Convention center land acquisition flies through Council

Tuesday, June 2, 2009 at 8:31pm

Without any debate, Metro Council passed at its Tuesday meeting two pieces of legislation allocating $75 million to the Metro Development and Housing agency to begin purchasing properties in SoBro for eventual use as a new convention center.

Council approved the land acquisition with a 28-6 vote. The dissenting Council members were Michael Craddock, Pam Murray, Bruce Stanley, Emily Evans, Jason Holleman and Robert Duvall.

Two members who were absent, Mike Jameson and Eric Crafton, would likely have been dissenting votes as well.

MDHA will have eminent domain powers at its disposal as it jumps into purchasing the 16 acres in the footprint for the proposed Music City Center. The land is bordered on the west by Eighth Avenue, the north by Demonbreun Street, the east by Fifth Avenue and the south by what will become Korean Veterans Boulevard.

Metro has said it hopes to complete the land acquisition phase by late summer, but one attorney representing property owners said the legal process for eminent domain hearings can take quite a while.

The legislation received no debate on third and final reading, but a word of warning was offered by Duvall, who said, “I do not see where the numbers have matched.”

Some Council members have been critical of the step-by-step approach taken by the Mayor Karl Dean administration, which chose to purchase the land in SoBro before offering a comprehensive financing package for the convention center project. The latest estimate for the project sits at $635 million without factoring in the public/private hotel, which will be attached.

The $75 million for land acquisition will come from tourism taxes and fees approved by Council last year.

At-large Councilwoman Megan Barry, who spearheaded a community forum on the issue of Music City Center, said she did not view a vote to approve land acquisition as a final vote supporting the project.

Questions have been raised as to what will happen if Metro purchases the land but ultimately doesn't pass authorizing legislation to build the convention center.

The state legislation enabling the creation of new tourism taxes and fees stipulated those revenues could only be used for a new convention center.

But Metro Council attorney Jon Cooper wrote in his legal analysis of the bill the debt could be retired on bonds issued to buy the property with the tourism taxes.

“Metro’s bond counsel has provided an opinion, which the council office is in agreement with, stating that the debt on the MDHA bonds may continue to be paid from the tourist accommodation taxes if the council later decides not to build a convention center, provided the property is not used for non-convention center purposes while the debt is outstanding,” the legislation analysis stated.

The Dean administration has not stated when it will have a financing package ready to present to Council.

Filed under: City News

19 Comments on this post:

By: producer2 on 6/2/09 at 8:58

should be a fun day on the blog!!!

By: idgaf on 6/3/09 at 1:31

My guy just lost my vote. Anyone of the dissenters can have it running against dizzy dean.

By: bna37214 on 6/3/09 at 7:14

This is ridiculous and in 2 months when school is getting ready to start back, we will hear how there might not be any money to run the buses.

We have a perfectly good convention center - perhaps we should do a better job of marketing it - that won't take 75 million dollars and the other portion could go to education or any other number of causes that need money these days with so many people out of work.

By: pandabear on 6/3/09 at 7:45

Nashville has just been permanently crippled by the
lying manipulations of a single politician, Karl Dean.

Inflation is expected to run 13% this year.

The convention center will cost well over 1 Billion dollars.

By: willtw on 6/3/09 at 7:46

we need a motion before the Council that for every member voting for the convention center, resign his post and to return from whence he came....This is financial irresponsibility at it's best.......Turn this pig around, put him back in his poke, hold a new election for each Council post, for the mayor's office and for each of those responsible for this hogwash. Former Sheriff Thomas (R.I.P) would be surely proud of his "porking" friends for supporting this ridiculous project. Opry Hotel has enough convention space to satisfy the need for meeting space. Is it because Nashville has always been envious of that landmark hotel (downtown vs the edge of town) or, that Nashville government can run a better operation than private enterprise? Close the schools, leave the potholes open and we can all get together in the new convention center, holding hands and singing, "cume by ya"............

By: edvv on 6/3/09 at 7:54

Having experienced MDHA's condemnation procedures under Nicely/Bredesen, I can tell you that what the law requires and what MDHA does diverge. Since Ryan was a Bredesen flack, now head of MDHA, I don't think that we can expect a forthright process, certainly not a transparent one.
I would seem before spending $500m on a new convention center, we should at least have a plan to dispose of the old one and the Municipal Auditiorium, a long time white elephant.
MDHA ran out of funds when seizing land for the stadium, so they strong-armed and threatened small businesses. Several had to close because MDHA did not provide meaningful assistance in relocating (as required by state and federal law), nor did they pay moving expenses in accord with the legal statutes. In my case, the judge hearing the case summoned me into her office and told me explicitly that she was an empolyee of the state and how did I think that she would rule!
Absolute power corrupts absolutely!

By: Dragon on 6/3/09 at 7:58

Looking at the map, it appears that many acres of parking will be lost for the Sommet, Country Music HOF, Gaylord Entertainment Center and the Ryman Auditorium.

First, you must hurt tourism before you help.

By: Kosh III on 6/3/09 at 8:06

Dragon. That's the major drawback to downtown, traffic and parking. This will only make it worse.

By: Captain Nemo on 6/3/09 at 8:17

I would think that will be parking space built in on the site or next to it.

