Tuesday, November 3, 2009
Barry / Politics Early Indications on Music City Center Financing
Posted by Bruce Barry on Tue, Nov 3, 2009 at 12:59 PM
If all the existing and prospective taxes are going to pay for the convention center, how will the hotel be funded? At the meeting in September, Goldman all but ruled out private capital. The most skin Marriott/Phelps Portman appears willing to put in the game is about $10 million in "key money." Is the plan to get Nashville pregnant with a convention center so we have to approve a hotel that is supported mostly or entirely by the general fund?Here's a link (pdf) to the Goldman Sachs document. City officials have not as far as we can tell made it available themselves online. The new Authority has a web page, but with no minutes or documents posted. (So much for transparency.)
Comments (20)
Showing 1-20 of 20
The Tennessean reports that the Build America bonds will save Nashville $5 million a year.
like
dislike
"Without a general fund pledge, the checks and balances of the market work much better. The professional bond investors would then carefully scrutinize the projections, do their own analysis and decide if the investment was sound."
Kudos to our next mayor for writing this.
Weirdly placed reference to Gaylord being her boss by Nashville's own Rainman in 5,4,3,2,1...
The best way to look at this is the Senior bonds are the amount that Nashville can truly afford using just the taxes set aside (those are not entirely paid by tourists since well over half of rental cars are rented by local people and businesses). The junior bonds will be the gamble that will require all of us to pledge to pay them.
So is you really want to see how ego inflated this project really is just add up the junior debt and throw in the cost of the hotel (less $10 million).
I would be curious to hear an AG opinion on the legality of a vote on debt that is publicly backed.
More than likely this project will still be shelved just after the last property is purchased and torn down. They are still way behind on the public "sunshine" requirements on this to think they will get this approved on the constantly sliding deadline.
We live to serve, Moost.
Looks like Gaylord CEO Colin Reed has dispatched all of his puppets, you, Evans, Mike Jameson, et al to pooh-pooh a financing package that hasn't been fully proposed yet.
Tell us, Moost, how often does Evans meet with Gaylord's leadership? How much have they given her in campaign contributions?
While we're asking questions, how often does she meet with David Manning?
Why doesn't Gaylord bid on the hotel piece of the business? Better to hedge your bet than to lose out completely, right?
Why does Gaylord have you pimping this "The Music City Center project will be shelved after they buy the land" meme, Moost (Kevin)? That's just stupid.
The fact of the matter is that Nashville is a strong tourist destination. The Music City Center will make us even stronger. Now is a good time to build because construction costs are low and interest rates are low. Also, the Music City Center will go on line in 2013 and the economy will be strong by then.
Nashville also needs jobs. Now, West Nashville types (like Emily Evans and Kevin Sharp) discount the construction jobs as low-paying and temporary. Tell it to the 5,200 Nashville construction workers that lost their jobs in the last year.
Every time Nashville takes another step toward becoming a major city, a group of naysays wring their hands and wail that the sky is falling. Thank goodness we've ignored them in the past. Let's ignore them this time.
Because everyone knows, Grant, that Marriott hotels are far better than the tacky hotels that Gaylord builds.
Marriott also doesn't charge $18 to park your own car, or $25 for a shuttle to the airport.
Nashville is much better with a Marriott Marquis downtown.
Only if they're used, Ben. That means that we have to spend money to save money. The same logic is being used by proponents when they say we have to have the MCC now because construction costs are lower than they normally would be.
None of this justifies building a billion-dollar Convention Center when that entire industry is tanking and probably will continue to do so in the forseeable future.
If this project was such a great deal that would bring in money, the private sector would be all over it and they wouldn't need any help or pledges from taxpayers.
The fact that the most liberal AND conservative members of the Council are leery of this should be a big warning sign to Karl Dean.
He should get off this train as soon as possible or he's going to have a tough re-election fight on his hands.
Snuffy just lied like a dog. The convention business in Nashville hasn't tanked. In fact, we haven't had a single cancellation.
Despite the protestations of the MCC opponents, the tourism industry in Nashville is strong. It has survived two catastrophic events, 9/11 and the closing of Opryland theme park.
Nashville will kick itself over all of the lost business if it doesn't build the MCC.
From the 'Next Mayor's' Blog:
"Because there is likely to be a general fund pledge for the majority of this project,..." by her own math it is not the majority.
"One Goldman term sheet I saw, has that over-borrowing paying the bills until 2016. I will let you figure out why they chose 2016."
Why, Golly Gee, that will be the first year of her second term!
Yeah interest rates are so low that revenues are only short by $20 million per year. With all this talk about paying the debt it has been forgotten that these same revenue streams are also necessary to cover the operating losses. As my friend Producer has affirmed, meetings are not charged the true costs because they have too many choices among cities willing to pay meetings to come to town to fill their own empty buildings. If all the revenue does not even cover the debt service, where does the money for operating deficits come from. OR does this not happen to us since we have "a brand"?
Has the mayor started shaking down the Jefferson Street, Vanderbilt/West End, and East Nashville business owners for his convention center protection racket? They are all in the centers spehre of tax influence after all. I hear the Quiznos on West End expects to see business go up 200% once the new center opens.
Would one of those catastropic events be the implementation of the three-foot rule?
The three-foot rule was definitely a catastrophe.
Moost, why did Gaylord pull out of its naming rights agreement for the Gaylord Entertainment Center? The Predators had to sue them.
Gaylord and CEO Colin Reed have never met an agreement they wouldn't break.
This debate totally misses the strategic questions:
1. Is building up Nashville's tourist business the best way to improve the city?
2. If so, is a convention center the best way to do that?
MCC touts their 10 years of study on the project, but they never explored any alternatives to a convention center.
What are the alternatives? Oh, wait, Gaylord CEO Colin Reed and his shill Emily Evans say we should expand our leisure tourism. Why? Because they want to build a f**king water slide.
Conventions do little to help a city's economy. Seriously. Does anyone think that having a few dozen insurance company middle-managers will do anything to help our city's bottom-line. They're just going to eat at Olive Garden and watch soft-porn in their hotel rooms.
"It's not the 1980s" sounds amazingly like Heywood Sanders, the hired gun that makes a living arguing against convention centers.
Let me ask you, Heywood, how many cities have listened to you? How many convention centers have you actually stopped?
Also, have you stopped using "notoriously inaccurate data" and reaching "conclusions that are based on simplistic and incomplete data analysis."
You know where that came from, don't you?
It seems that convention center boosters either have no clue that the next several decades are going to bear little resemblance to the last several decades, or else this is a cynical welfare-for-the-wealthy scheme, kind of like the Wall Street bailout. Crowds of tourists and convention-goers are history. America is bankrupt, and the only people who still have money are the ones who stole it from the rest of us. Nashville needs a new convention center like it needs a hole in the head. The financing scheme for this will drain the city's coffers into the pockets of the already rich and keep Metro from doing real things that will help real people who really need help, just like the aforementioned Wall St. bailout.
