As Nashville prepares to answer a momentous question—should we build a giant new convention center?—the decision is still at least a couple months away. But fence-sitting Metro Council members say they're being pressured to knuckle under to boosters—a feared gambit that's quickly becoming notorious in certain corners of the courthouse as "The Hot Box Treatment." Many observers think mudslinging, dirty tricks and worse might lie ahead."Quite frankly, I think it's going to get pretty nasty," says Councilman Michael Craddock, who's already so angry he's openly challenged one tourism official to a fight. "All's fair in love and war, I guess, but I really wish they'd go about this a little differently. This is the biggest decision this city's ever had to make."
Mayor Karl Dean hopes to tout the so-called Music City Center as his signature achievement someday. At a cost of $1 billion on 15 acres in trendy SoBro, the center and its accompanying hotel would become our biggest capital project ever, presumably making Nashville competitive with larger cities for more convention business.
Along with Dean, all the '07 mayoral candidates were gung-ho for it. With only the usual town cranks in opposition, its construction once seemed inevitable. "I almost think it'd be irresponsible of us not to do this," Dean has said. The mayor must wonder how things went so terribly awry. Let's review:
Gaylord Entertainment Co.—the queen of Nashville corporate welfare—made a bargain: In return for not opposing the downtown endeavor, the company would receive $80 million in tax benefits for a massive expansion of Opryland Hotel, which runs its own competing convention business in the suburbs. It all was made official in a Memorandum of Understanding to that effect.
The skids were greased! The Metro Council voted 28-6 in June to put skin in the game, spending $75 million to buy the land for the center.
But a confident Dean may have overreached by giving the city's most successful PR firm, the rapacious McNeely, Pigott & Fox, an open-ended flacking contract. Predictably, MP&F went wild. A half-million dollars later, the PR masterminds had mostly created a PR nightmare for the mayor.
The big wheels at Gaylord know an opening when they see one. The economy went south before they could expand Opryland Hotel. Their own grand plans spoiled, they decided to screw up Karl Dean's. Their deal with downtown was off. The MOU had expired. This fall, Gaylord suddenly started making noise about opposing the convention center—especially the publicly financed hotel that Dean might build next to it.
To set things right, Gaylord mobilized its star lobbyist, Tom Ingram, alter ego of Sen. Lamar Alexander. In response, convention center boosters set the courthouse buzzing by hiring Dave Cooley, longtime associate of Gov. Phil Bredesen, to represent their interests.
Cooley and his over-caffeinated accomplices have quickly organized informational meetings (to use their euphemistic term) for undecided council members. Their goal? To foster "good healthy discussions," according to Bradley Jackson of the Tennessee Chamber of Commerce and Industry, who set up one meeting.
"We've been totally up front about all of this," Cooley minion Mark Brown says.
But council members are complaining they're walking into traps. The unsuspecting official thinks he's having a casual cup of coffee with a friend or two, only to discover a gang of influential donors and supporters waiting to pounce. Terry Clements of the Convention and Visitors Bureau shows a PowerPoint presentation on the project's wonders, and then everybody hectors their elected representative to hop into line.
Or at least that's the way it's apparently supposed to work. In practice, the heat hasn't always been so intense. After watching Clements' rah-rah presentation, the meetings' attendees sometimes are less than overwhelmed by the deal. They just shrug when it's time to apply pressure. Be that as it may, council members are outraged.
"I mean, they're just being hot-boxed, and we know it," says one furious member who asked not to be named, for fear of upsetting the people who are making him furious.
Craddock caught wind of a meeting to pressure Councilwoman Karen Bennett, and he showed up to give her moral support.
"I walked up to Terry Clements and I said, 'Don't you ever try to do this to me. If you do, I'm going to fight with you,' " Craddock says. "I'm not going to let anybody ambush me. It's uncalled for."
Another favorite tactic: wildly exaggerating the project's benefits. The Dean administration, for instance, claims it'll create 30,000 new jobs—10 times more than even the city's own rosy feasibility study predicts. And none of it (they claim) will cost Nashville taxpayers a dime! While it's true the center would be paid for primarily with money collected from tourists and other visitors, Dean has yet to unveil the financing plan, so it's impossible to know how the revenue stream matches up with required debt service. (More on this later.)
Publicly, Gaylord is playing it cagey, lest anyone see the company as selfish and greedy. Gaylord insists it isn't trying to torpedo the convention center (and possibly the city's economy in the process). "Gaylord's where it's always been," Ingram says. "They want to be a good corporate citizen. Always have been. In this case, they'd like to find a win-win for the community and for the shareholders of Gaylord."
Pressed to elaborate, though, Ingram eventually acknowledges it's "potentially a problem" for Gaylord if the city goes into the hotel business and starts hacking away at Gaylord's profits.
But without a hotel, boosters say, the convention center isn't viable. The hotel, in turn, isn't feasible without public money. "It's kind of an all-or-nothing proposition," Brown says. So in effect, opposing a publicly financed hotel is the same as opposing the convention center.
