Tourist Tax Revenue Estimates Give Green Light to Music City Center

Tourist taxes in place to pay for a new downtown convention center would generate enough money to finance the debt on the $585 million project. That’s according to a much-anticipated consultant’s report released to the Metro Council Wednesday night.

By the estimates of a hospitality consultant, six streams of tourist taxes would generate nearly $35 million in 2013, then grow to nearly $60 million over the next decade.

Consultant Tom Hazinski says estimates were conservative.

“We have taxes not growing, in fact declining in the current year and then starting to slowly grow above historical rates then settle back down into historical rates.”

Metro finance director Rich Riebeling says the report is fairly good news for the project’s viability.

“From my perspective and knowing what I think the estimates are going to be on the debt service on the project which again are still being worked on, we think with these numbers this is a feasible project and one that hopefully we’ll be able to come forward with a financing plan for the Council in a couple of weeks.”

While the tourist taxes might support the bonds, some of that money is being spent now by other entities such as the Metro Transit Authority.

Also in Hazinkski’s report, the Music City Center would draw more than double the number of attendees at the current convention center. Nearly 550,000 guests are expected to come to events in 2015. However, the estimates are contingent on a 750-room anchor hotel that has not been approved by the Metro Council. That assumption cast doubt on the report for Councilman Sam Coleman.

“How can we get to a final financial planning if in fact the crux of the success of this convention center depends on the hotel?”

Information on whether the city can also afford to finance a headquarters hotel will be made available in early December. At the same time, Metro Finance will outline its plan to pay for the convention center. The Metro Council will have the final say on both issues.

For full disclosure, Rich Riebeling is a member of the WPLN board of directors.