Dean cuts off PR firm for convention center project

Wednesday, August 5, 2009 at 6:10pm

In the wake of a burgeoning controversy surrounding the amount of money the Metro Development and Housing Agency has spent on public relations for the proposed new convention center, Mayor Karl Dean moved to suspend Metro’s use of the firm McNeely Pigott & Fox.

Dean instructed MDHA Director Phil Ryan to suspend using McNeely Pigott & Fox until a review of invoices turned in by the PR giant could be reviewed by the Metro Department of Finance.

The mayor’s move to suspend using McNeely Pigott & Fox comes after an expose by NewsChannel5 showed MDHA had spent over $450,000 on public relations since the firm was hired in the spring of 2008. The original agreement between MDHA and McNeely Pigott & Fox capped the contract at $75,000. However, it was amended last year and the bill has continued ballooning since.

Ryan defended the amount spent on PR and said the agency underestimated how much the work would cost.

However, in a letter to Ryan on Wednesday, Dean called for the use of MP&F to be suspended until “a more prudent approach to communication on this project can be determined.”

“… I do not believe that having an open-ended contract with a vendor is a fiscally responsible approach to managing this project,” Dean’s letter stated.

Invoices turned in by McNeely Pigott and Fox showed that the firm’s efforts sometimes included soliciting support from Metro Council members for the $635 million proposed convention center.

The invoices also show that McNeely Pigott & Fox has regularly met with Dean and his top aides, sometimes providing talking points and editing speeches the mayor has delivered about Music City Center.

District 6 Metro Councilman Mike Jameson said Council did not know the extensive role McNeely Pigott & Fox would play in the project when it approved the predevelopment phase of Music City Center in February of last year.

“My understanding of what McNeely Pigott & Fox’s role would have been would be to publicize public events and provide info about the convention center to the public,” Jameson said. “It would not have been to persuade, to lobby and to influence the decision-making process at all.”

Jameson also was critical of Dean’s administration leaning so heavily on the PR firm when the mayor’s office is already equipped with advisors and a media relations team.

“Why did an administration filled with smart, capable people see the need to have weekly meetings with a PR firm to shape a strategy policy?” Jameson asked.

McNeely Pigott & Fox founding partner Mike Pigott plainly said the firm did not help write Dean’s speeches. The invoices also show that the firm did not ultimately bill MDHA for about $30,000 worth of work.

“Our meetings at the Finance Department were to update everyone on the project, review revenue collection figures and expenses, discuss upcoming projects, and to review the most effective ways to present this information to the public,” Pigott said.

Pigott went on to say his firm is "proud of the job" they've done and have "tried to work efficiently" in meeting the needs of the mayor and Council.

"We will do as the mayor asks and help any way we can with the Finance Department’s review of our work," he said. "This is the largest project in city history, and the people, the mayor and the Council have demanded sound communications."

Jameson said he was pondering asking for a public meeting to call to light McNeely Pigott & Fox’s billing practices.

In his letter to Ryan, Dean’s support for Music City Center remained unwavering, despite the latest negative publicity about the project’s management by MDHA.

“The development of Music City Center is too large of a project and too important for our city’s future economic development to allow negative perceptions or potential mistakes in its financial management.”

The funds were provided by tourism taxes and fees, including the hotel/motel tax. So far Metro has spent $16 million on the predevelopment phase of the project and allocated another $75 million for land acquisition.

"We have done that in many, many ways using just 3 percent of the overall visitor tax money spent to date," Pigott said.

The Dean administration said it will bring a financing package to Council for approval in the coming months.

 

AttachmentSize
MDHA Letter.pdf39.61 KB

26 Comments on this post:

By: JeffF on 8/5/09 at 6:38

Considering his close ties with the firms partners I am sure this would done at the behest of the firm to save his face. MPF can still count other Metro Off Budget Enterprises as customers and those contracts will no doubt continue (NES, Nashville Convention Center, MDHA). Plus no doubt they will get a no-bid contract for all the money going to the Tennessee Land Trust work with the city. This will still go down as the salad days at MPF, even without this contract. The work was probably almost completed anyway and no work would be needed while MDHA waits for the miraculous recovery of the bond market for the benefit of an industry that has been dying for a decade.

