Councilman wants time to discuss convention center funding

Monday, September 14, 2009 at 11:45pm

Acknowledging that the proposed new convention center would potentially become the largest building project in the history of Metro, District 12 Councilman Jim Gotto has filed a resolution requesting six weeks for Council to consider the financing package presented by Mayor Karl Dean’s administration.

Gotto’s resolution won’t be considered until the Oct. 6 Council meeting.

The Dean administration has said it would bring a financing package for Council to consider in the coming months.

Once the administration files its financing plan, Gotto wants six weeks to allow for meetings with the financing and construction teams.

District 6 Councilman Mike Jameson said Council also needed a fair amount of time to present the financing package to constituents for their consideration.

Gotto’s nonbinding memorializing resolution also calls for Council to hold a public hearing on the issue where members of the public could express their support or opposition to the financing.

“Whether I vote for this project or against this project, and I haven’t made a commitment one way or the other, I certainly think we need to have as much discussion as possible, not just for the sake of delay… [but] to sit down and decide what’s best for the city,” Gotto said.

The administration has not revealed specifics on how the convention center would be funded, besides the tourism-related taxes and fees approved by Council last year. Additionally, a three-square-mile tourism development zone around the proposed SoBro site at the corner of Fifth Avenue South and Demonbreun would allow Metro to collect incremental sales tax gains as well.

Dean has promised that property taxes would not be used for the project. Estimates for the proposed convention center sit at $635 million in addition to another $200 million for its attached hotel.

In the meantime, other convention center legislation is moving forward. Council will consider at its meeting tonight a resolution to put in place nine appointments to the new Convention Center Authority, which will oversee development of Music City Center and its attached public/private hotel.

Already Metro has spent $16 million on predevelopment activities for Music City Center and allocated another $62 million for land acquisition. The Metro Development and Housing Agency, which is in charge of acquiring land for the project, has already begun issuing offers and negotiating with property owners inside the convention center’s footprint.

23 Comments on this post:

By: govskeptic on 9/15/09 at 2:44

Councilmen Gotto and Jameson seem to make sense in
requesting time to discuss these matters. The Administration
has taken months & months to attempt to come up with what
they think will get this project through

By: idgaf on 9/15/09 at 2:53

Not using property tax money is obamaspeak. Any city revenue used would have to be made up somewhere ,somehow else includeing the property tax on the footprint of the project plus the sales tax from 3 square miles of businesses.

Pre recession there was only 2 CC's in the whole country paying for themselves, Vegas and orlando both legitamate tourist destinations. Who knows now.

They are carring on like they actually voted on this which they haven't. I for one want the vote because if my guy votes for this folly he will not get my vote again. What they have established by moving forward without an actual vote is plausable denyability.

They are appealing to greed (tourist dollars) and that just isn't going to happen. Tax them enough (which you can't) and they will go somewhere else. We will wind up like other citys giving the space away to cut our losses.

By: idgaf on 9/15/09 at 2:58

We are building a hotel WHY? Could it be that private hotels don't think the risk/investment is worth THEIR money so they will use yours?

Why aren't they trying to at least find a partner for the hotel? If this was such a good idea they should be biding against each other for the right to be THE CC hotel.

Nothing about this project passes the smell test.

By: pandabear on 9/15/09 at 6:33

The financing is going to be dumped on us.
That's why Karl Marx Deano is keeping the whole thing away from
review until it's too late for anyone to interfere with his "remember me
always" project.

What an ego.

The last thing he wants is a vote, and that's the first thing we need.

Wake up !

By: JeffF on 9/15/09 at 7:05

I was thinking about the center this morning and I finally was able to come up with what is missing from this industry that would either smooth the road for them or kill off any public financing for good. This industry (meetings and conventions) produces little in the way of actual verifiable metrics. Instead it is allowed to substitute estimates and projections for the purposes of determining need.

