Wednesday, April 22, 2009

Nashville Convention Center plan clears first hurdle

Council gives preliminary approval to buy land By Michael Cass • THE TENNESSEAN • April 22, 2009 A critical step in Mayor Karl Dean's downtown convention center plan cleared its first hurdle in stride Tuesday, but a debate in the Metro Council is likely next month. The council unanimously approved a convention center land acquisition bill on the first of three required votes. The bill, now headed to the council's committee system, would allow the Metro Development and Housing Agency to borrow up to $75 million from a group of banks. MDHA would use the money to buy property and relocate businesses in the convention center footprint south of Sommet Center and First Baptist Church. Dean has said it makes sense to start buying the land now and allow more time for the nation's credit markets to thaw, creating a better environment in which to finance the $595 million facility. Treasury Secretary Timothy Geithner told a Congressional panel Tuesday that credit still is not flowing like it should be, The New York Times reported. But some council members have said the city can't buy the land unless it intends to build a convention center there. They've said they're not comfortable making that statement without knowing how Metro would pay for the project. "It's very hard for me to support land acquisition without knowing what the financing package is," Councilman Jason Holleman, who is Mt. Juliet's city attorney, said in an interview. Holleman said he is eager to get legal advice from Metro's bond counsel, Bass, Berry & Sims, as to whether the city would be able to keep collecting convention center revenues to repay its bank debt if it decided not to build the facility. If that would be allowed, he said, he might vote for the land purchases. Metro Finance Director Rich Riebeling said he had not received an opinion from Bass, Berry & Sims. Councilman Eric Crafton said the city would have to pledge some kind of tax dollars to help pay off construction debt in case tourism taxes and fees fall short. Though Dean has promised not to use property tax money, sales tax revenues could be used, and it might be necessary to raise property taxes to replace that money in the general fund, Crafton said. "Either way, taxpayers are on the hook," he said, citing documents submitted to the city by Goldman Sachs, an investment bank advising Dean's administration. But Riebeling said Crafton's comments were "completely erroneous and out of context." "There will be ample time for discussion," he said. "There's been no discussion about using sales tax."

No comments: