Will there be a convention center hotel and who’ll fund it?

Sunday, November 15, 2009 at 11:45pm

It’s a universal belief among convention center backers: Once the Music City Center is built and thousands upon thousands of people pour into the city, they’ll need a new place to stay.

Proposed is a 1,000-room, $300-million high-rise headquarters hotel, conveniently positioned at the southeast corner of the sprawling SoBro convention center footprint. It’s been touted as a linchpin, an anchor, an absolute necessity to the success of the MCC.

Early indications from Metro government were that the hotel would be built with some form of a public-private partnership. A September presentation by Finance Director Richard Riebeling emphasized that only two convention center hotels in non-gaming cities in the last decade were built solely with private funding.

It looked as though it was a foregone conclusion that the city would have some skin in the hotel game — whether through subsidies or tax-exempt bonding.

But last week Mayor Karl Dean seemed to equivocate on the need for city involvement. He told The City Paper he planned to roll out details on the hotel “around the same time” the administration asked the Metro Council to approve the financing plan for the convention center itself — by early December. But he added he wasn’t “going to force something that would be a mistake.”

“I’ve made a commitment to myself and the city: We’re not going to build something we can’t afford. We’re not going to try to force something we can’t do given the nature of the market,” he said.

Asked to clarify what sounded like a hedge, Dean spokeswoman Janel Lacy said the mayor was simply reiterating the position he’s taken all along. She also said Riebeling’s presentation laid out “what other cities have done” to get a headquarters hotel off the ground and was not an administration endorsement of a public-financing option.

Riebeling, too, equivocates, saying the $300 million project would not necessarily be part of the financing package presented to the Metro Council. “Mayor Dean has said, ‘We’re not going to do a hotel deal just to do a hotel deal,’ ” Riebeling said.

Tennessee Hotel and Lodging Association CEO Walt Baker is among those who say a hotel is vital to the convention center — just as the convention center will be vital to the hotel. He sees public backing of the hotel as a crucial first step.

“Let’s assume the city is the 100 percent owner. That gets us in the game. As the market changes and it starts to perform … it becomes an attractive property [for private investors],” Baker said. “I don’t look at the city being the owner of this for 30 years.”

Baker added that the hypothetical is not the dream scenario — he’s not in favor of a hotel that is totally Metro-ized, so to speak — but, he said, if it works, then why worry?

“Even if we do it that way and the revenues pay for it, who cares? As long as the taxpayers don’t have to pay for it, what’s the problem?” he said.

The key to a successful convention center hotel has little to do with how the construction is bankrolled, he said. It is more important to have it built and ready to open around the same time as the center and to have it “right-sized.”

The opposition points to St. Louis’ convention center hotel as an example of a faltering convention industry. That property was so wildly unsuccessful that’s it’s now in foreclosure just six years after opening. But Baker dismisses the criticism. St. Louis opened its convention center in 1988, with the hotel coming 15 years later. He said St. Louis’ experience is a cautionary tale only in the sense that it argues for building a center and headquarters hotel at the same time.

As if to assuage fears of a government takeover of the hotel industry, Baker suggests a new convention center hotel might actually increase competition.

“There will be other development around this project, private development. There are other companies, and they may eventually build hotels if we are under-supplied,” he said.

So if the hotel will indeed stimulate private development, if it’s a sure-thing success, why not rely on private investment to get it done?

“That’s a complicated question,” Baker said.

And one Mayor Karl Dean soon will have to answer.

49 Comments on this post:

By: idgaf on 11/16/09 at 5:17

This folly has to be put to rest and buried.

By: nvestnbna on 11/16/09 at 7:45

That's not going to happen. Many of the council are being led around by the nose on this. I just wonder if this is just the extension of the inching the council forward bit by bit strategy. First it was the vote to approve "pre-development" lobbying, etc, then buying the land, now funding the the center, ooops can't have a successful center without an anchor hotel and away we go.

Meanwhile, it doesn't appear anyone has a plan for downtown. The tourista's have done nothing for development, I'd characterize their relationship as parasitic. A $30 to $50m NES substation move that does nothing but add cost to the MCC and diminish development to the south(it's not as though anyone involved in this cares about development opportunities in the 100 or so acres on the south side) much the same as they couldn't envision opportunities on Broadway 30 years ago.