By: Anna3 on 6/3/09 at 9:09

Bo Mitchell just lost my vote...and I voted for him last time! I'll actively work to get someone to run against him. I had been hearing that Charlie Tygard said he was going to come back and run against him but since Tygard voted for this too...there is NO difference between them. Its time for new blood. Thank you Concil Lady Evans! and thank you Eric Crafton. We need a new Councilman and a new Mayor...Karl Dean must go!

By: producer2 on 6/3/09 at 10:19

What are you thanking Crapton for, he didn't even show up!

By: sidneyames on 6/3/09 at 11:29

I asked a city councilman about this. He said it was "private donars" who are funding the convention center. Isn't a Donar someone who just donates and does not get anything in return? So I think symantics are playing a role here. They are private INVESTORS. Why are we taxpayers putting the upfront money for the land so that a group of private investors can make money down the road (if they don't go belly up)? And it rolled through city council because Karl Dean is intimidating for one thing and the good old "boy" system is working well in Metro government. I want to see the survey that shows all the people and companies who called Nashville to set up a convention who were turned down because we had no room at the inn for them. I bet they are few and far between. What came first? The chicken or the egg? This Karl Dean regime thinks they can lay eggs BEFORE they even get a hen or a rooster. Next election will bring about a more fiscally responsible mayor - I hope.

By: producer2 on 6/3/09 at 12:25

What?

By: idgaf on 6/3/09 at 1:01

How can they buy/condem land for something that hasn't been approved yet? There is no way they are going to get revenue bonds for this project which meants they will sock it to us to the tune of $2000 for every man,woman and child in the country.

Just this 75 mill is $150 each.

We need new management.

By: JeffF on 6/3/09 at 1:15

The bond market is complety crippled right now. It is too late to stop a huge hole in the ground but there is zero chance of selling a bond in the next year. That means all those meetings dependent on having a new center will suddenly be able to make do with the current center and hotels. If they can get the available dates from all the weddings and Bar Mitzvahs being booked in the facility.

The entire bond market has been flushed for the foreseeable future, not just junk bonds for convention centers. The attempted destruction of Chrysler and GM debt holders will be tied up for years until the Supreme Court finally rules that these debtors do have first dibs on a bankrupt entitiy. The preferred route of taking unpopular projects through OBEs like the MDHA in order to avoid public oversight and will has been thusly cutoff for the foreseeable future. And Mayor Dim has already shown that he does not have the cajones to make this a General Obligation project and risk opening the details up to the general public. That would mean that it becomes instantly more difficult to send money to PR firms since they would be working for the city not MDHA. The tourism/meeting overlords wanting this thing given to them would have to start spending their own money on promotion and campaigning and they have shown zero desire to put any of their own skin into this game played out on their behalf (every dime spent has come from one form of taxes or another).

So this time next year, Mayor Dim will put his finger in the air and see if the bonds can sell under 5%. Then it will be three more months before the next credit check. Then three more months. The question is, does the mayor's office have it in them to be truthful and public about it before the first property is bought and the first business is closed . Doing so would risk not getting that hole in the ground that will be necessary to sell the public that it is too late to turn back now. Either way he risks having Nashville wake up to a "Mayor Evans" before the first bond is ever sold.

By: govskeptic on 6/3/09 at 2:31

Nashville is about to build a giant 1970 size convention center & hotel based on extraptied data reflecting the values of the 70'/80's. The current and possiblle future of Municipal bonds is about the same. They can and are now going bust just as GM(Giovernment Motors) bonds are. So that market is no longer a push over or certain. Many council members are like the lady that represents my district. She would swap 300 feet of sidewalk in front of some donors house for a vote to build this $900,000,000.00/1B Pink Elephant.

By: JeffF on 6/3/09 at 3:54

The land purchase will be the last affordable thing they can do on this project. Everything else is difficult. Of course conventional wisdom would have been to get the project approved first but some people are willing to sacrifice their principals to put the big ol' vacuum cleaner in place before the real votes (whatever year that will be in).

Revenue bonds this week with the same tax rating of Metro are up to 5.99 for low risk utility ventures. No one has sold bonds for high-risk ventures such as this (convention centers, stadiums, convention hotels) for several weeks but the sealed bids apparently were going in the 7 or 8 range. This venture will die unless the interest rates fall deep into the fours. Keep in mind the market is acting counter-cyclical at this time because other interest rates are falling, the bond market's movements are indicative of a problem with no solution in sight. In this case, that causes me to smile. My city will just have to stick to borrowing money for necessary government projects instead of the boondoggle ones.

By: JeffF on 6/3/09 at 3:58

Have a good week and a half everyone, I'm going to the beach and avoiding local news the best that I can.

By: Time for Truth on 6/3/09 at 4:46

Anna, prod got that one right! Thanks for what? Crafton probably found out there weren't going to be that many TV cameras there, or he was busy speaking at an anti immigrant rally.

Also disappointed in Erik Cole, who knows better and has many constituents opposed to this giant waste of resources. Wonder when he runs again?

Kudos to Emily Evans and Holleman - good to see 'No' votes from the progressives! Also for the 'no' votes from perhaps the two most conservative members. And Pam Murray? Who would have thought....

Jeff, have fun at the beach.