Wednesday, October 13, 2010

That Omni Hotel may cost us more for the Mazel Tovs

CM Emily Evans as usual cuts through the PR spin and exposes the risks and expenses we will bear for the tourist industry that neither the Mayor's Office nor the Convention Center Authority want us to talk about:
[The hotel feasibility consultant] concludes that the difference in hotel and sales tax collections with a hotel and without a hotel is almost precisely what we will pay OMNI in annual subsidies. In other words, the much ballyhooed "surplus" in tax revenues created by the construction of the hotel will be OMNI's surplus, not Metro's. One year, 2013 looks like it will go into the red about $3 million.
Also, much of the additional tax revenue derived from the hotel will not be hotel occupancy taxes but rather sales taxes. Of the $9.9 million extra we are supposed to collect in 2015 as a result of building this hotel only about $750,000 will be a result of more heads in hotel beds. The rest, according to Mr. Hazinski, will come from sales taxes at the OMNI hotel and the convention center or in the downtown Tourist Development Zone ....
we have to conclude that the OMNI will instead do a booming business in weddings, proms, bar mitzvah and pay parties for people who already live here. And that, of course, is bad news for every other hotel in town that does not have the luxury of fat government subsidies...unless of course Mr, Hazinski is wrong.
Whether we consider the exposure of Metro services and infrastructure funds to support Music City Center construction or we consider the sales taxes Nashvillians will pay in the future to bankroll the adjoining hotel, the subsidized deal looks sweet for tourists and the industry that accommodates them. It seems a short stick on our end.

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