Another Music City Center Skeptic – Part 1

August 19, 2009 — 1 Comment

One of the ongoing recent debates in my hometown has been the development and creation of a new convention center for our city, known as the Music City Center. As a former meeting planner responsible for a large denomination meeting, I understand both the need and desire for a new convention center in Nashville. Our current convention center is relatively small, and compared with many cities of our size there is an appearance that we are somehow behind the curve. I know from experience that our current facilities in Nashville are too small to host either the United Methodist General Conference or the Southern Baptist Convention gatherings (both of which would like to come to Nashville given the proximity of the many denominational agencies in the city). There are arguments to be made that the presence of such a facility would increase Nashville’s visibility nationally, allowing us to compete for such events as the national political conventions and other large trade shows. At the same time, there are equally valid arguments against construction based on a downturn in the convention business and the rise of modern technology that is making the traditional trade show obsolete. Would the facility likely get used? Probably. Would it make money? I’m not sure that God him/herself could even answer that question.

And yet, while I can acknowledge the need for the Music City Center and understand the motivations of those who think that we have to do something soon, I continue to find myself skeptical. Some of that skepticism is a matter of timing, for it frankly seems obscene to build another big box temple to capitalism in the middle of the worst economic recession in my lifetime, one in which millions of people have lost their jobs. However my skepticism arises primarily from what seems like a lack of honesty in the process of developing the project, with a tendency to emphasize the rosier projections and an unwillingness to address the more difficult questions. While recently there has been a lot of bluster and press over the actions of the center’s PR firm (since resigned), my concerns go more to the root foundations of the project, questioning the assumptions that are being used to sell the project to Nashvillians. After sitting in a propaganda session at a recent town hall meeting, my concerns began to crystallize, and I have realized that my skepticism is focused in two areas – funding and logistics. This article will address the first of these areas, the myth of funding that is being perpetuated, while another article will address logistical concerns.

Funding

At the recent town hall meeting, a representative from the Nashville Convention and Visitors Bureau repeated a phrase which quickly become a mantra. “The taxpayers of Davidson County,” the man said, “will not have to pay a dime to fund the construction of the new convention center.”

This sounds good on the surface, and at some levels the statement is true. As the funding package is currently constructed, funding for the Music City Center is focused in a set of user fees and taxes on “visitors” that stand apart from the traditional funding sources of property and sales tax. They include:

  1. 2 cents of the existing 5 cent per dollar hotel/motel tax.
  2. An additional 1 cent increase to the hotel/motel tax.
  3. A $2 per night, per room fee assessed on every hotel visitor to Nashville.
  4. A 1% rental tax on rental cars.
  5. A $2 fee on taxis leaving the airport.

Beyond these existing taxes and fees are some anticipated tax revenues that would be gained through anticipated increased revenues generated by the convention center (although no one knows for sure if enough additional revenue will be generated to ensure the generation of these taxes).

On the surface this all sounds good. It doesn’t require support from property taxes or sales taxes, and since most residents don’t spend a great deal of time in hotels very few of us actually bear the burden of funding the center. Instead we will let our tourists pay the way for the tourism business that is a significant part of our economy. It’s found money, our leaders tell us, reserved for certain uses, such as building the convention center. It’s not like it’s “real” money, they imply, like the sales or property taxes. Somehow they seem to suggest that this is sort of like “free”money which can fund the center. And, history bears out the assertion that this funding source can indeed cover the costs given that our current center was funded in a similar manner.

However, here is the myth that they are selling. These leaders act as if these funds are “different,” that they aren’t like “real” taxes (especially since they structured these taxes and fees to only be used for certain purposes). In fact, these taxes and fees are just like any other taxes or fees in that they represent a funding source that the city leaders can ultimately designate toward programs. In example, while 3 cents of the current 6 cent hotel tax is dedicated for the convention center, there is nothing to keep the Council from designating that same three cents to fund public safety, or Metro General Hospital, or any of the other programs that are currently underfunded. There is nothing keeping the Council from designating the taxi fee toward public works to cover road projects not funded by the state. These moneys aren’t different or unique. They are taxes like any other tax, and while the average resident may not be paying them, the fact is that these taxes and fees are an income stream that could be used for many things.

This past year we saw a Metro Nashville budget which required every program that assisted the poorest and most needy of our community to make ten percent cuts in their operating budgets, leaving us with a public hospital that is a $1.5 million dollars underfunded, and major reductions in services for the needy. We currently have a police department that is fully funded, but is policing the city with half the number of officers as used in other cities of comparable size. Sales tax revenues continue to decrease, and there is no sign that they will go up anytime soon. Thus, in a city which is a dollar poor with no more money in sight, shouldn’t the majority of revenue streams be directed toward the essential services of the city?

It is a myth to say that we won’t have to pay a dime for the construction of the convention center for those moneys collected in hotel taxes, user fees, etc. are just as much ours as funds collected through more traditional means. And yet, for some reason, our leaders seem to see them and treat them as “off the book” funds which have no potential for impact on meeting budget shortfalls.

Next time, let’s talk about some logistical concerns.

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One response to Another Music City Center Skeptic – Part 1

  1. 

    Jay, I have continually wondered why Nashville (or should I say the Nashville Chamber) has never conceded that the facility at Gaylord Opryland is more than enough to house the majority of conventions that would want to meet in Nashville. There is absolutely no justification for what the chamber and MDHA are proposing.

    As for the General Conference of the UMC, would it not be possible to utilize the arena for the main sessions and the existing convention center (and adjoining hotels plus McKendree UMC) for the breakout sessions? I think it would be very possible if anyone really wanted to make it happen. The SBC may be a different story based upon the numbers involved, but really, how many conventions of that size are there and how much would be sacrificed in the bidding process to get them in town?

    On another note, I’m aware of one medium sized (600-800) convention of a state-wide organization that is seriously considering a move when their contract is up with the current convention center/convention hotel because the costs have skyrocketed in recent years. Perhaps this is an area that needs to be explored before a billion or so gets blown on a convention center that is not needed.

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