By: govskeptic on 8/5/09 at 6:54

Well said Jeff: It's certainly unfair to taxpayers that oppose the City's position on an
issue when you have the PR firms and others paying certain News media to help write the story they wish to convey and constantly promote the one sided story and use your own tax dollars in doing so. The citizens of Nashville and their council
members are truly being outmatched on the MCC proposal.

By: slzy on 8/5/09 at 7:49

how are we now supposed to tell planted articles from news items?

By: slzy on 8/5/09 at 8:33

I know,they could put "advertisement" in the upper right hand corner.

By: producer2 on 8/6/09 at 7:39

JeffF,
How about you show up to make comments on the positive side of things as well. I did not see your moniker attached to any posts last week regarding the fact that Nashville had the 2nd LOWEST loss of Revpar in their hotels of any city in the US. That is a pretty big statement considering the economy we are in. Nor did I see you congratulate Gaylord on their positive 2nd quarter in this "decade of decay" as you put it. On the first subject, if you know anything about the meetings industry you can read the writing on the wall when you look at the cities who stayed Revpar neutral and those who did not. Cities like San Diego and Phoenix are on the lower end of the scale and those cities are big corporate meetings destinations. No surprise there. Cities like Washington DC and Nashville are far more Association based. Those groups who still have their meetings no matter the economy. While total numbers are down over the last year, future numbers are rising just like the economy.
AS far as MPF and MDHA, I think it is ridiculous that they have been allowed to bill on an open ended contract. I think you might see some heads roll on this one but it does not change the need for a new facility. I do think I should get a cut of that money since I spend more time than they do promoting the project...

By: JeffF on 8/6/09 at 7:49

Just for fun, try to find this information on the Tennessean web site. Are the overlords there suddenly embarrassed that their staff may be a little too cozy with the PR flak in town? Subscribers may start asking for refunds now that they know the Tennessean may have received money on the front end as well.

This comes at in interesting time. Public attention is rightfully focused on the methods convention centers proponents have been using here and in other cities. Even some media is beginning to examine the true cost of all this downtown development hype. I hope to see further examination of how Off Budget Enterprises like MDHA are given missions and a whole lot of money but then are exempted from typical public oversight and rules. There is a reason MDHA was given the task of building the convention center folks (instead of letting this be a pure Metro project). These are a lot of project supporters that need to receive rewards, and this cannot be done in an open government. Architecture, development, and PR firms that backed the project early on stand a risk of not being hired if there is an open, governmental purchasing project applied. So the project is given to MDHA which summarily grants these supporters their jobs without going through the stringent government purchasing requirements.

Someone has to take government back from MDHA and its backers.

By: JeffF on 8/6/09 at 8:01

Producer, good to see you. Did you know that the Rob Robinson vouches that you are not an employee of MPF. That is good news. Unfortunately once you connect the dots that means he knows who you are and means that he probably has billed metro for helping to prepare you for posting on these boards.

See, I do all this for free. No one can claim that I am working for anyone. The information from the last few days throws a shadow over the few MCC supporters who come on this site. People are left wondering, "how much did he just bill MDHA for that last post".

Seriously, I have been begging for weeks to have someone in the press do their job and pull the invoices and contract for MPF. I was beginning to think no one was going to do the right thing. One outlet finally did it and is reaping the rewards. A couple of others (NCP included) are printing information dug up by WTVF but are not going as far to editorialize. Then there are the outlets who are saying nothing. I wish that there was a way to call these people out in public for gross negligence in their job. The Tennessean and Gail Kerr has been talked about for at least a year for their odd fascination with getting this project completed. Now we finally know why and have the evidence. What do you do when the news lies to you because they have friends needing favors?

With all my begging about the invoices, I am surprised the flak wasn't better prepared for the contingency of someone actually doing it. Was that from the poor education PR types receive in school, or was it arrogance from knowing they had a tight control over this town's media outlets? I have never heard of a PR firm getting spanked this badly in public. They were even able to avoid the bad publicity of having Dave Cooley work there.

