Council gets first look at Omni hotel proposal

Friday, September 3, 2010 at 1:30am

Plans for a luxury $250 million Omni hotel that would anchor the new Music City Center were delivered to the Metro Council at a special information session Thursday night.

With a timeline now established, the council is set to digest the specifics of Mayor Karl Dean’s public-private financing plan before voting on an intergovernmental agreement between Metro and Omni Hotels & Resorts in October. Because the council isn’t being asked to sign off on a publicly owned or operated hotel, reviews so far seem positive.

“This is a great project,” said At-large Councilman Jerry Maynard.

Omni officials spent a little more than 30 minutes giving the rundown on the Omni brand as a hotel chain, using words like “authenticity” and “unique” to describe what Nashvillians can expect from the new 800-room hotel that would be built directly south of the Country Music Hall of Fame.

“From an experience standpoint and a design standpoint, we really focus on integrating our hotels into the community, and really trying to have local flavor and local color to be authentic as possible,” Omni President Mike Deitemeyer said. “Our focus is all about individual customer interactions.”

Authenticity in Nashville would likely incorporate a heavy dose of music, with talks still ongoing about physically attaching the new hotel with the planned expansion of the nearby hall of fame. Omni officials also say the hotel would feature restaurants, bars and other street-activity. Final hotel designs are expected by Sept. 30.

“It’s very important for you all to have the feeling that this hotel is part of Nashville,” Mike Garcia, Omni’s chief financial officer, told council members. “We want to feel a part of Nashville as well.”

Reviewing how the Metro-Omni relationship began, Metro Finance Director Richard Riebeling said talks with hotel companies picked up following the council’s 29-9 vote in January to approve financing for the $585 million convention center.

“It sort of sent the message out to the hotel community that this project was real,” Riebeling said. “We started to see a number of inquiries.”

In the end, what sold the administration was Omni’s willingness to step up and cover $250 million in construction and development costs up front.

“As we whittled the potential players down, it was clear that only Omni was willing to essentially take all financial contingencies off the table,” Riebeling said.

At the request of Councilwoman Emily Evans, Riebeling said he would hand the council a list of all hotel companies that Metro negotiated with before Omni was chosen.

While the mayor’s hotel plan would benefit from private investment on the front end, there’s also a significant public component as well.

Over the course of 20 years, Omni would collect $103 million in tourism tax revenues generated by the new hotel. Omni would also receive a 62.5 percent property tax reduction and take in $25 million through tax-increment financing.
 

5 Comments on this post:

By: titm on 9/3/10 at 7:02

The City has no business spending one dime of tax payer money for this hotel or convention center. If these businesses think its such a profitable idea, let them foot the bill and reep the benifits. Its called business.

Just working for a living with honesty and integrity.

By: producer2 on 9/3/10 at 8:03

titm,
The City needs to find ways other than raising your taxes to fund the services the citizens want and need. Do you have a plan or an idea that would help them do this? Doing nothing will certainly not bring in any new revenue. The deal for this hotel will be repaid by taxes generated by the hotel itself. In essence without the hotel there would be no tax revenue generated. The 62.5 number is important as well. The City is protecting the 37.5% of tax revenue that goes directly to support schools in Davidson County. That money will not be touched and will continue to flow into the school fund coffers. The most compelling reason to approve this project is the fact that Omni has agreed to put up 100% of the money needed to build this hotel, thereby eliminating any need for the Citizens of Davidson County to be at risk.

One very important piece of information that was given at yesterday's meeting but was not reported is that in the first year of collections since the MCC was approved the so-called "controversial" HVS report on tax collections was wrong. It was too low!!! The City collected 1 million dollars MORE than the study suggested in the Fiscal year 2009-2010. In the first year they are already ahead of pace, in a bad economy, that everyone said would not work.......

By: NewYorker1 on 9/3/10 at 8:06

I am a tax payer in Davidson County, so they can use my tax dollars for this project. I don't mind.

By: bfra on 9/4/10 at 6:40

Hey Karl (mayor in title only) - Schools are still without needed supplies and you just keep spending tax money on your ego pipe dreams. Goes to show you snub your nose at our children and their education.

By: MusicCity615 on 9/6/10 at 10:36

Producer2 please call in to the City Paper and the Tennessean so that revenue report is published!!