Nashville News Blog

​As the Dean administration edges toward unveiling a financing package for the proposed new convention center and accompanying hotel, pro-Music City Center forces are escalating their propaganda. In the last few days, for instance, we have seen an extraordinarily puffy Tennessean op-ed piece by Music City Center Coalition vice-chair Sam Howard, as well as an exceptionally creative claim about public support by the mayor's finance chief.

We start with some choice morsels from the Howard op-ed:

"Not only was the existing convention center paid off ahead of schedule at no cost to Davidson County taxpayers, its presence transformed Lower Broadway from a seedy strip of adult bookstores and peep shows to a vibrant tourist mecca."

The notion that the efficacy of public finance for a massive project in 2009 can be judged through simplistic comparisons to a public project in the late 1980s is beyond sophistry, as is any hint that the current convention tourism industry is analogous to then. As for overblown cause-effect claims about the original convention center's transformative role, it may have helped indirectly to light a spark, but let's not forget that the existing center was designed to turn its back on Lower Broadway, not engage it.

"The year 2008 saw the third-highest hotel occupancy tax collections in history."

Sounds precious, but you would always expect hotel tax collections to rise as the hotel inventory and room rates creep upward over the years. The fact that 2008 didn't show the very highest collections means this is really code for "hotel occupancy tax collections are declining."

"History proves that this hotel/motel tax strategy will work."

History proves nothing here since the revenue strategy for a new center cannot possibly be evaluated before we know what the financing looks like and how the revenue stream matches up with required debt service.

"At no cost to Nashville residents, the original convention center helped solidify Nashville's reputation worldwide as Music City."

Although the new center, like the existing one, would be financed primarily by money collected from tourists, absolute statements about an absence of costs to residents are fiction. Local residents pay hotel taxes and car rental fees, and their spending factors into tourist development zone revenue. Also, there are various public expenditures that support the infrastructure and operation of a large public facility. Music City Center boosters really should stop making such demonstrably false claims.

"This money cannot be used to fund anything else -- if we don't use it for the convention center, it goes away."

This is another convenient fiction -- that resources put into a new center could not be used for anything else. To the extent that there is literal truth to it -- that the specific revenues authorized by specific legislation can go only to a new convention center -- that's because legislation was expressly written to create that bit of funding determinism. It is preposterous, though, to argue that there are no opportunity costs involved in the development of a billion-dollar public project.

The creative public opinion claim came in the wake of chatter about a possible Metro Charter amendment that could result in a voter referendum on the Music City Center project. According to a Tennessean report, Metro finance director Rich Riebeling is confident the project would survive a public vote because Karl Dean was a vigorous advocate during his mayoral campaign, which means voters "knew what they were getting." There are two glaring problems with this claim.

First, there was no serious opposition to the proposed convention center during the 2007 campaign, and both candidates in the final runoff were enthusiastic supporters, so we can infer nothing about public support from Karl Dean's election. Second, if there's anything from which we can make such inferences, it's the one legitimate public opinion poll done on the subject. During that campaign, in July 2007, SurveyUSA polled the runoff race and included a convention center question: "Do you think Metro government should or should not build a downtown convention center?" Of likely voters, 37 percent said yes, and 51 percent said no. And that was back when the estimated cost of the project was significantly lower, the cost of capital in bond markets was more reasonable, and there was no talk of a publicly financed convention hotel in the picture.