By: sidneyames on 8/6/09 at 8:27

Jeff, you said "AS far as MPF and MDHA, I think it is ridiculous that they have been allowed to bill on an open ended contract." and I thought the contract was for $75,000. That's what I thought the news (tv) reported and that it has now grown to almost 1/2 million. I was in favor of the CC; now I'm not so sure. I think I want a greater amount of accountability. And are you saying that the PR firm are Mayor Karl Deans friends?

By: Kosh III on 8/6/09 at 8:33

Dean put a temporary hold on this---BFD! It's too late. This was only done because they got caught, and now Dean & Co will have to find another way to do this.

By: JeffF on 8/6/09 at 8:34

At least two of the three named partners are real close political friends to the mayor. Their own websites crows about their handling the inauguration for him. They have several other contrancts with other Metro Off Budget enterprises and worked the PR slam on the anti-English campaign. The mayoral staffer who left the office to help on the campaign went to work under MPF.

The mayor if he wants to be truthful needs to terminate all the contracts MEtro has with MPF. This means NES, MDHA, the current convention center, and any other contract not publicized on the MPF website. I would imagine that they also have been promised the PR work for the Open Space project, that needs to be killed. The mayor's cozy relationship with MPF makes every project they each touch smell.

By: JeffF on 8/6/09 at 8:41

I will point out that MPF was in charge of promoting the convention center when they were hired by the hotel owners. When the project got picked up by Metro and MDHA they were rehired to promote the same thing to the same people. They have been paid twice for their initial legwork. Since this is all about downtown redevelopment, it should be noted that they are also in charge of PR for the downtown partnership. MPF makes money when three people sneeze in downtown. They are the PR arm of the Chamber of Commerce, one of the builders of the MCC. They are billing a lot of different groups that are hoping to make money on the convention center. Are they the gate keepers for getting in on the action/

I left one Metro OBE off the list of the previous list of MPF clients. The Metropolitan Nashville Airport Authority is a client of MPF.

PR firms are supposed to work behind the scenes. What happens when the PR firm is exposed for the political creature it has become?

By: nashbeck on 8/6/09 at 10:40

JeffF, calm down. Producer2 is right when he says this accusation does not stop the fact that Nashville needs a new convention center!

Build the Music City Center.

By: nvestnbna on 8/6/09 at 10:55

$450K in PR - whooppee!!! that's a flee bite compared to wasting a large area of downtown. It's going to cost them $20,000,000 + just to MOVE one property owner in the foot print, and what will we get, something not unlike what we have today - a facility that does little to radiate development energy, it thwarts it. A poorly designed building with public circulation on one side, three dead corners, and a blockade stretching east to west between the river and gulch.

In a day when folks are advocating against the May Towns because we need to focus on downtown, it's clear these guys are perfectly blind and willing to waste 100+- acres in downtown just to see this catastrophe built. Maybe they should google "progressive" and "sustainability" as it relates to urban development.

As far as the Mayor's letter goes, kudos to MPF on another well written PR piece.

By: JeffF on 8/6/09 at 11:03

Need is a subjective word. Especially since the only people with an actual need are the meeting planners. I especially love that a ournalist and NewsChannel5 went past the PR barricades and found one of the many hotel/motel owners not happy with the project. The flak had us all believing that the entire industry was behind this project when may of us knew better.

Once one reporter crosses the barricades, countless others will follow trying to one up the last one. Are we finally about to see the bare naked truth about the needs or cost of this boondoggle? Will the Tennessean staff finally start contacting other newsrooms owned by Gannett to find out how may of these buildings fail to live up to promises and expectations? Or will we continue to see the drivel of how Nashville has a brand and is different from all the other failures because "We are Music City and those other cities were just kidding themselves".

Nashville looks like it has the opportunity to look past the PR barrage that has felled many other U.S. cities. That will make us truly special. Hopefully the elected council members have started paying attention to what MPF has been shoveling into them and will examine the project on its true merits and history.