There's speculation that Gaylord wants the city to scale back the hotel—which could boast as much as 100,000 square feet of meeting space on its own premises. But that also might damage the project's feasibility. Ingram won't say exactly what, if anything, Gaylord is asking the Dean administration to do.
Inquisitive reporters can't wrench any information out of city finance director Rich Riebeling, either. He's supposedly negotiating with Ingram. But why should the public have any inkling of what's said in a courthouse backroom (or over whiskies at Jimmy Kelly's) about a billion dollars of their money? Here are excerpts from our bewildering talk with Riebeling:
Q: What does Gaylord want?
Riebeling: You'd have to ask Gaylord.
Q: Have they asked for anything?
Riebeling: They haven't asked me for anything.
Q: You're not negotiating with them at all?
Riebeling: I think from time to time we may have some conversations.
Q: Well, are they not asking for anything? You have no idea what they might want?
Riebeling: Uh, I think that should come from them. They tell me they're for the convention center.
Really? Adding to the Alice-in-Wonderland quality, Gaylord's allies deny any connection to Gaylord. Who wants to be known as a corporate stooge? Suddenly, no one seems ever to have seen or heard of Gaylord CEO Colin Reed, who's beginning to take on a Howard Hughes-like mystique.
Even Councilman Mike Jameson, a convention center skeptic and one of Dean's main critics, interrupted our interview by launching into an unprompted, vociferous denial that he's a Gaylord puppet.
"I wouldn't know Colin Reed if he stepped up and bit my term-limited ass," Jameson says. "He's never called me. He's never spoken to me. I've never heard anything from him in writing or otherwise."
Interestingly, about the time Ingram supposedly was telling Riebeling how much Gaylord loves the idea of a new convention center, a new organization named Nashville Priorities began running around the city bad-mouthing the idea. The group's chairman, a lawyer named Kevin Sharp, insists he's participating in a spontaneous grassroots uprising.
According to Sharp, it's all mere coincidence that (a) he's the son-in-law of prominent Republican Lew Conner, an attorney with the lobbying/law firm of Waller Lansden Dortch & Davis; (b) that Waller Lansden represents Gaylord; and (c) that Conner is one of Ingram's best friends.
Sharp says he's never talked with anyone connected with Gaylord about any of this, not even his father-in-law. Oh yes, he says—he did speak once with Ingram, when Gaylord was donating $8,500 to Nashville Priorities. Apparently, Gaylord just happens to agree with Nashville Priorities' position on this issue and wanted to make a small donation to encourage a vigorous civic debate.
"I'm not sure if Colin Reed would recognize me if he saw me on the street," Sharp says.
Of course, no one can predict how all this might shake out until the mayor produces the project's financing plan. When will Dean make the plan public? "When it's ready," says Riebeling, that Chatty Cathy. After a little more back and forth, he finally says it'll probably happen before the end of the year.
It might cost $45 million a year to pay off the debt—and that's just for the convention center itself, not for the hotel. The mayor promises it would all come from visitors, mainly through taxes on hotel rooms and rental cars and the like. There's also something called a tourism development zone. For the next 30 years, all businesses located inside it would send all their new sales tax cash to the convention center kitty bank.
This would be done on the theory that all that incremental sales tax money would come from tourists. But the zone as presently configured is the biggest allowed by state law (three square miles), and no one really thinks all those businesses—from the Jiffy Lube to the Krystal—would actually benefit from the convention center. That means some of the annual $8 million that the zone is supposed to produce wouldn't come from tourists at all and would go for schools and other city services if not for the convention center. So there's a lost-revenue factor the council would do well to consider, especially in this time of city budget cuts.
The tourism development zone is subject to approval by the state Building Commission. State Comptroller Justin Wilson, who sits on the commission, is complicating Dean's plans by raising questions about the zone's size. Wilson may redraw it to include fewer businesses, making it even harder for boosters to claim they can finance the center without putting Nashville's taxpayers on the hook.
By the way, Wilson was a longtime attorney with Waller Lansden, Gaylord's favorite law firm, and he's a friend of Ingram's too. Is it just another bizarre happenstance that he's the one messing with the mayor's tax scheme, or is it evidence of Gaylord's influence in our city's backrooms? We report, you decide.
The mayor wants the council to vote by mid-January, but the anxiously awaited financing plan is the key—the magic wand that will turn this project either into Dean's can't-miss deal or Dean's boondoggle. If he fudges the numbers too obviously to make ends meet, his council majority might evaporate. At that point, all bets are off.
Jameson, for one, is pleading for both sides to commit to that most elusive of all goals—a thoughtful and polite decision-making process.
"I'm not declaring either side the angel or the demon," Jameson says. "But if Gaylord doesn't get what they want out of whatever negotiations they're involved in now, they're just going to carpet-bomb every district with robo calls and community newspaper ads, and then people with the Convention and Visitors Bureau are going to come to me and ask, 'How come we can't have an honest dialogue?' And I'm going to say, 'Folks, you could have signed up when the time was right.' It's going to get ridiculous. The victim of all of those strategies is going to be the truth."
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