By: JeffF on 11/16/09 at 7:50

Someone ask Houston how the sell of their publicly paid for hotel went. They were misled by the same people who said that Houston could sell their hotel to private interests after a few years, make a profit, and be out of the business. Well Houston is still the owner because no private entity wants a 1000 room hotel tied to the faltering convention business and they definitely do not want one already tied down to a brand (Omni in that case) that has along term "management" contract.

The list of cities who have successfully sold their convention hotels as long as the list of convention centers paying their own way. Take away others people's taxes and this industry suddenly has to deal with 10-20 year old buildings instead of new ones popping up like corn fields every year.

By: producer2 on 11/16/09 at 8:54

Really, it never works?

"At Friday's annual meeting of the Dallas Convention & Visitors Bureau, chief executive Phillip Jones has good reason to focus on the future. It looks better than the past.

After several years of eroding convention business, advance bookings are on the rise for the next decade.

Credit the 1,000-room Omni hotel under construction next to the Dallas Convention Center. But don't discount convention organizers wanting to escape the glare of Sin City for more businesslike cities such as Dallas."

How was this funded JeffF?

By: producer2 on 11/16/09 at 8:57

Oh but there is more....

"On the flip side, charts tracking the convention business that has occurred here since 2004-05 show both attendance and room nights generally heading south. That's about to change, Jones said. The $550 million convention center hotel is set to open in early 2012, allowing the bureau to court larger groups that insisted on attached accommodations.

"Now finally, in the last couple of years, the groups that we're going after are larger," he said. "Going forward, what we should see is fewer meetings but larger attendance."

Kind of sounds familiar doesn't it? Like how the avg. size of the groups booked into the MCC is more than double the ones currently coming to the exisiting center. Do that math over 12 months....

By: NewYorker1 on 11/16/09 at 8:57

I say build the dame hotel with tax payer backing and be done with it. If they keep this up, the thing will never get built and don't half-ass do it either. If you are going to build it, then do it right and don't cut corners either. All these critics and analyst have their own opinions, number crunching, and examples from other cities. If this thing is built right in the first place, then I think it can be successful. They need to add features that will attract locals to the convention center like restaurants, shopping, a downtown movie theater, a small music venue, etc.

By: Time for Truth on 11/16/09 at 9:10

Our 10-20 year old building only costs us 450k a year and the MCC will cost closer to 30 mil a year until long past its viability and usefulness. And the current facility seems to work just fine if we are already number 13 or so in that market and about 30th in population among major cities. Jeff is right, we need to stop subsidizing these people.

Dean is saying, "We're not going to build something we can't afford. We're not going to try to force something we can't do given the nature of the market." What on earth does he think he is doing with the center itself?

Another laugher is the contention that a taxpayer-funded hotel will stimulate private development. Among the flaws in that argument is that the best opportunity for private development in that area is the footprint of the center itself. The best stimulus for private development would be to free up the property by not building the center, eliminating the limbo those properties have been in for several years.

By: Time for Truth on 11/16/09 at 9:15

prod, you are parroting people like yourself in your excerpts, cheerleaders predicting a rosy future based on one quarter's sales and waving a banner saying 'don't look at the debt behind the curtain, look at the pretty glass walls'.

By: govskeptic on 11/16/09 at 9:55

The Mayor doesn't want to tell us that the Financial
advisers are giving nothing but bad news about the
present possiblities of financing for the Hotel. So, he will
reject the Council resolution to presenting the financing
of both and instead go with only the MCC. That will help
get the Council to approve 585 million versus 885 million.
They will then come back in about a yr for the additional
300 million. producer2 and all those that are or will be
enriched by this project keep the story line going that
Nashville will be a less city if this is not built.

I strongly suggest it will be a better city if we concentrate
on quality of lfe here versus spending a billion dollars that even if
mildly succesful MCC will help 5% or less of population versus
a much higher percent if spent in a broader and more thoughtful manner!

By: producer2 on 11/16/09 at 10:18

At least I am giving you factual info that can be verified and is relevant to our city. All I get from most of you is assumptions and bad comparisons.

