A state panel has approved new boundaries for Nashville's tourism development zone, a defined area where a portion of sales tax revenues would be used to help pay off bonds for the proposed $585 million convention center.
Metro officials had previously devised the funding mechanism using a three-mile radius surrounding the footprint of the Music City Center. But state Comptroller Justin Wilson, a member of the state’s building commission, had questioned its outline, as it included neighborhoods in East Nashville and near Jefferson Street, areas that wouldn’t seem to enjoy direct economic benefits from the new convention center.
The seven-member building commission Thursday approved new boundaries unveiled by Metro Finance Director Richard Riebeling that exclude these areas, establishing the Cumberland River as the eastern border, Charlotte Avenue as the northern boundary and the Interstate loop as the southern edge.
The zone’s western border, meanwhile, has moved approximately two miles down active West End Avenue, as project leaders aim to collect revenue from the numerous hotels that dot the corridor. Collectively, the territory now encompasses 2.8 miles, but it exempts car dealerships and other businesses that clearly don't cater to tourists.
“In talking with the state and working with them we agreed that businesses that are going to be directly impacted are a lot of the ones along West End,” Riebeling said. “We have large conventions and the hotels along West End are going to be used for that.”
Under Metro’s plan for the convention center, a portion of sales tax revenue generated from establishments inside the zone would be allocated toward convention center funding. Consumers would not pay higher sales tax inside the zone.
Though the approved tourism development zone is smaller, Riebeling said it's denser and will therefore be able to capture more dollars.
“A lot of the area that was in it before was undeveloped property,” he said. “So, we’ve shrunk the size, changed the boundaries but actually picked up more taxpayers currently than what existed before.”
Riebeling said projections of how much tax revenue could be collected from the zone are “all over the board,” but added it will be a “considerable piece of the financing plan.”