Council members feel the burn as the Music City Center fight heats up
by Jeff Woods
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."
Email editor@nashviillescene.com.
Comments (12)
Showing 1-12 of 12
Why is Mike Jameson such a cry baby? He claims he wants a balanced and fair discussion, but he invites Heywood Sanders to come do a hatchet job on the Music City Center next week.
like
dislike
Ah one of the caffeinated ones laying the ground work to dismiss the preeminent expert on the topic of public financing of convention facilities. Not falling into line on a topic of great financial personal interest to you is no reason to disrespect the scholarly research he has published. It is hard to believe that a Harvard educated, municipal administration Phd knows less than the meeting planners and PR hacks. By all means bring Dr. Sanders back so everyone can hear the dark and truthful numbers from all the other cities that have gone down this disastrous path before us. Maybe someone can challenge his facts and figures with that "Nashville is a brand" mantra.
Hmmm . . . the Gaylord shill, "Moost" Sharp, touts ol' Woody Sanders as an expert. A prof from San Antonio, TX knows Nashville better than Bill Fox, an economist with the University of Tennessee, huh? Tell us, Moostie, who is paying to bring Sanders in again? He's a hired gun, you know. He's been giving this anti-convention center spiel for almost 30 years. How many cities have taken his advice? None, you say. If no one else listens to the crackpot, why should Nashville? Here's another riddle, Moostie, who wrote that Sanders "relies upon notoriously inaccurate data and then reaches conclusions that are based upon simplistic and incomplete analysis"? Yeah, Woody sounds like a real expert. How much do you suppose he'll talk about St. Louis?
Was this the same Bill Fox who has decried tourism as the poorest excuse for an industry in the state? You should listen to his annual addresses to the Government Finance Officers Association, they have been pretty informative about the "industry" and the economic drag it provides on the state's resources. Tourism and hospitality has the highest numbers of employees on state assistance, highest rates of unemployment, lowest salaries (gross and per capita), and highest level of tax breaks. It is the one industry that never pays off the "investments" governments make on its behalf. The only one. The road is riddled with the broken promises of tourism. Yet it is the only industry that can get away with using those broken promises as proof that more investment is necessary. Tourism is the broken slot machine of the economy. I find it amusing that this one convention center can produce 30,000 jobs while the Great Smoky Mountain National Park was only given credit for creating 15,000 jobs in a recently published and heralded study. Yes, the Music City Center will apparently create twice as many jobs as the most visited national park in the country! My advise, don't believe any tourism person, there is documents proof of 30 years of failure in public financing and zero documented proof of actual success meeting promises. In this fight one set of tourism liars are deflecting attention on yet another set of tourism liars. Those of us with knowledge are left just shaking our heads wondering why no one looks at the real numbers instead of the promises.
I imagine Dr. Heyward will talk about St Louis, Atlanta, Miami, Boston, Dallas, Denver, Indianapolis, Louiville, Las Vegas, Orlando, Honolulu, Detroit, Raleigh, Kansas City, Seattle, Memphis, Knoxville, Myrtle Beach and any of the countless other examples of publicly financed convention facilities which failed to meet long term consultant expectations and pie-in-the-sky economic promises. St Louis will be brought up simply as the most glaring and tragically laughable example of a city that thought it had a brand that must be protected and invested in. I am not amazed that there is only one Dr. Heyward, what I am amazed about is that there is not anyone who travels the nation talking about all the successes. Dr. Heyward ALWAYS debates a local yokel tourism overlord whose only arguments are their city is not like the 100 other cities that have failed before because they have a brand and the current facility only accommodates 20% of the market.
No evidence of successful convention centers, "Moostie" Sharp? You are truly sipping on the Woody Kool-Aid. How about these: Milwaukee increased its exhibit space by 42 percent, quadrupled the size of its ballroom, and doubled the number of its meeting rooms. It doubled its room nights. After Tampa opened its new convention center, downtown room inventory increased by about 40% and convention center business increased by 40%. Seventy percent of pre-bookings for Austin's new convention center came from groups that had never been to the city. Since the Loews Miami Beach Hotel opened, 50 additional hotels have opened. I could go on, but my point is that Woody and you never talk about those, Moostie. Why is that? Because you make your money by running down the convention business. That's Woody's niche, and your no more than Colin Reed's puppet.
You will find there that each of the centers you mentioned filed to meet the expectations placed upon them by the consultants hired to produce those numbers. The Milwaukee center is nice (odd but nice) but the expansion was done because the previous build was completed without meeting those promises. The expansion was touted as the cure for the already expensive underperformance. So the second investment was made to meet the expectations of the first project. Coincidentally it was at the Milwaukee convention center that I heard economists talk truthfully about the real tragic effects of tourism on the economy as a whole. Dr. Fox simply reinforced that with his state of the economy presentation a few months later. You will now discover that Milwaukee for the last 4 years has returned to the usage that it was previously experiencing. Just like in Atlanta where a billion dollars has brought them a net 1% gain in meeting attendance and facility usage in 10 years. One billion dollars in Georgia taxpayer money for 1%. That gain of course was from two years ago. The GWCC now is losing record amounts of money and projects even larger losses in FY 2010 and FY 2011 with promises to return to 2001 performance in FY2012. Baltimore officials expect to spend their buffer on the new hotel in three years instead of the 5 year operating loss budget. Dallas officials admitted that their new hotel will actually cost the convention center money since it will keep its own hotel motel tax money instead of forwarding it to the convention center like every other Patel in town does. Portland officials pulled the plug on their cc hotel because it did not make sense to build play things while the other parts of the actual government was dealing with cutbacks and layoffs. Las Vegas, same thing with their center expansion. No large public center has met expectations let alone escaped the red ink in 4 years. As I said before MDHA is rushing to close on property in order to get it torn down. Then we will be told the project is frozen. That is the reason for the cloak of secrecy. Obviously proponents are not capable of giving complete pictures. But they can make incomplete ones look really good. We will be able to handle 90% of all meetings. OF course that doesn't mean any more actual meetings, but what do you expect for a billion dollars, 30,000 new jobs and a million new visitors. Who will call them on it when this obviously does not happen?
Ol' Moost Sharp pulls the Woody Sanders tricks of simply going back to the same old conventions centers and talking about them, whether anyone else is talking about them or not. What is this garbage you keep throwing out, Moostie, about the project being shelved. That's total crap and you know it. Furthermore, there is no veil of secrecy. The financing package for this project is being worked out, and you, Emily Evans, Mike Jameson and the other Gaylord puppets continue to prattle on about a financing package that doesn't yet exist.
I am always amazed at the obligatory MOOST reply of "not lived up to consultants expectations" What does that mean? Does it mean what it seems to, that they promised a 200% increase but only got a measly 75%. I hate it when the profit is not quite as huge as you had hoped for.....
All Moostie Sharp has been taught to do is parrot Woody "There Ain't Never Been a City That Listened to Me" Sanders. How much are you paying Woody to come in Monday night, Moostie?
4... count them 4 Council members showed up for the "information" session with Sanders. That is over $1000 per member. Quite an expensive recap of nothingness....
Prediction: Some time before the January vote, Gaylord will fall in line behind this wonderful boondoggle, and the organized opposition will fall mysteriously silent. Months later, someone will discover a secret memorandum to the effect that the management of the Convention Center and its hotel will be contracted out to an experienced hospitality corporation whose name starts with G. The management contract will be paid for by taxpayers. You read it here first.
