reports the study failed to take into account that sales tax revenue redirected to pay off stadium debt might put a strain on city and state coffers. The financing package approved for the stadium could use more than $3 million of annual sales tax revenue – funds that could be used for other purposes, such as schools, roads or the hiring of about 50 police officers.
The analysis written by the University of Tennessee, based on some basic assumptions provided by an MLS owners group, did not include a so-called substitution effect – what happens after public funds are used to pay off the stadium debt and fans use their limited entertainment dollars to attend soccer games, according to the newspaper.
“It doesn’t seem to be the kind of objective appraisal that the city would need to render a believable opinion on why they should spend public money subsidizing the stadium,” said Robert Baade, an economics professor at Lake Forest College in Chicago.
The Metro Nashville City Council last week approved a $275 million financing package for the new stadium, including $225 million in revenue bonds for the stadium itself and an additional $50 million in bonds for renovations and improvements around the stadium at the current fairgrounds.