Music City Center land acquisition costs will climb

Tuesday, May 26, 2009 at 11:30pm

Even if Council allocates $75 million for convention center land acquisition next week, Metro government still won’t have all the property it needs to make the project work.

The land acquisition bill, which will be before Council on third and final reading, would give the Metro Development and Housing Agency $75 million and condemnation powers to start buying land where the proposed new convention center would go.

But the legislation does not cover land needed for the extension of Korean Veterans Boulevard, which will act as a service road to the proposed $635 million Music City Center.

That road extension project will cost an estimated $23 million, according to an e-mail from MDHA Director Phil Ryan. The KVB extension would be funded with 20 percent local dollars, according to Ryan’s e-mail, leaving Metro with a projected bill of about $4.6 million.

Metro must also purchase land for the proposed public/private hotel, which will be attached to the Music City Center project. The parking lot behind the Country Music Hall of Fame in SoBro is the proposed site for the hotel.

Additionally, Metro must purchase land to house the new Nashville Electric Service substation, which would be moved from its current site in the convention center footprint. MDHA said Tuesday the land purchase for the new substation site would cost about $1 million, but the funds are included in the $75 million Council could approve next week.

District 6 Councilman Mike Jameson was unhappy with the news that Metro still wouldn’t have all the land it needed even if Council approves the land acquisition bill next week.

Jameson pointed out the fact that a final application for the Metro-approved Tourism Development Zone still has not been submitted to the state Department of Finance and Administration. Jameson was also concerned that Metro would be giving up an unknown amount of local option sales tax, which would go to public schools, but instead will be collected to pay back debt on the convention center.

“It's a little disconcerting to hear we may be asked to do this again soon,” Jameson said. “It was bad enough to learn that we don't have a TDZ in place, and that there's no finalized Master Development Plan, and that education funds aren't necessarily spared. And now this. There's only so much we can do on blind faith.”

The TDZ allows Metro to collect all the additional sales tax revenue within the zone, which comes in above the baseline year. The TDZ map was approved earlier this year.

The $75 million for land acquisition would come exclusively from tourism-related taxes and fees approved by Council last year.

MDHA spokesman Joe Cain pointed out the KVB extension is a Public Works project, which has been coming down the pipeline for some time. Critics say the project is nothing more than a service road for the convention center.

 

14 Comments on this post:

By: Dragon on 5/27/09 at 7:58

Geez, what did you expect for a measly $75 million?

And, what about the Country Music Hall of Fame? Will they lose their parking to eminent domain? Maybe Joy Ford has some advise.

By: JeffF on 5/27/09 at 8:08

he he he

Thinking about this entire "project" last night I figured out the curious timeline. After all the necessary property acquisitions are approved, the convention center itself will be deferred "due to economic circumstances". Supporters know that the current market will not be buying revenue bonds at the necessary rates to make any of this work. They also know they do not want general obligation bonds based on the resistance coming out from some elected officials (a few elected officials feeling uncomfortable equals thousands of citizens not wanting this). They know that a general obligation bond vote will not go their way.

So the plan now is to plant the flag and buy the land then wait out the storm. Buying the land forever removes its from the plans of others. Unless of course someone asks the state to change the enabling legislation. If they do not get that huge swath of land, then they risk it being used for public good or for commercial success, and they cannot have that happen because it makes their forever needy industry look bad.

The mayor and his friends at McNeely, Piggott & Fox will spin the delay as a prudent policy and make us all try to forget the $75 million dollars in property no longer earning property tax or sales tax.

The financing plan was supposed to be out in the spring was it not? The people in the know are aware that revenue bonds need to be paying less than 5%. It isn't even remotely close to that right now. There are two dozen other cities waiting for the market to "unfreeze" so they can do their centers, center expansions, and convention hotels. St Louis did not do any of them any favors by defaulting on their convention related revenue bonds.

It would be great if the council knew of the freeze before the third vote. Why go into debt for something not being built yet? Bank the money, earn interest, be a cash customer.

By: idgaf on 5/27/09 at 8:33

There is no way they are going to get revenue bonds so why should they be confiscating peoples property and our tax base now?

It dosn't make sense unless they have decided already to slip it to us AGAIN.

By: nashbeck on 5/27/09 at 12:20

Bottom line, Nashville has a 120,000 foot convention center. That is WAY too small for a city our size. We need a new convention center, and I applaud Karl Dean for taking the lead. Build the Music City Center!

