Councilman Eric Crafton has proposed a memorializing resolution on tonight’s Metro Council agenda stating the legislative body wants the proposed new downtown convention center to be funded with revenue bonds.
Crafton said the difficult economic times mean it is inappropriate to ask taxpayers to foot the bill for the project, which if a hotel is attached could ultimately reach near $1 billion.
Revenue bonds allow for a project to be financed based on the anticipated revenues from the tourism taxes and sales tax created by the proposed new convention center.
“My thought process was if this is a good deal, then the revenues from the project should be able to pay for the project, not our property taxes,” Crafton said. “So what I’m asking is that the Council go on record and say we can support the convention center but if and only if the revenues from this convention center and associated activities can pay for the construction of the convention center and all the upkeep.”
Crafton said that the market should determine whether the project is a financially sound one by whether the revenue bonds are purchased, or not.
“Make no mistake, this started as a $400 million project and now it’s a $700 million project and if you have a 1,000 room hotel attached, it will reach $1 billion,” Crafton said. “The market should decide whether this is a good project by whether or not they want to purchase the revenue bonds and say the revenue will support the financing.”
Metro Finance Director Richard Riebeling has never suggested the proposed new convention center, still in its predevelopment phase, would be funded with anything other than revenue bonds. Riebeling said it was premature for Council to consider the memorializing resolution before the administration had presented a detailed plan for its financing, which would happen in the coming months.
“I think it’s a little strange for lack of a better word that Council would act on something before they even know what they’re going to act on,” Riebeling said. “It doesn’t make much sense to me why he would want to get this issue out now. We told the Council we were going to come with a plan. It’ll be a detailed plan. When it comes, we’ll present it to Council and they can vote on it.”