By: nvestnbna on 11/16/09 at 10:26

Another laugher is the contention that a taxpayer-funded hotel will stimulate private development. Among the flaws in that argument is that the best opportunity for private development in that area is the footprint of the center itself. The best stimulus for private development would be to free up the property by not building the center, eliminating the limbo those properties have been in for several years. - Time For Truth

I strongly suggest it will be a better city if we concentrate
on quality of lfe here versus spending a billion dollars that even if
mildly succesful MCC will help 5% or less of population versus
a much higher percent if spent in a broader and more thoughtful manner! - Govskeptic

Two continuously unanswered points - We need someone who has a vision for our city, not just a political campaign slogan. Remember "it's all connected" it's time for someone, anyone to articulate a comprehensive "plan" vision for downtown. This blob will be a case study in what not to do.

By: Dragon on 11/16/09 at 10:27

Hold on a minute. The revenues from the hotel were supposed to be used to pay for the convention center. Now, the say use city money to build the hotel and convention center and the hotel revenues would be "redirected".

Let's build a few stadiums and ballparks. The hotel can pay for those, also.

By: Floyd2 on 11/16/09 at 10:33

Timefortruth simply parrots the tired old tripe of Heywood Sanders, just like all the Gaylord zombies in Nashville's Priorities.

This project has been in the works for 11 years. Nashville has benefitted from seeing the mistakes that other cities have made. We have a strong brand. The center will be in a great location. Nashville will be successful.

As for the area south of Broadway, that is exactly where development will go if we build the Music City Center.

By: JeffF on 11/16/09 at 10:35

Predictions of growth are easy there Producer. Or should I say Mr. 30,000 new jobs? Predictions are aplenty in the industry during the development stage. But as I have so graciously linked to before, when the business of conventions actually start, the predictions are always greater than the results.

Bear in mind that while Dallas is PREDICTING future prosperity other cities like Atlanta have made very brief statements of their losses on going to the year 2013. Those blurbs (uttered with a cough or a hand over the mouth no doubt) are a lot harder to find in the news than the hallelujah chorus coming out of Dallas. PR firms are not hired to help existing facilities already built so any word from them is usually covered accidentally.

Yes the Houston information I gave was factual. City officials abandoned the sell of the hotel once the bids came back lower than what was spent to build it. They were promised by advocates like you Producer that this was a no miss "investment" ad they would be able to sell it at a gain once the money started rolling in (based on the great consultants' promises). Houston lost once the real market came in, Now Baltimore is losing based on those same promises. St. Louis is not the only sucker in this build it because we need it racket. Right now the only winner is Portland where the elected officials finally succumbed to reality and canceled their hotel plans becauase the promises did not jive with the realities.

There are dozens of companies willing to bid on "partner" status on a convention facility as long they limit their own investment to a token amount. There apparently are no companies willing to bet their own money on a Nashville 1,000 room convention hotel.

Dean continues to paint himself in a corner. The hotel financing is not working. The convention center itself needs the hotel to provide a sizable amount of its bond maintenance. Even with that imaginary high sales tax number they were going to be well short of the annual maintenance needs, not even counting the debt inflation for the buffer. Dean has just penciled in the "out" he needs. This will all be mothballed once the land is under MDHA control. The hole in his financing plan gets even bigger without the sales taxes from the hotel. I am stunned that he thought he would get private money for the hotel. These hotels never pay for themselves either. In may cases (including Dallas) these hotels are paid for with the same revenue streams as the convention center. They are already at deficit on the center financing, anything that would draw on that same revenue stream would be a disaster. They can't charge the actual cost to the hotel customers since they will just go somewhere else. There isn't enough meetings in the center to keep the hotel filled so it will have to drop rates to bring other travelers just to cover the fixed expenses, and cannibalize the downtown hotel market. This is not fictional it has played out in St Louis and now in Baltimore. Two cities with previously high average room rates and occupancy levels are now dirt cheap because the government dumped a 1000 rooms on the condensed market without a desire to make a profit.

