Metro Government will effectively pay half the cost of a hotel to go with its new downtown convention center. That’s part of a proposed deal with Omni Hotels, which will pay cash for the cost of construction, and end up the sole owner.
Under the plan, Metro will pay $25 million next year to cover the cost of the land just South of the Country Music Hall of Fame. That money will come from the coffers of the Metro Development and Housing Agency, where city Finance Director Rich Riebeling says it’s been waiting for a project.
Metro will also pay another $103 million over the next 20 years. Riebeling says that money will come largely from tax revenue the project itself generates.
“So all of the sales tax that’s collected at the hotel or the convention center gets rebated back the project, including state sales tax. So you can imagine they come in here, every time you buy a beer, there’s sales tax on that. Every time you buy lunch, on rooms, and all of that that’s paid to state and to local, gets to come back to this project, and that’s what really generates most of the money.”
The $250 million hotel will have 800 rooms, and is set to open in 2013. The plan is still subject to change, and requires approval from Metro Council.
Raw audio of Riebeling explaining the proposal’s financial details to reporters:
For full disclosure, Rich Riebeling is a member of WPLN’s board of directors.