I would recommend that convention center advocates and the current authority come up with at minimum the following metrics for at least five years (but preferably 10-20 years would go a long way toward improving the communities clarity of the people needing this money).

1. Annual actual meeting and convention attendance (excluding events for local consumption like auto, home improvement, bridal, boat, rv, and other "shows").

2. Annual actual and verifiable hotel room nights booked and paid for via by convention attendees (the contractual room nights contract amount does not substitute for this real number).

3. Number of days facility is used (including load-in days). Ratio that to the attendance for each day and attendance for actual day.

4. Capture tax revenue directly attributable to attendance at the Nashville Convention Center. We need to know if only 3 percent of the rental car tax or hotel/motel tax is coming from meeting attendees.

The CVB and the current center produces little to none comparative data for the current center. The only data currently available are the bogus economic impact and room nights that have little to no basis to actual observable fact. Also the CVB tends to just give us totals for all meetings in Nashville and leave it to us to assume it is because of the single public center. A look at the list of upcoming meetings will tell you just how few of meetings in Nashville actually use the center that is supposedly "too small". If a center is too small to host large meetings it should be dominating the market for the smaller ones in this area. Either way it is okay because attendees will be taxed just as if they were and Nashville can crow about being a top 15 meeting market.

By: producer2 on 9/15/09 at 7:25

"Instead it is allowed to substitute estimates and projections for the purposes of determining need."

I'm confused, isn't this how most business models work. You show (on paper) how your business can create revenues to support the growth of your industry and you go to a lending institution to get the capital to support your proposal. Isn't that the purpose of growing your business? When you can do this without outside help (public financing) AND you have history of of already successfully completing a similar project using the same business model and funding tools then you pretty much have proven your point.

By: govskeptic on 9/15/09 at 8:02

Comparing business and government in this instance is
like comparing apples with monkeys!

By: Kosh III on 9/15/09 at 8:12

Yeah, businesses are full of monkeys.

By: producer2 on 9/15/09 at 8:22

Why is it not comparative? Tourism is not government it IS a business. It follows a very similar business path, it takes a variety of workforce from white collar to blue collar most with a particular skill set to operate and it generates revenue. It has a profit and loss equation, It's employees pay taxes, it pays taxes on services. How is it not just like any other business? Much like Automotive or Health Care there are a plethora of cottage industries that rely on the main support structure for employment, etc. What is different?

By: nvestnbna on 9/15/09 at 8:54

By: idgaf on 9/15/09 at 3:58
We are building a hotel WHY? Could it be that private hotels don't think the risk/investment is worth THEIR money so they will use yours?
Why aren't they trying to at least find a partner for the hotel? If this was such a good idea they should be biding against each other for the right to be THE CC hotel.
Nothing about this project passes the smell test.

As a supporter of vibrant tourism in the city, it's not the panacea for issues downtown.

On the city's taking on the responsibility of the project, they and CVB did not want to relinquish to private parties that control. There were suiters willing and capable of building the hotel and convention center, or at least mitigating some of the risk, but the city wanted to be in that business.

Those folks were rebuffed early on in favor of city 'management', if that's what you call this process we're engaged in. I frankly think Gaylord has done a much better job of bringing and managing tourism in/to the city. Gaylord envisioned many years ago opportunities on 2nd Ave and Broadway and invested heavily. The CVB folks and their facility that turned it's back on both are oft to claim credit for which little is due (No-Commerce Street and Loading Docks on Broadway and across from the Ryman).

The Mayor and the Council have pretty much painted themselves into a corner on this and it'll take a LOT more than good intentions by both to salvage the results of poor early decisions, as hasty reactions to numerous missteps do little to assuage the fundamental problems and waste with this project.