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

Certainly you can come up with factual numbers for more than one instance of a hotel going into receivership? Oh that's right, there are no more examples so make sure you hang your hat on that one.I would think that it would still be a bit of a stretch to sell any property in todays market, but what about tomorrows market? Do you think it will be doom and gloom forever?And we still have that sticky "predictions" label. Where are your facts that not only did they not meet predictions but the projects were total failures? Reaching 90% or probably even lower in most cases is still a profitable scenario, so give me "this project has failed" links and then we can talk. Ah yes, there is always St. Louis to hang your hat on...

Still the question remains, what is the motive to produce a failed project? Why would the Mayor or the President of the CVB or anyone else for that matter stick their professional necks out if they truly thought this could not work? It would certainly not bode well for future employment and I don't think those folks have reached retirement age or status. You can get your name on a building at a much more reasonable price. Every Mayoral candidate was to some level pro MCC. So are they all just not as smart as some of you?

By: pandabear on 11/16/09 at 12:01

"But last week Mayor Karl Dean seemed to equivocate on the need for city involvement."

This is straight from Wikipedia:

"It is the misleading use of a term with more than one meaning or sense (by glossing over which meaning is intended at a particular time)."

Perfect word to describe the "Deano".

...and this "CEO" idiot Baker says
“I don’t look at the city being the owner of this for 30 years.”
...but he wants the city (you mean US, the taxpayer right ding dong)
to pay for it.

Can you take it with you when you go and it's a secret that only they know about ?
Why would anyone be that greedy ?
I could actual find a logical reason for it if we could take it with us,
but guys, I hate to tell you this, but there's a "cut off" date
comin' that I don't think you'll be able to buy your way out of.

Like Ray Charles said, "There ain't none of us gonna get out alive"

By: pandabear on 11/16/09 at 12:11

"Still the question remains, what is the motive to produce a failed project?"

Money, money and more money.

Or, ....how about money ?

Money for who ?

Everyone who gets theirs up front.

The builders, the land "dealers" (especially those who are
reselling what they bought from the city a few years ago...
Those deals are highly suspect), the lawyers, the "PR Firms"
or "Local good ole boys doing well..."

Convention centers nationwide have been losing money
for over 10 years.

They are losers. That's a fact.

Bottom line :
Put it to a vote by the people who will end up having this debt around their neck
for decades to come.

The taxpayers of Nashville

By: govskeptic on 11/16/09 at 12:33

Although not Nashville, Roanoke, Vg(Very nice City) has just announced their fairly new city owned hotel and convention center needs a new company to run their hotel. Seems that low vacancy and no profits has caused Doubletree Hotels to abandoned their contract after 5 yrs of running said hotel. Is this relevant? Many would say
no, I think it very well might be showing a trend!

By: producer2 on 11/16/09 at 1:20

Let me get this straight, you are saying that corporate and civic leaders are betting their careers for a construction contractor?

This is for JeffF, there are always two sides to every story:

By: Floyd2 on 11/16/09 at 1:45

Looks like JeffF is good ol' Kevin "Moost" Sharp. Here he is throwing out that tired idea that Dean will drop this project after the city has acquired the land. Why? JeffMoost doesn't give us an answer to that puzzler.

On another point, Marriott will run the hotel. They will be in it to make a profit, so dropping the room rates and crashing the downtown market won't be an option.

The MCC opponents also continually bring up St. Louis. That project was totally screwed from conception. The city of St. Louis wasn't even really interested in the convention business. The entire downtown revitalization was a show to get an NFL team to replace the Cardinals. It worked. They built the hotel 15 years after the convention center.

By: airvols on 11/16/09 at 2:23

This is really funny, not an expert in the room and everyone has the answers. The convention center needs to be built. The hotel should be built, but only if the private investment comes through. It seems to me one goes with the other, but if private isn't willing to invest that should be a red flag on the hotel. I just hope the same people that said the Titans would never work in Nashville. (11 sold out stadiums for the season later) are not the same people providing the wisdom in the room. The I don't want to be another Atlanta crowd needs to understand we never will be, we will be much better!

