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An ordinance approving an agreement between the Metropolitan Government and Nashville Riverfront Amphitheater, LLC, an affiliate of Opry Entertainment Group, relating to management, operation, and maintenance of the West Riverfront Amphitheater and supporting grounds and buildings.
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WHEREAS, The Metropolitan Government of Nashville and Davidson County (“Metro”) developed a first-class amphitheater and public park on the west bank of the Cumberland River; and,
WHEREAS, the amphitheater is to be used as a high-quality venue for live music and other performances and civic events; and,
WHEREAS, pursuant to the terms of the agreement attached hereto and incorporated herein, Metro proposes to engage Nashville Riverfront Amphitheater, LLC, an affiliate of Opry Entertainment Group, to operate, manage and maintain the amphitheater and supporting grounds and buildings and to arrange for, promote and manage performances at the amphitheater; and,
WHEREAS, it is in the best interest of The Metropolitan Government of Nashville and Davidson County that the management agreement be approved.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That the management agreement attached hereto and incorporated herein is hereby approved, and its execution on behalf of the Metropolitan Government is authorized.
Section 2. That any amendment to this agreement shall be approved by resolution of the Metropolitan Council receiving at least twenty-one (21) affirmative votes.
Section 3. That this ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville & Davidson County requiring it.
Agenda Analysis
Analysis
This ordinance, as amended, approves a management agreement between the Metropolitan Government (“Metro”) and Nashville Riverfront Amphitheater, LLC, an affiliate of Opry Entertainment Group, (“Opry”) relating to management, operation, and maintenance of the West Riverfront Amphitheater (“Amphitheater”) and supporting grounds and buildings. Opry was selected to manage the Amphitheater pursuant to a competitively-bid RFP process. This contract succeeds a previous 10-year agreement with Live Nation Entertainment, Inc. to operate the Amphitheater.
The agreement allows Opry to operate, manage, and maintain the Amphitheater. Opry will have the right to all revenues derived from the operation of the Amphitheater, including ticket sales, sponsorships, broadcast rights, and the sale of food/beverages and merchandise. Opry will be required to cover all operating and maintenance expenses, including utilities and security. Metro will be responsible for maintaining structural elements of the facility, other core elements typically maintained by landlord, and the landscape and mowing around the premises outside of the Amphitheater.
Opry will be required to make an annual base rent payment of $600,000 to Metro for the duration of the contract, as well as $3.00 seat fee per ticket sold in any calendar year. The agreement also requires Opry to pay 25 percent of the net profit generated by the title sponsorship. Opry is also required to remit, annually, fifty cents from the sale of each ticket to be paid at Metro’s direction and designated at the advisement of the Metro Parks Director to a Metro Parks Board Authorized Parks Support Organization - these funds shall be used to support Metro Parks facilities. Opry will also be required to pay Metro 50 percent of all concessions for non-fixed civic events and during July 4.
As part of the agreement, Opry will commit to a minimum capital investment of at least $11 million into the facility over 10 years. This investment will be spent on upgrading the facility (including furniture, fixtures, and equipment), IT, sound, and production equipment, replacement equipment, assets and furniture, improved seating and premium hospitality experiences, and enhanced food and beverage offerings. Opry also agreed to invest $4 million in years six through 10 of the contract if the gross box office revenue is more than $75 million during the first five years of the contract. Upon each 5-year optional extension, Opry must commit an additional $2,500,000 capital investment in the facility.
Opry must invest up to $1 million in capital improvements to relocate, enhance, and upgrade the greenway bordering the Amphitheater and up to $100,000 on associated design work. Opry would ensure continuous public access to the greenway at all times, not permit any event-related obstructions on the greenway, implement all needed physical modifications and operational changed to ensure continued use of the greenway. As amended, Opry would have access to Metropolitan Government property to construct these greenway improvements.
Opry is allowed to have no more than 45 “fully amplified events” per year at the amphitheater. These fully amplified concerts could exceed 96dBA, but not surpass 102dBA from the Front of House sound board for more than five consecutive minutes. Other events that have partial amplification would not count against the 45-event cap. Opry must ensure that at least 15 concerts take place at the Amphitheater per year. Failure to put on at least 15 concerts will result in a monetary penalty to Metro of $15,000 for each concert event less than 15.
Metro will have the right to use the Amphitheater on July 4, the week of CMA Fest, and for three fully amplified civic events. Metro also reserves the ability to host New Year’s Eve events at the Amphitheater. Opry is not to charge rent for any of the civic events, but the party responsible for the event (whether Metro or another organization) will be responsible for the operating expenses associated with the event. Fully amplified events would occur between approximately April and October every year. Good faith sound mitigation efforts would also be made by Opry.
The contract term would begin on January 1, 2026, and end on December 31, 2035. Metro and Opry will possess mutual options to extend the term for two five-year periods. Opry’s base rent would increase to $700,000 per year during the first five-year extension and increase to $800,000 per year during the second five-year extension. Opry would also commit to additional capital investments upon each five-year extension.
Opry is required to maintain commercial general liability insurance coverage in an amount not less than $1 million single limit, plus additional insurance with a limit of not less than $5 million per occurrence. Opry will not obtain property insurance covering the Amphitheater. Metro shall not be responsible for any loss or damage to Opry’s personal property, which Opry is solely responsible for safeguarding and insuring.
Any amendment to this agreement shall be approved by resolution of the Metropolitan Council receiving at least twenty-one affirmative votes.
Fiscal Note: Opry Entertainment Group will manage the Nashville Riverfront Amphitheater through its affiliate, Nashville Riverfront Amphitheater, LLC, under contract number 6600212. Nashville Riverfront Amphitheater, LLC will pay at a minimum of $11,000,000 for capital investment into the facility during the initial 10-year term of this agreement. A contingent capital investment of $4,000,000 will be added in years six through ten if the gross box office revenue from the concert events is at least $75,000,000 during the first five years. In addition, an investment of up to $1,000,000 for capital improvements and up to $100,000 for associated design work on the greenway bordering the Amphitheater will be made. An annual budget of $2.00 per paid ticket from concert events will be expended for activation and safety investments. Metro will receive an annual base rent of $600,000, or $50,000 per month, during the term of this ten-year agreement. There are two options to extend the term of this agreement, provided that the capital investment in the facility and the greenway is completed. The first option is for an additional five-year period with an annual base rent of $700,000, and the second option is for another five-year period with an annual base rent of $800,000, along with an additional minimum of $2,500,000 capital investment upon each five-year option extension. In addition to the base rent, Metro will receive revenues from concert event seat fee of $3.00 per ticket on a quarterly basis, $0.50 per ticket annually from the sale of concert event tickets, 50% of all net profits through sales of concessions for all non-fixed civic events and the July 4 fixed civic event, 25% of net profit generated by the title sponsorship, and private events fee, equal to the lesser of $10,000 or $2.00 per attendee, for private events that utilize the Amphitheater stage and/or the Riverfront Room.