Friday, January 15, 2010

Convention center moves ahead after heated debate

Nashville Council will vote Tuesday By Michael Cass • THE TENNESSEAN • January 15, 2010 A plan to build a $585 million downtown convention center was overwhelmingly approved by two key Metro Council committees Thursday after almost two hours of tough questions, hard-nosed debate and speeches about the city's future. A proposal to take the issue to the public for a nonbinding referendum was defeated by identical margins, gaining just one vote. The committees' actions sent Mayor Karl Dean's convention center proposal to the full council for a final vote Tuesday. If the council approves, the city will issue municipal bonds to finance construction of the facility, which would be scheduled to open in the first quarter of 2013, more than tripling Nashville's downtown convention space. The joint meeting of the two committees featured several intense exchanges over the tourist revenue projections being used to justify the project. Council members Eric Crafton, Emily Evans and Mike Jameson took consultant Tom Hazinski to task for refusing to say more about the accuracy of his forecasts for other cities, and they questioned the two he did provide. Earlier Thursday, Dean's administration shared scenarios in which visitor revenue shortfalls could force Metro to dip into its general fund to help pay the project's debt. Skeptics say that's quite possible, given that the national supply of convention space exceeds the demand, leaving many convention centers struggling. "This is a decreasing, failing, growing-older-by-the-minute business model," Crafton said. The scenarios, provided by the Goldman Sachs investment bank, which is underwriting the deal, showed Metro would need to take about $36 million from the general fund over a period of eight years if revenues were constantly 25 percent below projections. If the projections were consistently 50 percent off, Metro would need to dip into its revenues every year from 2013 to 2038. Those general fund contributions would exceed $250 million. But Metro Finance Director Rich Riebeling said in a memo to the council that the projections by Hazinski's firm, HVS Consulting, were conservative, using the current economic downturn as a baseline. "Their numbers also do not reflect the impact of a headquarters hotel or the (proposed) Medical Trade Mart," Riebeling wrote. If the projections do prove to be conservative, Metro will have annual surpluses, he said. Jameson also complained that the administration had not produced a plan to come up with about $14 million to help various tourist attractions that have been using hotel/motel tax revenues, which would be applied to the convention center debt. He said Riebeling had promised to do that. Riebeling said the city would "meet those obligations in next year's budget." Councilman Charlie Tygard defended Dean's team, noting that former Mayor Bill Purcell started the practice of using hotel/motel revenues for the tourist attractions. Several council members defended the merits of the convention center, though sometimes with caveats. Councilwoman Megan Barry said she was disappointed that so much of the rhetoric about the convention center had turned on the phrase "I believe," and she said the building shouldn't be viewed as the key to greatness for Nashville. But Barry said she believes the risk the city would take on would be manageable and worthwhile, and the center would meet its "fairly narrow" goal of increasing Nashville's convention and tourism business. Decision for the people Crafton's plan for a referendum was defeated 9-1 by the Budget and Finance Committee and 7-0 by the Convention, Tourism and Public Entertainment Facilities Committee. He argued that voters have a right to weigh in on the biggest project in city history, a point also being made by opposition group Nashville's Priorities, which has said it plans to submit a countywide petition Monday. But Councilman Jerry Maynard said it is up to council members to plow through all the information and arguments and make a decision on the people's behalf. "If this goes to a vote, it becomes a campaign," Maynard said. "It's going to be about 'Yes We Can' and 'No We Can't.' Let's not fool ourselves."

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