By: blitz on 11/16/09 at 2:33

It's starting to sound like Dean might be seeing the folly of this project. Metro just doesn't have the money or vistors to make this a viable project. It was doomed from the start, but too many people are blinded by the hype & insist on forcing this. Give it up folks. For those of you that were around when the first convention center was proposed - you'll remember the exact same arguments. That project was a total failure as well, but the loses were sure masked in some creative ways. I've had enough of these lame political projects that really only cost the city millions so an elected official can say -> look at me

By: JeffF on 11/16/09 at 2:35

Let me get this right David Floyd, St Louis officials built a hotel to get an NFL team that they already had for 6 years before the hotel even opened? They built a CONVENTION CENTER hotel for the Cardinals team that had been there since 1994? Don't come back until you can work as hard as Producer silly anvil boy. Do you get physically ill when you drive by Opryland Floyd? Do you wear a tin hat to make sure that the evil Gaylord satellites aren't reading your mind? Get back on the lithium you piddly little outclassed meeting planner.

Sorry, Producer back to you, I am confused about the link. It reaffirmed Portland's decision and it was from a source that you discredited when Dr. Heywood uses their published statistics. It is also from a trade journal that has never, ever disagreed with a project that benefited its own subscribers even when the red ink starts flowing.

Speaking of red ink, that is something that is being left out of the debate. With all the revenue streams going to debt repayment, your admittance previously that centers cannot charge what is necessary in a competitive environment (loss leadership), and the centers reliance on the buffer for at least 10 years, where exactly is that operating loss going to come from? Right now you tell us the operating losses are covered by the special revenues (even when the Metro CAFR says otherwise, but lets no go over that again). Now when 130% of that special revenue goes to repay debt, who will pay all of those 30,000 new employees, or even just the less than hundred actual ones? We have all seen the estimates that annual revenues fall short of the estimated bond maintenance without even borrowing the buffer or accruing much interest.

That is why I believe we are just 8 land acquisitions away from mothballing. There is not enough "special revenue" and the mayor knows that the local yokels will raise holy heck if any taxpayer money is dedicated for either building. It is best to let the yokels look at derelict, empty, and fenced in land for a few years rather than risk hearing from them. The financing plan was due over a year ago and the markets have not changed since then. Borrowing costs are too great for high-risk dying industry "investments". The federal government would have to "loan" the entire amount to Nashville or back the bonds themselves, and that looks very unlikely seeing the performance gap between revenues and costs.

By: everloyal on 11/16/09 at 3:02

Maybe it is time to start thinking/working on recalling Mayor Dean as it is obvious that he doesn't have the best interest of the citizens of Nashville/Davidson county as his number one priority. Appears that his number one priority is building the new convention center and all that that entails, i.e., convention center and new hotel which we tax payers will, in the end, be stuck with paying for.

By: JeffF on 11/16/09 at 3:04

Just did a loan simple loan amortization (Kudos to Microsoft Excel templates). A simple loan with a minute 3% interest rate (not seen in several years in the muni industry) would mean an annual payment of $33,162,518.56. This would not include the cost of borrowing the buffer supporters started crowing about a couple of weeks ago. Figure is another 5 million a year for that wonderful and expensive buffer? Also this does not include the hotel and the other facilities that have been left out of the center budget. Also not cost overruns.

Right now they are pulling in what amount again (excluding the tdz and the on campus sales tax which may or may not occur since there is a chance at no hotel) I believe the last figure I read was $17 million? Someone correct me on that please. The consultants reports promises the new facility will make Nashville CAPABLE of hosting 75% of the meetings out there (a common phrase in the consultants reports ) but does not estimate what percentage will actually start coming here (a common omission in these types of reports). The new center would have to pull in $90,856.20 in tax revenue each and every day of the year, no breaks. This is not total growth, this is above and beyond average growth since the center only gets that amount from a limited area. This is also not room rate growth, just the taxes. This also would require a large meeting be booked each and every day. Also the rent they pay would have to cover the operating cost of all facilites. Several thousand people would need to be wondering the streets of downtown for 365 days per year. What convention centers host large out-of-town meetings even half the days of the year. The current one doesn't. This is a number that the weddings, car/boat shows, bar mitsvahs, and Tennessee Society of will not help with. This center must fill all the downtown hotels each day to reach this tax goal and it still would require that many rent cars and skip the catered meals in order to eat and the downtown establishments instead. This really puts that funny estimate of $3000 per person per day to the test since each and every attendee of a 10,000 person meeting would have to spend at least $3000 to earn that $1 million in tax revenue.

