Opinion: Nashville’s priorities include MCC

Sunday, January 10, 2010 at 10:45pm
Irwin Fisher

As the Metro Council prepares to vote on a new convention center, it’s time to stop the politically charged theorizing — and accomplish a long-term goal for Nashville. It’s time to get off the soapboxes and see the forest, not the trees. It’s time to ignore the politicized attacks and give voice to the hospitality industry, which provides significant economic benefits to our community.

A new convention center will maximize the potential of Nashville, an internationally known destination, to generate revenues for the benefit of all. We can fund the project with bonds paid back with taxes from visitors. This financing funded our existing convention center 20 years ago — at no cost to Nashvillians.

These are facts. They are being obscured by a special-interest group that has come together at the 11th hour to try to convince us that Nashville has millions of dollars to spend and has chosen to spend it on a convention center instead of other options.

Nashville has many important issues. Mayor Karl Dean is working diligently to address these and doing a great job for our citizens. Unlike other projects, the convention center is self-funded. Our industry will bear the responsibility for the funding by taxing itself. Each year, visitors generate more than $100 million in revenues toward education, public safety and other priorities.

By law, funds from the $2 hotel occupancy tax can only build the Music City Center. Opponents ask: “If you had a billion dollars to spend on Nashville, what would you buy?” implying that the revenue for the convention center can be used for other projects. This is misleading and untrue, first because the project will not cost $1 billion, and secondly because the revenue generated can only be designated for this purpose.

I have been one of many — including members of the Nashville Convention & Visitors Bureau, Chamber of Commerce and three mayoral administrations — who for 11 years have been working to bring a project of this magnitude and importance to fruition.

We have studied what has worked in the past, what we can expect in the future and how all can benefit. Every source used to determine the feasibility of a convention center has returned with a favorable report that we can in fact support this moderately sized center. Meetings keep us afloat even during tough times. Throughout the lean years of the early 1990s, when tourism taxes were down, we never borrowed from the Metro general fund.

The words “convention center” sound huge, but the size of the Music City Center is appropriate. We will attract larger meetings — but will not be mortgaging our future with a center too large for Nashville.

We are a moderately priced, central destination with the enviable Music City brand, which includes our reputation for service and hospitality. We attract music fans, and people who enjoy sports, the arts and culture.

We need to drive our own demand, as have our primary competitors such as San Antonio, Austin and Indianapolis. Today,
we have an antiquated center smaller than Chattanooga and Memphis, which puts us
at a competitive disadvantage.

Ultimately, Nashville will have the best of both worlds. Although we are not a resort destination, we have a world-class resort, Gaylord Opryland. For groups that want to be under one roof, this is a great option. But don’t forget: Gaylord is a private corporation, beholden to stockholders. Many conventions want to be located downtown, giving attendees hotel options and entertainment. Our center is public, beholden to no one, but beneficial to everyone. Money we bring into the city helps pay for schools, sidewalks, our quality of life.

Gaylord has built hotels in very competitive cities, such as Washington, D.C., and Orlando, Fla. Their effort to derail a convention center in our city is frustrating and disappointing. In 1996, Nashville entered a non-compete with Gaylord guaranteeing the convention center would not expand until 2006, while Opryland expanded. While other cities Nashville’s size, such as Indianapolis and Austin, enlarged their centers, Nashville stood in deference to Gaylord. Now that this administration seeks to build a new convention center, Gaylord is funding an opposition campaign out of self-interest.

That’s a shame. There’s room in Nashville for everyone to grow, and we have a unique brand to ensure it will happen.

We have a proven way, in a tough economy, to generate new jobs and revenue that will help achieve a host of Nashville’s priorities. But we must act. It has taken over 10 years to get this far. If we don’t move forward with a convention center now, we will lose the opportunity for at least another decade. Our brand, our city and our citizens will suffer as a result. Building Music City Center is not a leap of faith. It is the next natural step. We need to take it.

Irwin Fisher is a vice president at Loews Hotels and former chairman of the Metro Convention Center Commission.

31 Comments on this post:

By: Kosh III on 1/11/10 at 8:53

If it's such a great deal, why not build it yourself? Surely your wealthy corporation can afford it, after all, as you point out, it's not even a billion dollars.

By: JeffF on 1/11/10 at 9:16

"by taxing itself"

that is an interesting term because they have never ever taxed themselves. They are not cutting into their earnings or revenues, they are passing along a tax to customers. If they were to truly tax themselves this would be a non issue because they would be paying for it themselves.

