Cost increases for proposed convention center hotel

Thursday, September 30, 2010 at 10:20am

The projected cost of Nashville’s new Omni Hotel that will anchor Music City Center has risen to $273 million, but Metro’s financial obligation has not changed.

The original estimate for the 800-room hotel was $250 million.

At a joint committee meeting of the nine-member Convention Center Authority, Metro Finance Director Richard Riebeling updated members on final negotiations between the city and Omni that are still ongoing.

The authority already signed off on a preliminary project agreement five weeks ago, but will be asked to approve a final agreement Thursday, Oct. 7. The agreement would then be subject to Metro Council approval.

“We’re paying the same amount of money as we were before,” Riebeling said of Metro’s obligation. “It was an estimate of $250 [million], but now they’ve got a budget. It will continue to evolve. It may be $273 [million], it may be a little more, it may be a little less.”

Under the terms of public-private final deal, Metro would pay Omni $25 million in tax-increment financing in 2011, and another $103 million over 20 years from revenue generated by the hotel through tourist-targeted taxes. Omni would cover the rest of the costs.

Convention Center Authority attorney Charles Robert Bone said the scope of the project outlined in the final agreement is no different than the preliminary plan. The hotel would include 560 parking spaces, 60,000 square feet of meeting space, four restaurants and a spa and fitness center, among other amenities.
 

 

18 Comments on this post:

By: JohnGalt on 9/30/10 at 11:18

Oh my goodness. Projected costs increasing.

Shocking, I say. Absolutely shocking.

By: producer2 on 9/30/10 at 11:37

"but Metro’s financial obligation has not changed."
Look beyond the headlines and you might see the whole story....

By: JohnGalt on 9/30/10 at 12:09

Did I say anything about Metro's share MCC cheerleader pro?

Polish your reading skills.

By: producer2 on 9/30/10 at 1:54

like everything else you do, you certainly insinuated it. Otherwise why comment?

By: JohnGalt on 9/30/10 at 3:51

Because you MCC/Dean toadies refuse to recognize the costs have been lowballed regardless of who pays. And, if you think the taxpayer's part of the tab won't increase you are a prospect for some beachfront property in Phoenix.

By: dnewton on 10/1/10 at 3:37

No Problem. Just raise taxes.. How about a floor mat tax in rented vehicles that visitors might rest their feet upon? Remember the promise that only visitors would pay for the convention center?

A cost over run is not a serious matter as long as the difference can be made up with new revenue. More money could be lost in the failure to make the estimated visitor count even if there was no cost over run.

By: bfra on 10/1/10 at 3:39

If Dean wanted to spend taxpayer's money on oceanfront property, here in Nashville, producer2 would be on here, trying to convience the taxpayers he could really see the ocean.

By: gohomenow on 10/1/10 at 7:31

Here we go. Commandant Karl's baby is going to cost more than we taxpayers were told.
Is anybody really surprised ?

By: producer2 on 10/1/10 at 7:32

If they ever started another political party and called it the Speculation Party, you guys would be the frontrunners to lead. It would suit you fine since there is no need for actual fact or knowledge from which you would speak. Meanwhile the rest of us in the real world would continue to go about our business and work on projects that are truly happening.

By: courier37027 on 10/1/10 at 10:12

Let me remind you of the Nashville Arena, a perceived bargain at $100 million. Unless you want seats, scoreboard and plumbing added. Then it's an extra $44 million.

By: bfra on 10/1/10 at 10:27

producer2 if they started a suckup, stooge party, you would be well qualified!

By: producer2 on 10/1/10 at 10:41

Why because I happen to agree with our elected leader? I guess then the majority of Nashvillians would also be members and again we would be the ones making decisions. Sour grapes will get you nowhere my friend... oh that's right you are already nowhere.

courier,
that is a pretty bad analogy. The Omni is going to pay for the construction of their hotel, not the City. The Omni is then going to operate the hotel as a "for profit" entity so I would be pretty confident that they are going to build it in a fashion that allows them to make money.

By: courier37027 on 10/1/10 at 12:56

@producer2,

Quoted from another NCP article today, "...The authority has already approved a preliminary agreement for the public-private financing plan to pay for the $273 million hotel." Public-private, so your Omni perception is wrong. Since the public is on the hook for part of this. You are right about one thing, Omni wants to make money. Sadly, as NCP reported, it will be at partial public expense.

Come back when you aren't wearing rose colored glasses.

By: TakePrideInNash on 10/1/10 at 2:10

I don't understand all the hate for the MCC. I think this will bring in a lot of revenue. It is going to be beautiful along with the arena and football stadium. Much better than being a ghost town.

By: producer2 on 10/1/10 at 2:51

Courier,
Know your facts. The money being given back to the Omni will be taken from money made from the Omni.First and foremost the Omni is going to put up 100% of the funds needed to both buy the property and build the hotel. The City s going to give the Omni 110 million from tax revenue that is generated by people using the hotel.So using semantics then yes, it is public money but it is public money that does not exist without the hotel. Without the hotel, there is no tax revenue. How much more simple can we make it for you?

By: producer2 on 10/1/10 at 2:52

Sorry it is only 103 million....

By: courier37027 on 10/1/10 at 7:45

This makes perfect sense...go into debt to finance something that has no guarantee of being profitable. Of course the great excuse awaits, "Well, we already started building it. It will cost more, so we may as well finish it." Logic like that and producer2 can be viable and understood only by those who spend someone else's money. Perfect sense if you build first and hope later.

If this hotel was such a great idea, private businesses would be falling all over themselves to buid this with private monry thuse reaping benefit for themselves.

By: producer2 on 10/2/10 at 7:01

Are you even reading these articles? Private industry IS building the hotel, with their own money.