By: JeffF on 11/16/09 at 3:11

I should add that they would have to spend that $3,000 per day only on taxed items in the TDZ, the hotel, and the rental car. Any money spent outside of that area would be of no help to the MCC. Times all that by 365 days per year.

This is unless of course the proponents would like to be more upfront an admit that a large portion of this funding on the backs of the locals and the travelers not coming on MCC time. Someone once did say here on these pages that the reason people come to Nashville is because they once came to a convention or was related to someone who once came to a convention. But that was a laughable assertion and probably should not have been repeated. It makes the "Brand" look bad.

When did the "Music City Brand" get hijacked by people wanting a new convention center anyway? They make it sound like the brand would suddenly evaporate and all the honky tonks would close if there was no new center built for THEM. Is that even close to being true? There was a lot of music going on way before the current facilities were built.

By: JeffF on 11/16/09 at 3:16

Next thing you know they will claim the current center revitalized Broadway or something laughable like that. Yes the building facing the wrong way was able to make a dent in the economic climate of the street out back. There are at least a dozen different civic projects that have staked claims to revitalizing downtown. Even proponents of the Church Street Mall, the Landport, and the Library claim to have fixed lower Broad. Personally I think the evictions of all the adult oriented businesses and the historic zoning did that but I will listen to others make a case.

By: NewYorker1 on 11/16/09 at 3:18

Build the bitch.

By: JeffF on 11/16/09 at 3:45

NewYorker your posts are always stellar and succinct. Which I had that skill.

By: producer2 on 11/16/09 at 4:38

don't overheat yourself....I guess this must be a bottle half full, half empty discussion. I read the Portland piece and see a mistake being made by the City and reaffirmed by a couple different sources. The same mistake that was made in cities like St. Louis who did not build a sufficient anchor hotel to help their convention center business for years after the fact. I see a cities like Dallas finally making the correct moves and the business starting to follow. this is not a rocket science question, it is a simple as looking at the past and seeing what has worked and what has not. What makes it trickier is the current economic climate not what the proper thing to do is. You should warm up your calculator because you are going to get your chance to make more false assumptions in the very near future. The real information will soon be forththcoming...stay tuned Kevin....er Jeff

By: producer2 on 11/16/09 at 4:41

Never did get you to answer the question I have posed for weeks. What is the motive to propose, develop, and build a failing facility? What is the motive JeffF?

By: airvols on 11/16/09 at 4:49

Money ! Producer2, the motive for everything, including your opposition.

By: producer2 on 11/16/09 at 4:56

I know Airvols, that is always their answer but who is going to make all this money individually? And how do I sign up?

By: govskeptic on 11/16/09 at 9:14

producer we know you've been signed up from the very
beginning. No post in any publication has mentioned the
MCC without your keyboard on standby to answer any
objections to it's being completed. yes, in a billion dollar
project there's alot of money to spread around in many
directions. It's certainly not all going into glass and concrete.
Let's not forget the operating and personnel cost to run said
acreage of glass and concrete.

By: idgaf on 11/16/09 at 10:32

airvols, the Tits are making money but its costing us 22 milion plus a year.

By: producer2 on 11/17/09 at 7:46

Still did not answer the question of who benefits monetarily or why would anyone put their career on the line. those who operate the current center would operate this one and they too already have a job. Why would anyone risk what they have unless they truly believe it will be successful? Inquiring minds want to know.

By: Time for Truth on 11/17/09 at 8:32

prod, I answered this in a prior column shortly after you posed it. Dean was recruited by the downtown power elite to run for mayor. They likely wanted to make sure they had 'their guy' in there to accomplish their short list. The convention center, because it isn't needed and is expensive, had little traction and there was no guarantee that, say, a Howard Gentry wouldn't see the writing on the wall and step away from it after he took office. So they bankrolled Dean's campaign and now he is doing what he was tasked with from the outset, get this done so that banks, developers, landowners, and lawyers would all make a fast buck and restaurants and hotels may make a little as icing on the cake after the project is completed. Dean could care less about a second term, which is good, since he won't get one. I'll be surprised if he even runs again.