"Need" is a strong word when it comes to fluff items like convention centers. "Need" is a word associated with items like schools, public safety, roads, and utilities. A NEW convention center falls far short of that real "need". I would bet it is a "need" to the very few people who will profit from government spending on their "need". It was probably a need to MPF, a couple of downtown hotels, the honky tonks who have been promised millions of new customers, a politically connected construction company like Skansa or Bell, and a local architecture firm hired to be the face while the real stuff gets done out of state.

By: JeffF on 8/6/09 at 11:30

The Tennessean finally tells the story, posted something 10 minutes ago. Only three days late!

By: i.am.a.taxpayer on 8/6/09 at 12:34

Seems like somebody at Metro should have noticed this instead of waiting until the media reported on it. Doesn't anybody over there watch the checkbook? It may be a small sum compared the the total cost, but it could have used in a much better way (schools or other things). If the convention center is such a great idea, shouldn't that be something we could figure out without a media campaign to convince us???

By: producer2 on 8/6/09 at 12:58

A couple of points to consider...
I don't know Rob Robinson, but if he works for MPF you could have verified long ago that I did not work there and not put so much BS on these boards about my obvious connection. If I did know him it would be me preparing him instead of the other way around. As I have stated many times, I work in the industry and understand the business model and if it is truly feasible or not to fill anew facility. I am not a publicist.

Next as it relates to my last statement, again you did not reply to one of my questions. Why do you not acknowledge the positive things that have happened recently in the local hospitality industry?

You get on these wild rants and insert your own thoughts into what you believe to be the facts when they clearly are not. Case in point, your statement above:

"I especially love that a ournalist and NewsChannel5 went past the PR barricades and found one of the many hotel/motel owners not happy with the project. The flak had us all believing that the entire industry was behind this project when may of us knew better."

One guy who owns a small limited service airport hotel does not an entire local industry make. He has nothing to gain from it so why should he like it. Seems like our country is already in trouble using that kind of logic....

Here is another one:
"This comes at in interesting time. Public attention is rightfully focused on the methods convention centers proponents have been using here and in other cities"

Really? What scrutiny are you referring to? Dallas where they passed (by popular vote) the building of a new CC hotel. (I hear the financing is in place as well) Or Washington State where the Legislator is still in need of the funds that tourism has stashed away in order to continue to un their government.

And finally on that note:
"So the project is given to MDHA which summarily grants these supporters their jobs {without going through the stringent government purchasing requirements}."

No comment needed.....

By: JeffF on 8/6/09 at 1:03

IF not sucking as bad as other cities hospitality industries is a good thing then I acknowledge it. Declines are declines, losses are losses. A decline of a smaller amount is still a decline. Combine that with a decades-old declines and it is hard to see where the positive spin is.

By: JeffF on 8/6/09 at 1:18

I refere back to the news items that stated that the hospitality industry in Davidson is behind this bproject and its revenue streams. I argued that point at the time. Are you saying now that he is the only owner not on-board the Thinktrain. I would think that even a Lipscomb staffer would understand that there is not universal support for this boondoggle. HAving to hire a PR firm to shovel it is an indication that there are a lot of dissastisfied voices needing to be quelled to get this "need".

Dallas has not sold bonds, they are still waiting for the market to get fixed. Their board simply passed a bill that would allow the sell when/if the market returns rates not seen in years. Meanwhile the hastily cleared land will be mothballed and erosion controlled for a long wait.

Jumping the barricades:

http://www.ajc.com/business/georgia-world-congress-center-102746.html

http://www.philly.com/philly/business/homepage/20090726_Conventioneers_scaling_back.html

http://money.cnn.com/2009/07/24/real_estate/hotels_default/index.htm?cnn=yes

http://www.detnews.com/article/20090724/METRO01/907240382/1410/METRO01/Bookings-at-Cobo-slump-to-six-year-low

http://abclocal.go.com/wtvd/story?section=news/local&id=6929388

http://www.chron.com/disp/story.mpl/hotstories/6535379.html

http://www.kpbs.org/news/2009/jun/30/convention-center-expansion-worth-it/

http://content.usatoday.com/communities/hotelcheckin/post/2009/06/68493134/1

http://www3.signonsandiego.com/stories/2009/jun/16/1n16center002234-53-million-question/

