Local Government is a GREAT Landlord !
Last week on indienash.org, I wrote about a recent report by the Institute for Local Self Reliance highlighting Nashville’s skyrocketing commercial rent. This has led to many of our locally-owned businesses shutting their doors or moving away from the very neighborhoods they helped to grow.
One of the solutions mentioned in the report is for local government to create a preference for locally-owned, independent businesses in publicly- owned buildings and properties.
With the kick off of Ascend Amphitheater’s concert season, I was reminded that leasing out publicly-owned, taxpayer-funded space to for- profit entities is something city officials are ALREADY doing.
AND upon research it turns out they are a GREAT landlord.
To get a full picture of how this kind of public-private partnership unfolds let’s start from the beginning.
In 2012, the Nashville Chamber of Commerce released this report analyzing Nashville’s music industry. Contributors to the report was inclusive of leaders in many sectors of the music industry. But representing the live music industry were heavy hitters like Live Nation, William Morris Endeavor, Ryman Hospitality Properties, Country Music Association among other traditional influencers in local government. Sadly there were no local independent promoters or venue operators invited to this party.
One of the conclusions in the Chamber report was: “Opportunities for growing venues to expand quantity and variety while raising the overall quality are pieces of the puzzle to vault Nashville into the next level of global awareness of its live music scene. Intentional acts by local public and private leaders to encourage and sustain new venues can speed this outcome.”
In 2013, Mayor Karl Dean shares plans for an outdoor amphitheater to be developed on city-owned land. On June 23, 2014, public notice was given for the opportunity to bid on this project. The public had until July 8, 2014 to submit bids.
On August 9, 2014, it was announced Live Nation was chosen to operate this publicly-owned venue. The global giant beat out a handful of eager independent promoters and venue operators in the bidding process, among others. Ryman Hospitality Properties was first runner up.
See how quickly we can get things done when we bring motivated people to the table?
The final details of this public-private partnership only came in the form of bullet points through local officials, media and Live Nation last year.
Here are just a few ways our local government helps this global, publicly-traded corporation to thrive:
- 10 year lease with no increased rent or security deposit
- Reimbursement of ALL property taxes and occupancy taxes IF this property is ever assessed. Other Metro-Owned properties have “Lease Agreements” in place with businesses. To ensure a fair market for competitors they are assessed and accountable for property taxes. This deal HOWEVER is structured as an “Operating Agreement” with Metro Parks. According to an official I spoke with at the Davidson Co Assessor’s office, Live Nation is exempt from paying the typical Commercial Property Tax rate on 40% of the total appraised value of the 1.5 acres they profit from
- Minimal upfront expenses for build out
- Provide all lawn and turf care
- Business keeps majority of profits from earned (and some pre-existing) revenue streams like ticketing fees, ticket sales, food, beverage and sponsors. Like this one below
Wow! So many great ways here to ensure businesses can enter and/or sustain the market during the crane chaos that has taken over our city. Although, I am certain our community-minded, independent business owners don’t mind paying the property taxes which help fund our schools, police departments, parks and public facilities.
I am eager to see if our new city leaders will use these same type policies, funding and strategies to keep our locally-owned, independent businesses thriving at the State of the City Address this Friday at Ascend Amphitheater. Join me?