By: producer2 on 11/17/09 at 10:53

What total BS. First you say that no banks will loan money to this project and then in the next sentence you say they are the ones getting rich. What developers are getting rich? Heck Tower Investments which owns the biggest chunk of land is trying to sue MDHA because they are making NO MONEY! Lawyers always make money on both sides of the fence and the restaurants and hotels are going to make more money but I don't think that Jack's or Tootsies has that kind of power to "bankroll" the office of Mayor . I think there were a few more votes cast than just the "downtown power elite" as you like to call "them." That argument holds no water and you know it, but as a fiction novel it has a chance....

By: CityProgress on 11/17/09 at 11:25

This is from a The Wall Street Journal article about the "futility of using eminent domain as corporate welfare" :

"If there is a lesson from Connecticut's misfortune, it is that economic development that relies on the strong arm of government will never be the kind to create sustainable growth."


By: producer2 on 11/17/09 at 1:21

That is kind of like the St. Louis hotel scenario. You guys have one story for each issue and they are both overused. It's a big world out there, try and think on a larger scale.

By: CityProgress on 11/17/09 at 2:06

1. 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.
2. "Last year (2008) a survey of 1,800 Nashvillians found that public transportation was their most prominent concern.... Bredesen recently signed an act enabling communities to create dedicated funding sources for local transit systems. Common revenue sources usually consist of taxes on vehicle registration, (***)hotel rooms, or rental cars.(***)" nashvillecitypaper.com/content/city-news/nashvilles-brt-lite-alternative-alternative-transportation
3. Nashville is number 1 in the country for air pollution from vehicles, third for the most miles driven, per capita, among large cities, and received an "F" grade from the American Lung Association for its air quality, according to a 2004 report by Public Interest Research group. Nashville has the 6th worst carbon footprint in the country. Nashville has the highest incidents of respiratory infections, and is the third most expensive city in the country for driving, according to a 2005 study by Sperling's Best Places.
4. “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.

By: producer2 on 11/17/09 at 2:59

So? Does any of this mean the MCC will not be profitable? (by the way, the City Paper reports a lot of things, some come true, some don't, the number is way less than 14 million)
#1 and #2 those taxes will remain in place as will the exact same percentage of funds from the HOT tax that already goes into the General Fund. What will be lost is the recently found money that used to pay for the current Convention Center but when the loan was PAID OFF EARLY, that revenue stream was alloted to something else.
#3 Are you really going to blame air pollution on the MCC?
#4 Dumb statement... Money used for the MCC will be generated by the MCC. So no MCC no money generated. Pretty simple equation...

What else you got?

By: JeffF on 11/17/09 at 5:16

Producer, so St Louis made a mistake by building the hotel after the convention facility but Dallas did not make a mistake by building the hotel after the convention center? So St Louis is a bad example because it was a mistake to wait but Dallas is a good example because they made the same mistake????

This is what makes a bad example for CC proponents in every city, including the me too ones like Nashville. Those cities with historic and verifiable track records of missing promises, expectations, and debt payments. The ones that are good examples for the folk: those like Dallas with no history just projections. Once they turn south they will shuffled into the bad example column. Baltimore was in the good example colum, but now they they are experiencing losses on a scale they never imagined, they are a bad example.

Here are the people who will benefit: the 6 or 7 posters sitting at keyboards looking at multiple sites ready to jump on any negative blurb about the MCC. They are easily identifiable as the ones who do not appear on any news items not related to MCC and still are of great importance. They are mentioned in the CVB meetings brochure as recommended vendors. They are the ones that will get paid even while the whole thing sits in red ink. They are the ones without actual skin in the deal since they for the most part do not live in one of the actual Nashville neighborhoods left out of the downtown centric capital spending spree. They are the one who kid themselves into believing that a great city is one with a downtown built and paid for with taxes with few other necessities built outside the wall. They are the ones that will make nothing if a convention center was built and run by and as a business.

By: CityProgress on 11/17/09 at 9:05

Prod, it's obvious you're feigning ignorance.
What a shame. So much for thoughtful debate. Playing dumb can't help your cause.