By: JeffF on 5/27/09 at 1:03

Who decided that 120,000 square feet was too small a city our size? That's right the meeting planners needing government to prop up their pathetic itty-bitty dying industry. Sure wouldn't want to look bad in front of the other cities who are losing their shirts in the overbuilt market. They might think we have sense. We sure can't have people thinking we actually looked at actual facts and made a wise decision now can we. If we don't build then the tourons in other cities might not be able to extort a center out of their own governments.

Here is a list of other items way to small for a city our size:
public transit
schools spending (excluding central office)
public healthcare (indigent care)
courts
infrastructure not in downtown
public post secondary education
stormwater treatment facilities
severe weather notification systems
intelligent transportation systems
...

So instead of solving all the ACTUAL problems government is responsible for, we should correct the travesty of having a convention center of only 120,000 square feet??!!

Whats the problem is the other 200,00 square feet available at Opryland and the tens of thousands of square feet at private hotels the wrong color? Or is the problem simply that it is not downtown and run/controlled by the meeting planners themselves. Are those mean people at Gaylord too stingy to share their private capital project with the hotel and bar owners in downtown?

By: nashbeck on 5/27/09 at 1:15

Who decided that 120,000 square feet was too small? OUR MAYOR! The man elected to make these decisions. Karl Dean is doing what he needs to do and that is to make Nashville the best city it can be. He is our elected official, not me, not you. 33 council members also say that our convention center is too small. If "every other city" is thinking Nashville has sense because we haven't built a bigger convention center yet, why is it that more cities (san antonio, seattle) are expanding theirs?

And you very well know that Opryland and the MCC attract two completely different conventions.

By: JeffF on 5/27/09 at 1:34

I thought we were expnding ours because we were behind in the arms race with SA. BTW Seattle is not expanding because the elected officials asked for legitimate numbers, not those from the same consultant Nashville's tourism overlords hired. Seattle slum lords, eh meeting planners said 50,000 new jobs so the state told them to guarantee that number. the Planners asked the governor to veto their own funding just so as not to have to back up their promises.

You do realize you are being used to get a still bigger/newer/stronger center in Memphis? God help us all if we were to fall behind in the race for the biggest, newest boondoggle.

Don't forget to go out and hear Dr. Sanders bomb all the arguments that have been hashed in Nashville like they were all correct and never used in other cities.

By: JeffF on 5/27/09 at 2:25

Please defer the third vote until we have all the information about the center. There are stories like this every other week. It is obvious either non one knows the complete cost or someone is choosing to hide the complete cost. Don't spend the money until we know for sure if the center is something we can truly afford. Waiting to buy the property will not slow construction down.

By: nashbeck on 5/27/09 at 5:09

Seattle might be asking for more information, but they can do that because their center is larger than ours. I'd love to simply ask Dr. Sanders, I assume he is the man from san antonio, why his own town is not listening to him. I'm sure you'll say the business leaders have done some secretive deals with their mayor or something like that.

Delaying the purchase of the land will delay the project for at least 6 months, and we have a timetable because we already have over 100,000 nights booked (without a final approval for the center).

Keep Nashville in business. Build the Music City Center.

By: blitz on 5/27/09 at 6:53

Sorry folks, but this whole project is about 15 years late. I sure wish we had leadership that had a viable pulse on the insdustry. Please stop the bleeding

By: JeffF on 5/27/09 at 7:55

Personally I do not see how San Antonio's poor decision making can justify making the same poor decision here but you run with it. Also the Seattle center is sized almost exactly to our current one. Because they want to spend even more then even our obscene still secret amoun they had to inflate their Impact number even beyond this one. They promised 50,000 new jobs (franklin) while proponents here ONLY 35,000 (Smyrna).

But hey a Washington state commttee read Sanders and used the information to corner their center proponents. Boo boo for them that state decised to use actual information for once. Maybe Nashville will use all the information as well. Why is the convention center the business of government when no other business cansay the same?

By: Time for Truth on 5/28/09 at 7:14

Even if the '35,000 new jobs' figure is close to being true, let's look at how long those jobs last, what those jobs pay, and who will get those jobs. Looking at those details will not paint a pretty picture. We are talking temporary construction jobs and permanent (until the MCC has to fold its tent in fifteen years or so because it sits empty) low-pay service jobs.

What needs to happen to let citizens vote on this? Council needs to defer the land aquisition vote.

By: Time for Truth on 5/28/09 at 7:16

blitz, the pulse of the industry is slowing and will flatline not long after the MCC completion date. But your basic premise is correct. This is the wrong project at the wrong time.

By: TITAN1 on 5/28/09 at 11:28

Build it and they will come. Keep Nashville moving forward. Thanks to Bud Adams and Phil Bredesen for getting the NFL here and getting us going in the right direction. Man, is it time to tailgate, yet?