Make this guy a non liar, pass a special revenue bill that would allow the hotels in Nashville to pay 30-40 percent of net earnings to build the center and buy the land and pay the property taxes. This center is the reason they exist after all because all visitors are here because of the convention center right? Every hotel/motel exists because of the meeting planners so they would all need to put the 30-40 into the pot. The meeting planners will pay nothing because they are too important and because if they had money they would have been putting it up all along.

By: nvestnbna on 1/11/10 at 9:26

Dang Irwin, great until you got to the point of tourism taxes only being able to be used for this one project. You know just as they were earmarked for this project they could be used for others as well through the same process they were designated to the MCC in the beginning, say if the public voted against it and the project was shelved. Tourism taxes all over the country are spent for a variety of civic purposes, and with the numerous other challenges we face, it's not irresponsible to evaluate those.

Second, characterizing the Nashville Priorities group as an arm of Gaylord is false. Sure Gaylord contributed and I'm okay they did because it raised awareness and the level of discourse, but many other concerned citizens did as well. Nashville Priorities, unfortunately, has changed their moniker to be anti-convention center, which infers anti tourism. This is not how they represented themselves at the outset and that's unfortunate, the point is the city is and will continue to be a great city with or without going all in on the tourism business.

By: producer2 on 1/11/10 at 9:59

JeffF,
Yes they are taxing themselves (the hotels) and Irwin is a woman. The revenues being generated by the additional $2 per room and 6% HOT tax could and would be a profit center if not prescribed for this particular purpose. They also spend a great deal of money (putting into the pot as you call it) by either discounting room pricing or putting up cash to pay for portions of the rent on the facility. This is done everywhere so don't try and make it an issue it is not. It is just part of bidding on business. They still turn a profit. You have said you worked for Hyatt in Knoxville and you don;t know these things? Hmmm.

nvestnbna,
Simple question, since tourism consist of three main cogs, meetings, leisure, and business and they are all split equally in terms of revenue generated for the city, how do you propose making up a 33% loss in revenue if this is not supported? You act like the money is in the bank and available to be spent. It must first be made and when it is a portion is given to the General Fund and a portion goes back to investment in bringing folks to town for at least 2 of the three sectors. Folks don't just show up without marketing and facilities.

By: nvestnbna on 1/11/10 at 10:32

replying to P2.

I question your assumption / assertion the city would lose 33% of the revenue from this segment of the business. It is enlightening to know it's only 33% of the tourism business, but I think the current center could continue to be used or use the $2/rm and HOT tax to incentivize private sector development / expansion. Gaylord is here and and providing meeting space facilities(mostly privately funded) they could be incentivized to expand to fill the need.. Why hand over our urban development opportunities to an industry and development team (CVB & CVS) with a poor track record( "no Commerce Street" here and Washington as noted in the other City Paper Story today) of energizing development around their projects? I also question the utilization of the current facility, I'm not sure it's operating at full capacity or even close - remember Butch's much heralded event - - 'the Martin Wedding'?

So, now you can't understand why concerned citizens are questioning adding 50% to the city's debt capacity on a segment(33%) of the tourism business. Please enlighten us all.

By: taxed2much on 1/11/10 at 10:45

The private business sector has spoken by showing no desire to invest in a project like the Music City Center. The citizens of Nashville should be allowed to speak (and be heeded), and the MCC should be scrapped.

taxed2much

By: airvols on 1/11/10 at 10:49

Whine, Whine, Whine, special interest at work here. "build it and they will come"

By: airvols on 1/11/10 at 10:49

Whine, Whine, Whine, special interest at work here. "build it and they will come"

By: JeffF on 1/11/10 at 11:17

What an interesting conceit, the taxes added to the hotel bills would be a profit center to the hotel if they simply did not pass those along. I guess that the retail stores are paying taxes since all that sales tax would be a profit center for them as well? There are a lot of car dealers sitting in jail for viewing the taxes consumers' pay as profit centers. Last I checked those rebates were something you said did not exist to the extent I alleged in a previous posting. If they do they still do not pay for the center, or even pay the true operating costs since this thing will never break even. My guess they are paying for the rebates by cutting their already slave wages even more. Nothing like 1,500 new $8/hour jobs to stimulate the economy or society.

I did not work for the Hyatt, the money for working for large hotels would have put me on food stamps and welfare. I worked in Pigeon Forge closer to my home. Like everyone else there we lived hand-to-mouth anyway because of the abject poverty tourism forces upon the economy and the society. I later worked at a hotel close to the airport as a school time job. Still low pay but it was on the way to and from UT and I knew that this poor excuse of an industry would not hold me hostage forever. It would be my gift to my new home city to keep Nashville free from becoming a tourism town.

