The panel appointed to oversee a new downtown convention center voted unanimously Thursday to approve a financing package for the facility. Now the Convention Center Authority is advocating for the Metro Council to also sign off on the $650 million dollar bond issue.
At the end of the vote, board chairman Marty Dickens asked members of the Convention Center Authority to attend a pep rally for the new building. The Metro Council is scheduled to vote January 19th.
While the authority is charged with oversight, Dickens says it’s also appropriate to voice support for the project.
“You wouldn’t expect me, I would hope, to stand here and say ‘we really don’t have an opinion on this project. We just voted for it to go forward.’ We do have an opinion. We think it’s very important to the lifeblood of our city.”
A study released this week by a consultant suggests the convention center will pump an additional $135 million into the Nashville economy each year and create 1,500 new jobs. The funds to pay for the project come from a collection of tourist taxes. They will finance the $40 million annual debt payments for the next 30 years.
The building has a budget of $585 million, but the Mayor Karl Dean’s funding plan actually allows the city to borrow as much as $650 million.
The extra $65 million will pay for some fees associated with the bonds. Metro Finance director Rich Riebeling says the largest portion of the additional borrowing is meant to protect tax payers.
“You also have a debt service reserve fund on this transaction, which is really important, because the debt service is going to size at one year’s total debt service on the bonds. So that will be somewhere in the $35 to $40 million range.”
If the reserve fund is never needed, Riebeling says it would be used to make the final debt payment in 30 years.
The $650 million total that could be borrowed is an upper range for the convention center project. Riebeling says he expects the final figure to be $625 million.
If tourist tax revenues don’t keep up with the annual debt payments, the city’s general fund would be used as a last resort.
Panel gets serious about minority contracts
The Convention Center Authority is trying to double down on getting contracts to minority-owned firms.
Mayor Dean sent a letter to the Authority suggesting it set up a subcommittee to make sure minority-owned firms are getting a piece of the city’s biggest construction project to date. The Authority has expressed an intention to give small and minority-owned firms 20 percent of the $585 million project.
Authority member Mark Arnold says he wants to do more than signal an intention.
“We want to make sure people understand, if you make this commitment to the citizens of Nashville and you fail to live up to the commitment, there will be a price to pay.”
Many of the contracts have already been issued and they don’t include penalties for not complying with the minority contracting goal.
So far, the project has kept up with its 20 percent goal, but most of those have been small businesses, not minority owned firms.
For full disclosure, Rich Riebeling is a member of the WPLN board of directors.