Proposed convention center price drops $50 million

Thursday, November 12, 2009 at 10:21am
Music-City-Center.jpg

Projected costs for Nashville’s proposed convention center are now $585 million, down from the $635 million budget the Mayor’s Office previously expected.

At the request of Mayor Karl Dean, project leaders have updated the dollar figure attached to the proposed Music City Center, lowering it by $50 million, which they attribute to the current state of the construction market.

“We can make these (numbers) work,” Larry Atema, senior project manager at the Metro Finance Office, told the 10-member Convention Center Authority this morning. “We have tested and stressed these numbers enough to know that it’s a very valid projection.”

Of the total budget figure, $415 million is devoted to the actual building and attached parking facility, a $35 million reduction from the $450 million originally budgeted. Remaining dollars will go toward relocating the Nashville Electric Service substation and administrative services, among other costs.

“Probably the big one is just the state of the construction markets and economy right now,” Atema said of the project price tag reduction. “There’s not a contractor in this town who’s not hurt right now. They’re not getting a lot of work, and they’ve probably laid off a lot of people.

Atema said project leaders also looked at about 100 different construction items and asked, “Is there a better, cheaper, different way we could approach that?

“We took out a lot of money through value engineering, which is pretty standard in a large construction project,” he said.

Metro Finance Director Richard Riebeling said he expects the convention center’s financing plan to be released to the Metro Council in early December. A hotel, estimated at $300 million, may or may not be part of the final project.

“Mayor Dean has said, ‘We’re not going to do a hotel deal just to do a hotel deal,’ ” Riebeling said.

Project leaders say the construction component of the convention center will require 1,000 to 1,200 workers on site each day, while employing more than 3,000 workers overall.

25 Comments on this post:

By: MusicCity615 on 11/12/09 at 12:36

The price DROPS 50 Million??? How is that possible? Maybe everything producer2, airvols, and myself have been saying about building during times of low construction costs is true!

Panda bear where are you? Didn't you say "635 million, it'll be double that?"

By: CityProgress on 11/12/09 at 1:31

A 585 million dollar mistake isn't as bad as a 635 million dollar one.

Whatever happened to recouping the money we lost from overpaying PR firms to post their expensive opinions on message boards, illegally lobby officials, and lie about the MCC's details?

The MCC coalition predicts the new center will generate 196, 700 annual hotel guests after a 5 year stabilization. The current convention center generated 170,000 hotel guests back in 2003.
Even if their crystal ball could be trusted, its not enough improvement to justify the spending. MCC's predictions were based on the assumption that a giant hotel is part of the deal, which looks questionable now, further deflating their hot air logic.

By: Kosh III on 11/12/09 at 2:17

"Whatever happened to recouping the money we lost from overpaying PR firms to post their expensive opinions on message boards, illegally lobby officials, and lie about the MCC's details?"

They are part of the city power structure and this was just a bump in the road to them. Justice is only for those without power or high priced lawyers.

By: nvestnbna on 11/12/09 at 2:41

Anyone want to bet that money was found "before" they announced the $645m price estimate last year? Or, before the Mayor asked the development team to "find" $50 in savings amonth ago? Mission accomplished regardless.

The original estimate was $400 something million so we're down(?) to $100m over that.

I do think they have an excellent construction group (Bell) working with them on this. We'll see what the final numbers are.

By: Floyd2 on 11/12/09 at 3:10

So, CityProgress, how long did Heywood Sanders coach you before you memorized his talking points? Did Gaylord pay for you lunch during the training sesssions?

This is the perfect time to build a new convention center. Costs are low. Business is on the upswing. Let's take the next step toward making Nashville a great city.

By: Kosh III on 11/12/09 at 4:14

We are ALREADY a great city.

By: producer2 on 11/12/09 at 4:16

good catch Floyd2, I have not seen this moniker before now and he does have that stench of Sanders all over him. I am not sure what calculator he is using but to date and without any facility to even call home, the CVB has booked 275,000 room nights with each group averaging 6000 attendees. If I do my math correctly and just allow for an avg. of 7000 per week (2 events per week) that is 364,000. I believe the number given for the new hotel was more conservative at 300,000. That is people not room nights so you do that math.....

By: airvols on 11/12/09 at 4:18

Many very good points made in here today. This will also help us as a stimulus project for the city. If you can't see the possibilities for this venue, and what is building around the project you really haven't done your homework. Nashville is about to become a major player for the type business that creates lots of dollars for the city. Build this now and save on construction cost, build this now have it ready when the recovery is in full swing,build this now and watch the area boom!

By: idgaf on 11/12/09 at 5:24

R E C A L L

By: CityProgress on 11/13/09 at 2:49

Yeah , Floyd, you got me. That free lunch was delicious. How was your Dave Cooley kool-aide?

Producer, I'd tell you what your hard-sell smells like, but I've noticed you're sensitive... rhymes with shull bit.

You good ol boys are doin a heck-of-a-job. Nothing like having a dog in the race to keep ya on yer toes, right?