Right now tourism/hospitality is a minute part of the overall economy here. Lets keep it that way

By: Anna3 on 1/11/10 at 11:21

It seems that mayor Dean and the "Ms. Fishers" of the world have a solution for all their ills when they have an idea to revitalize their profession and NO ONE else is willing to foot the bill...its called taxpayer financing. It will be a COLD DAY IN HELL before I or ANY organization I support or lead will EVER patronize the Loewes Vanderbilt Plaza Hotel again....with Mr. Tom "I just love illegal immigrants" Negri running things and Ms. irwin "I love to spend other peoples money" Fisher bringing up the rear. Negri doesn't even live in Nashville! Yet they apparently have our Mayors ear on how he must spend our dollars. Memo to Ms. Fisher....$650 Million Dollars for Convention Halls and $350 Million for an anchor hotel EQUALS $1 Billion Dollars! Please go back to school and take a Math Course. Please quit treating those opposed to your ideas as idiots. The only idiot I seem to consistantly encounter on all these risky schemes is Karl Dean. He's the worst Mayor in our history...and that includes Boner!

By: DustyU on 1/11/10 at 11:35

Shame on you Annie! Telling them the truth like that! That's a no-no in this politically correct society we live in now. Howdy P2 and K3. Nves had a good point about the tax dollars being able to be easily redesignated for other purposes.
But like I said before the backroom deals have already been cut and Dean will get this monument to himself.

DustyU.WordPress.Com

By: govskeptic on 1/11/10 at 11:51

Airvols sounds like the kid with a father making minimum wage demanding
a pair of $150.00 Air Jordan shoes. Loews Hotel management is here today
and gone tomorrow. Yes, they are players in the inside game of supporting
any Convention or Tourism project because it means their paycheck. Is
that a long range thinker to base a Billion dollar taxpayer backed decision
on. I think not!

By: JeffF on 1/11/10 at 12:34

$40 million times 30 years equals $1,200,000,000.00. So that is a billion dollars of tax income out the door right there. The NPV is less than that but that is still a billion dollars of future money.

The hotel will simply put this closer to $2 billion.

By: dnewton on 1/11/10 at 12:40

I don't see what is wrong with Gaylord either working or allegedly working against this project. The government has no business being in competition with existing businesses. In fact, I see it as a cost that they should not be bearing in the first place. In Raleigh, North Carolina, the city is giving a million dollar subsidy to a high end restraunt near its convention center. These Convention Centers are like a tar baby. The more you slap and punch them, the harder you get stuck.

The mayor and those who vote for this plan should also tell us which government services will suffer in the event that the taxpayer must rescue this white elephant. It seems like the too-big-to-fail mentality is alive and well in Nashville. I don't think AIG will be writing any insurance policies to cover the possibility of a financial failure here. Maybe the accountants will post a bond in the event that their calculations are wrong?

If this thing was the Cornucopia that the proponents think it is, the State should be tripping all over itself to facilitate it since the state will get more than anyone else in taxes.

By: JeffF on 1/11/10 at 1:14

The consultants would be willing to stake their share in the failed St Louis project they endorsed if they had one. Or if it was worth anything.

By: border collie on 1/11/10 at 1:40

wait a minute anna....worse than BONER??? did you ever have the pleasure of speaking with him in person??? you may re-think that for a second?? LOL!

By: DustyU on 1/11/10 at 1:43

Hi border

By: producer2 on 1/11/10 at 1:48

you guys are funny! Clueless but funny...

By: DustyU on 1/11/10 at 1:50

hi p2 - do you think this actually has a chance of making the profit they are claiming it will?

By: NotDaveCooley on 1/11/10 at 2:11

Two links of use:

The online petition against the MCC:
http://www.gopetition.com/online/32923.html

A blog with some additional points:
http://notdavecooley.blogspot.com/

Enjoy

By: AmyLiorate on 1/11/10 at 3:16

Producer is clueless and to Irwin Fisher - "You LIE"

The project will cost over a billion dollars, unless Loews hotels are loaning the money interest free!

Secondly you act as if this tax comes only from convention goers and it does NOT. The majority of people paying the tax never go in the convention center, not now and not in the future.

Many people paying this tax are just visiting their friends and relatives. That is our families who are paying this.