Humor me: Why would UT's business center director, Dr. Bill Fox make a "dumb statement" about Nashville missing opportunites to fund projects of lasting value?
Are you smarter than him?
You say "Money used for the MCC will be generated by the MCC. So no MCC no money generated. Pretty simple equation..." Simply a lie.
Surely I don't need to spell it out for you.
Oh well, the MCC hogs resources we could spend on better public transportation and other projects to remedy the problems I listed.
Didn't Goldman Sachs latest info say the MCC wouldn't break even for over 50 years? The MCC's drain on tourist taxes from other facilities isn't 14 million? How many millions will it be?

By: Time for Truth on 11/17/09 at 11:45

"money used for the MCC will be generated by the MCC" -prod

The inverse is more accurate, money generated by the MCC will be used for the MCC.

And much more money than that will be needed too.

"Does any of this mean the MCC will not be profitable?" -prod

Endless evidence from Jeff and others has been provided showing that the MCC is a potentially huge money loser. That is even if the Convention business DOESN'T continue to fade away, the economy comes back right after the opening ceremonies, and they don't run into the sort of snags and overruns that are already happening. Prod knows this is a money loser for Nashville. It is a money winner for those who build it, those who book it, and those who run tourist venues near it (the nudie bars will clean up!) . I have seen no evidence, including from prod, that this thing will actually make money, which by definition means it brings more money in than what it costs to build it, pay it off, and run it.

By: producer2 on 11/18/09 at 7:52

Let's see the score:

JeffF...no answer still (folks in the CVB brochure pay for that privilege with or without the MCC) 6 or 7 posters sitting at keyboards...ummmm look in the mirror dude.

CityProgress... still doesn't get it. The tourism and Convention industry create the taxes (see addl. HOT tax) that pay for their facilities. (see current convention center) Can't make it any more plain for you than that....

TFT... again with all your suppositions, try using some factual history (again see current Nashville Convention Center) So know you want to bring in the nudie bar card. Whats the matter running out of other scare tactics

You guys are pathetic, you can't give an answer to an easy question...Why because there is no answer and it kills you. All those who work for the CVB, they don't need this new facility to validate their jobs, they already have them and do a great job. The Mayor, well he has the job too as do the Council members and hotel GM's and sales staffs and production companies and restaurant owners, and the list goes on. We all have jobs and we will still have them no matter what, so I ask you again. What is the motive to build the MCC if you don't believe it will be a good thing for the City. I am not going to get any richer, neither will the staff at the CVB, or the Mayor or apparently the biggest developer Tower Investments, none of us individually will... BUT as a community and a City we will ALL profit from this, just like we do currently but in a larger way.

By: CityProgress on 11/18/09 at 11:13

Here's some recontextualizing, Pro Douche, for your viewing pleasure:
"...no answer still... still doesn't get it... again with all your suppositions, try using some factual history...You... are pathetic, you can't give an answer to an easy question...Why because there is no answer and it kills you... ummmm LOOK IN THE MIRROR dude..."

Let's try this again, even if at this point, it's like debating malfuctioning robot.

When Nashville Convention Center was constructed in 1985, major funding (about 20% of the required $50 million) came from a federal Urban Development Action Grant. Private investors paid all costs to construct and operate the headquarters hotel.
SOURCE: Metro Nashville Internal Audit.

You haven't answered a single question anyone asked or address any of our points.

By: producer2 on 11/18/09 at 11:48

You actually have to make a point first or at least ask a question. So a portion of the funding in 1985 came from a Urban Development grant. So what? We have not seen the financial package from the Mayors office yet so what are you comparing? And what is your question? Are we comparing 1985 economics to 2009 economics? And really the name calling thing is so sophomoric.

By: CityProgress on 11/18/09 at 2:09

"You actually have to make a point first or at least ask a question." - Prod

Never failing to surprise, or at this point, amuse, we've reached another low.

The possibility that you truly are unaware of the questions and statements made which you refuse to address is small enough to merit hiring multiple high dollar consultants.

1985's funding plan applied to the new CC would make it $468 million with a privately financed hotel, which you know is nothing close to what we can expect from the finance package.

Prod, your style of retort is sub quid pro quo, with an arrogance so finely tuned, backed up only by an instinct to self preserve at any cost. As an ambassador to your industry, you and your ilk are not making friends with the community you claim to serve, while parasitically syphoning our resources.

"They are the ones that will make nothing if a convention center was built and run by and as a business." - Jeff