Seriously, that's the best you got? Every opponent is paid by Gaylord, eh? Wrong. I'm a lifelong Nashvillian who doesn't want to see the biggest opportunity in our history to do something great for our city squandered on corporate welfare.

Prod, what kind of incentives/discounts were used to book those rooms and over how many years are they spread out? Want to respond to the fact that hundreds of thousands of tax dollars were illegally spent to lobby the public and officials?

By: producer2 on 11/13/09 at 8:37

CP,
Explain how I am going to get rich off the MCC?
First and foremost the money spent so far by MDHA comes from the additional HOT fund put into law by both the State legislature and Metro Council. It states that these funds (collected on additional fees generated by hotel room nights) cannot be used for any other purpose. So explain how this is taxpayer money? And for the record you can't lobby the public, they are not in a position of influence. Get your rhetoric straight, didn't Heywood teach you all anything?
As far as incentives, you would have to ask your council members that question as I understand most of them have seen the info. Word on the street has it that some groups were given 2009 pricing for future years so I doubt that you will find any wholesale giveaways going on. That would not make much sense now does it?
Do you really think that those involved want to see this project fail? Why would they even begin to put it into financial jeopardy? Just so they can win an argument... your going to have to do better than saying we are all crooks and looking to line our pockets because that argument just does not hold water.

By: govskeptic on 11/13/09 at 9:12

Most of the savings comes from changes made in
the design NOT Construction savings. While I
agree with all the unemployment the day laborers
will be paid less than normal, contractor profits
will remain the same as they are already selected
and do not have to change their margins because
of any competition. This reduction is shown to
encourage unbiased supporters like producer2
and the council to get on with it now.

If we have to add 100 million at the end it's
just because that's the way government
estimating has always been! "Truth in
lending" needs "Truth in government estimating
added to the clause"!

By: producer2 on 11/13/09 at 11:51

since when did construction materials become design and not construction? They are doing their jobs, finding ways to cut costs and all some of you want to do is complain. Guess that is all some of you want to do anyway so it would not matter what the subject as long as you can complain about it. Must be fun being you....

By: pandabear on 11/13/09 at 12:29

" By: MusicCity615 on 11/12/09 at 11:36

The price DROPS 50 Million??? How is that possible? Maybe everything producer2, airvols, and myself have been saying about building during times of low construction costs is true!

Panda bear where are you? Didn't you say "635 million, it'll be double that?"

I'm right here.

If you think putting breathe behind words makes them so,
then that's why you're blown by any wind.

Cost overruns are part of any construction game, especially one
as vicious as this one. It only shows that no lie will be left unspoken
in order to gain your objectives.

In your haste to obtain your goal, which can only be to feed off the ignorance
of others, you've completely forgotten about the inflation monster that's
hovering right on the edge of this recession.

I not only stand by "double $635,000,000", I'll also add that the
$300,000,000 on top of that for the "hotel" (which no private industry is jumping
in to pay to build) will also double and that the coming inflation will
make both of them operate at half capacity for years to come
...with the month bill still going to the local taxpayer and the builders
and land dealers long gone with the money.

Aren't you happy you challenged me for a reply ?

By: MusicCity615 on 11/13/09 at 12:51

I'm very happy Panda Bear. The price tag has dropped by 50 million. You can use as many scare tactics as you want, inflation, price overruns, whatever you want... But all that leads to is me saying "we'll agree to disagree". No one is going to win the argument until the Music City Center is built and paid for. Until then, the price has dropped 50 million. Wanna argue about something else? I'll be waiting.

Producer2: 1 point
CityProgress: 0 points

By: CityProgress on 11/13/09 at 12:54

Anybody read the Tennessean articles on Nashville's World Cup bid?

It's obviously just a racket for promoting the MCC, as Ellen Lefield is the paper's publisher AND chairman of the Convention & Visitors Bureau. MCC backers have been claiming the World Cup bid's only hope of success is if we have a new center.

However, those articles failed to mention that point this time around.
Guess what was mentioned as a major deterrent to Nashville winning the bid?
We have sub par public transportation.

“Money dedicated to a long-term project such as the convention center is necessarily unavailable for other projects that might also provide lasting value,” says Dr. Bill Fox, UT Business Center Director and lead author of a 2006 UT report on the subject.

Prod, you are a liar. Rules can be rewritten. Tourist taxes currently pay for many things in this town such police overtime, The Country Music Hall of Fame, The Adventure Science Center, The Sommet Center, the MTA, and a dozen other very important programs.
The tourist tax increase relegated to pay for the new center CAN be redirected to other projects if the public wants it to, and they do, judging by polls Channel 4 News conducted on their website.

By: producer2 on 11/13/09 at 2:17

Yes, they do CP but not the specific fund set up to fund the MCC. That $2 per room night, 1 cent of HOT tax and the tax on rental cars is separate from all the other tourism funds that pay for many of your public facilities. That's right, MTA, Farmers Market, Science Adventure Center, Sommet Center, and the list goes on are all supported currently by a portion of the HOT tax. That is a totally separate fund from the MCC at this point so the money currently that was allocated to MDHA by the Metro Council IS NOT available for anything else.