By: producer2 on 1/11/10 at 3:24

DustyU, yes

Amyliorate,
I wouldn't say clueless since a week from Tuesday this project will be moving forward having been passed by Metro Council. I would say that I differ in my opinion than you do and based upon your responses and lack of understanding of the real issues and facts and statements like this one "Many people paying this tax are just visiting their friends and relatives. That is our families who are paying this." cement my point...

By: DustyU on 1/11/10 at 3:31

P2 - I've done some corporate accounting in the past and the numbers they toss around just don't add up to me.

By: Leazee on 1/11/10 at 3:44

What are you so angry about Ms. Fisher? Why do you, the administration and the rest of the Chamber of Commerce clones need to create enemies out of your opposition. And you wonder why the citizenry feel that this project is being shoved down our throats and why most oppose it? We are tired of being lectured to as if we don't know what is good for Nashville. Ms. Fisher, Nashville is such a 20th century city, run by 50 year-old plus men( and women like you). This group of outdated officials compose our administration, our Chamber leadership and the Convention Center Commission. You all think the same and have the same needs; those being the need for power, money, growth and group-think. "Bigger is better" is your mantra. You mentioned Austin, Tx as a city that we should emulate. Cool city, yes, but struggles with its over-expansion and growth. Have you ever been to Portland, OR? Our mayor says that Nashville is a sustainable city, but he has not a clue what sustainable means. I have spent time in Portland and it IS a sustainable city. It built its convention center in the 90s. Fine for the time, but its leadership will tell you now that convention centers are a thing of the past- soooo 20th century! Large structures, hotels and travel are not necessary for companies to conference. Unnecessary expenses and costly, polluted travel. Grow up Ms. Fisher.

By: DustyU on 1/11/10 at 3:46

Leaz - good points

By: nvestnbna on 1/11/10 at 4:07

I'm not comfortable tarring and feathering anyone and everyone that supports this project. I'm disappointed in the Mayor, in particular, in his lack of vision for SoBro, other than to plop this thing in the middle of it, and waste any other part he has to to do so. Mrs. Fisher has been active in our community for many years, as a volunteer and otherwise, and is not deserving of some of the cheap generalizations being leveled here.

What concerns me is the mismanagement, the sneaky behind the scene plotting, and condescending mentality of some MCC spokespeople. Insults seem to always be the order of the day, and often diminishes any point they are attempting to make. There are notable exceptions, Ron Samuels comes to mind immediately, and I would put Mrs. Fisher along side. I disagree with some of what each has said, but I don't consider their comments sinister or dishonorable in any way. I can't say the same for several of the other high profile promoters.

By: producer2 on 1/11/10 at 4:37

DU,
Specifics please. Anyone can just say, "the numbers don't add up."

By: border collie on 1/11/10 at 5:14

Hi Dusty. Most conferences DO occur on the web and yes the need for a billion dollar convention center is so 20th century. whoever made that comment ....i agree. let's just call this thing Karl 's Kingdom as it should be...

By: Leazee on 1/11/10 at 5:51

I wonder. If Austin, San Antonio and Indianapolis were to revote on their convention centers, would they do it again in 2010? This is a different time than 2002, 3,4 and 5. And when things ultimately get better, I sense that the rules and attitudes will be different. Again, this is why Nashville is so 20th century and I fear for its future if the attitudes of our leadership remain the same. The average age of our city is mid-thirties and we deserve a group of leaders that better reflect our citizenry.
Mr. Samuels and Ms. Fisher are indeed dutiful volunteers because each recognizes what works in Nashville. There is power thru philanthropy. And power and control is so important to our leadership.There are numerous folks who can tell you that it is not comfortable being on the opposite side of an argument with these two. Of course, they maintain a polite decorum because that is what we do in the South. But they stab from the back-never from the front which makes them as vicious as the others. To oppose their views, is to be excluded, ignored and black-balled. They like the other leaders are fearful of change and difference. Nothing is more frightening to these people than not being able to control the issue and outcome.

By: nvestnbna on 1/11/10 at 6:48

Leazee,

We'll have to disagree. Your characterization infers cynicism and dishonesty, both of which are qualities I haven't observed in those two individuals, regardless of their heritage.

By: dnewton on 1/12/10 at 4:09

The reason that the numbers don't add up is that if a project could yield $134 million a year for 20 years, there would be no problem getting financing for it. This is a rate of return of almost 11.5%. The problem is that the money that is claimed is not going all to the same place so that it can return to the lenders.
If it walks like a bailout, talks like a bailout and it smells like a bailout, it is a bailout and I have bailout fatigue.