By: producer2 on 9/15/09 at 9:13

Really, private entities stepped up to build the MCC? Can you name them? As far as mitigating some of the risk, the City does have a partner in the Hotel as previously named. Marriott outbid several other brands for that right. The details of that deal have not been disclosed at this point. So tell me who wanted to build (or mitigate costs) for the MCC?
As far as the CVB, well again you are not telling the whole story. The CVB works on behalf of ALL Davidson County hotels and facilities INCLUDING Gaylord. Their job is to help promote and generate sales leads for all of the properties and create room nights through both tourism and meetings and conventions. As far as our friends at Gaylord are concerned, they should be applauded for many of the community deeds they have done over the years, but we should also remember that they closed several businesses (including downtown and the theme park) renegotiated and eventually pulled out of their obligation for naming rights and partial ownership of the Predators, and have cost taxpayers millions in recieveing favorable tax breaks, road construction, etc. so let's not canonize them as the saviors of the City.

By: pandabear on 9/15/09 at 9:43

" By: producer2 on 9/15/09 at 9:22

Why is it not comparative? Tourism is not government it IS a business. It follows a very similar business path, it takes a variety of workforce from white collar to blue collar most with a particular skill set to operate and it generates revenue. It has a profit and loss equation, It's employees pay taxes, it pays taxes on services. How is it not just like any other business? Much like Automotive or Health Care there are a plethora of cottage industries that rely on the main support structure for employment, etc. What is different?"

The difference is that nationally, for more than a decade, convention centers
have been losing money.

Convention centers lose money.

$635 million ? Times 2 at least !
Then there's the "Hotel" at $300 million ? Times 2 again !
That's about 2 billion dollars, which is approx. $4,000 per person here in TaxVille.

The builders and land swindlers are the only ones who will make money.

The taxpayers will be stuck with the monumental bill for Karl Wacko's monumental ego.

We need a vote.

Wake up Nashville !

By: MusicCity615 on 9/15/09 at 10:41

pandabear you wake up.

$4,000 per taxpayer?? You are a LIAR and you know it.

By: MusicCity615 on 9/15/09 at 10:42

Pandabear---

635 million? oh yeah, the economist Pandabear says multiply by 2!!! 300 million times 2!!!! HAHAHAHAHAHA

By: pandabear on 9/15/09 at 10:57

Thanks for showing your colors Music boy.

Nice to know who's on the swindler's payroll.

By: pandabear on 9/15/09 at 11:06

...so I guess you agree on my other point.

"The difference is that nationally, for more than a decade, convention centers
have been losing money.

Convention centers lose money."

...or do you have some argument losing profanity for that ?

By: MusicCity615 on 9/15/09 at 11:41

Yes yes... Since I am for the Music City Center that mean I'm on the swindler's payroll....

I live in Dallas right now and voters approved a referendum for their convention center hotel, I guess over 50% of the population is on "the swindler's payroll"?

By: pandabear on 9/15/09 at 1:00

By: MusicCity615 on 9/15/09 at 12:41

"Yes yes... Since I am for the Music City Center that mean I'm on the swindler's payroll.... "

Thanks for clearing that up, Dallas boy

By: producer2 on 9/15/09 at 1:25

pandabear,
Just answer the question as posed. How is it different than any other business.

By: pandabear on 9/15/09 at 1:34

" By: producer2 on 9/15/09 at 2:25

pandabear,
Just answer the question as posed. How is it different than any other business."

Just because you don't like my answer doesn't mean there wasn't one, game boy.

By: producer2 on 9/15/09 at 2:27

Why all the name calling? Does that make you feel superior? I asked a legitimate question and by anyones standards you did not give a legitimate answer.

By: Dragon on 9/15/09 at 2:46

Doesn't anyone else find these italics annoying?

Italics - BE GONE!

By: govskeptic on 9/15/09 at 5:00

Business have to depend on quality produced numbers
for revenue and expenses. If the decision they make is
wrong they suffer the consequences both financially and
reputation alone, without a backstop(taxpayers) to come in and cover the misjudgement. With the Mayor and
Council if this Pink Elephant doesn't fly we may here
an OOPS in about 6 yrs as overhead soars like an
eagle and revenue drips like rain in the Sahara!