I also find it amusing that you know want to blame the publisher of the local paper for running some actual news about potential progress for our City. Do you hate Nashville so much that you don't want success so you can prove a point? We will be chosen as one of the final 18 cities, you can mark it down.....

By: pandabear on 11/13/09 at 2:19

" By: MusicCity615 on 11/13/09 at 11:51

I'm very happy Panda Bear. The price tag has dropped by 50 million. You can use as many scare tactics as you want, inflation, price overruns, whatever you want... But all that leads to is me saying "we'll agree to disagree". No one is going to win the argument until the Music City Center is built and paid for. Until then, the price has dropped 50 million. Wanna argue about something else? I'll be waiting.

Producer2: 1 point
CityProgress: 0 points"

I'm sure you're happy as long as it gets built.

How about we let the taxpayers of Nashville vote on it ?

By: producer2 on 11/13/09 at 2:33

you are through your council members. that is a close as you are going to get....

By: Time for Truth on 11/13/09 at 7:50

This is more smoke and mirrors from Deano who needs Beano. Deano sounds more like a used car salesman every day- 'if my manager can drop the price of this Hummer another thousand bucks, will you buy today?'

Since the economy will likely improve this year, those numbers will start heading back up once the point of no return is made official by the sheep on Metro Council. Again, we are building bigger for a share of a pie that is rapidly shrinking. Those who jump in now, including Nashville, will get bit. We are also squandering an opportunity to do something worthwhile with this property. We'll hear from the three cheerleaders that those properties look like crap now, but that is in part due to the limbo they have been put in by the threat of the coming albatross.

Also watch the numbers start rising as a result of litigation surrounding the minority contractor flap and the landowners who don't want to sell. Maybe those landowners will be silenced, but it won't be free. Greyhound may not have deep pockets, but they are likely deeper than Metro's.

prod, you can bet councilpersons at the forefront of this folly will be going home next election cycle. Sadly you are probably right that that is all we will get- a hollow revenge on the foolish and spineless councilpersons who will have already made this huge mistake.

I don't see Gaylord being against this project as long as they get their 80 mil hush money on the public dime. So anyone opposed to building the MCC, which could be about 80 percent of the taxpaying citizens according to the only available polling info, won't be getting any free food from them.

By: Time for Truth on 11/13/09 at 7:59

prod, the City Paper reported that Adventure Science Center, the current center (at 450 thousand), the Symphony and other venues will be LOSING 14 million in support from tourist taxes as a result of the MCC getting the money instead. So either you are lying or the City Paper printed incorrect information.

And Nashville area businesses (including me) are already paying the tax every time they need a hotel room, rental car, or business related meal. That is the tip of the iceberg compared to what we will all be hung with when this thing becomes a massive flop and a burden on all taxpayers.

By: CityProgress on 11/13/09 at 11:04

Hey Pro Douche, you've got some classic rhetoric, saying I hate Nashville because I disagree with this project.
You're the type that say anti-war people hate America.
Of course I want the World Cup to come here, but not if it means building the MCC.

Pay attention. (1) Our lack of good public transportation is hurting our ability to attract the World Cup. (2) The Tennessean's publisher is chairman of the Convention Visitors Bureau, creating a racketeering agenda. (3) Tourists taxes, nomatter what part, can be used to pay for whatever the Nashville-loving, truth-seeking, honest citizens of this town decide.

It's not too late. Metro is listening. People are speaking out. The Con. Center PR Machine is sputtering like a dying robot. There's some giant cockroaches under this six city block rock, and it's gonna get nastly when the truth comes to light.

Producer, I'm convinced you're incapable of intelligently responding to any of the three points I listed.
Moreso, you dont stand a chance against Time for Truth's comments above.

Time for Truth: 1 Billion
Producer2: negative 1 Billion

By: producer2 on 11/14/09 at 8:52

you guys are strong, I am scared......
Answer one question for me and we can solve this whole puzzle.

What is the motive for the Mayors office or the CVB or anyone else connected with this project to back a project that by your thought process is doomed to fail? Why would they do that, they already have the job, they won't get paid more, it would be a huge black mark on their resumes. So tell me what is the motive? Are they all just not as smart as you?

By: Time for Truth on 11/14/09 at 12:52

Dean could care less about his resume, he was probably making alot more money- at least directly- in the private sector, where he will be returning in two years. The last time I saw him was at a public event where he looked like he'd rather be at home grilling out.

Your answer lies in who will be making all the money from the building of this turkey. If you look back at who supported Mr. Dean in the election, indeed talked him into running, you will find your answer. Remember he was a late entry to the contest backed by the downtown power brokers. They are the ones who want this thing built, damn the consequences.

By: producer2 on 11/15/09 at 10:54

Who are they? To just state it in your terms doesn't tell us anything. It is easy to make bold statements that hold no water, you should know you do it all the time. And you still did not answer question. What do all those involved have to gain? Who backed the Mayor that will make money? Who backed all the candidates (who were in favor a new facility) that will make money? C'mon do tell...