http://www.nola.com/business/index.ssf/2009/06/convention_center_projects_ope.html

http://www.jsonline.com/business/49048021.html

http://www.usatoday.com/travel/news/2009-06-22-travel-technology-videoconference_N.htm

http://www.sandiegoreader.com/news/2009/jun/10/city-light-1/

http://www.ajc.com/services/content/printedition/2009/05/31/conventiontown05311.html

http://blogs.wweek.com/news/2008/12/06/say-sayonara-to-metros-proposed-convention-center-hotel/

http://www.neworleanscitybusiness.com/viewStory.cfm?recID=33344

http://voices.kansascity.com/node/4673

http://www.kswt.com/Global/story.asp?S=10336095&nav=menu613_2_6

I would bet that all these articles were written without the need of a bill being sent from a PR firm to the government.

http://www.columbusdispatch.com/live/content/business/stories/2009/05/18/city.html?sid=101

By: producer2 on 8/6/09 at 1:29

There is never universal support for anything. But you should talk to your friend Rob... you are really good at twisting things to suit your purpose...maybe they could use you on a project or two..

By: nashbeck on 8/6/09 at 2:27

JeffF of course touism is down right now, we're in a recession!!! The Music City Center will open in three years, when the economy will rebound!!!!

By: slzy on 8/6/09 at 3:04

the convention center will make so much money we will get rebates,instead of paying property taxes.

the only good thing about the center is the union mission will be able to use it when the old sears building gets too full.

By: nvestnbna on 8/6/09 at 3:56

JeffF, what's the story on "Moral Obligation Bonds"? I'm hearing some rumors this may be the direction we're headed on this. Not technically a GO Bond but woe will be the administration that defaults on one of these.

By: JeffF on 8/6/09 at 4:14

I had never thought of that one, mainly because they have never been approved by the state comptroller or legislature. That is really walking a tight-rope. One word that does not describe them accurately is "moral".

A council that tries to approve that investment type will face a huge court battle when they try to stop a referendum petition. The spirit of the law would define those as general obligation debts. Someone at the mayor's office is desperate to find a way to sell bonds when the revenue streams just will not support the annual obligation.

This was one of the slimy things invented by New York City in the 1970's (before they defaulted and were bailed out). I just cannot believe that someone in my city would even imagine using these things. The would have to know the courts and maybe even the state would stomp them or allow a referendum to proceed. I would think that there is one councilwoman that would have bovines if this was even attempted.

They are trying to issue debt but not trying to repeat the St Louis fiasco where they had their convention center hotel foreclosed on. Yes St Louis no longer is in possession of the hotel it built for their center. They are also trying very, very hard to avoid hearing from the public on this one thus the fear oif G.O.

This is bad people, you have got to contact your councilperson and make sure they know that this is wrong, wrong, wrong, wrong. Governments who use these are usually trying to hide some bad things from their people.

Quick Google search:
http://www.investopedia.com/terms/m/moralobligationbond.asp

What Does Moral Obligation Bond Mean?
A type of revenue bond issued by a municipality or similar government body. A moral obligation bond not only gives investors the tax exemption benefits inherent in a municipal bond, but also provides an additional moral pledge of commitment against default. The issuing body's commitment is supported by a reserve fund established to meet any debt service costs the government may be unable to make.

It is important to note that with a moral obligation bond, the additional security provided by the government is only morally - and not legally - binding. However, the pledge is generally regarded as being as credible as a legally binding promise because the issuing government would face negative credit rating effects if it failed to honor the pledge.

By: govskeptic on 8/9/09 at 7:11

Jeff-thanks for the insight on this boondoggle and it's funding. Many-many smaller and medium size players in the tourist industry here are either aganist or very skeptical of the MCC. They are however, very reluctant to speak against it fearing repercussions from the chamber and others they have to interreact with to earm
thy daily bread. Goldman-Saks will get the next PR fees to sell the financing package to the council, which we all know is made up of financial genius.

By: HESTERPark23 on 1/6/12 at 8:05

Make your life more easy get the loan and everything you need.