Tourism taxes could help defray East Bank infrastructure costs
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Mayor Freddie O'Connell's administration is pondering the use of tourism taxes, currently dedicated to the Music City Center convention hall, to help pay for infrastructure on the East Bank.
Why it matters: The city is on the hook for building out the East Bank's infrastructure. That already expensive bill will only go up with the Oracle corporate campus and the redevelopment of the old PSC scrapyard on the horizon.
- Using tourism taxes would ease the burden on the city's capital budget, which is also used for new fire halls, schools and sidewalks.
Catch up quick: In 2010, the city dedicated several tourism-related revenue streams, including hotel taxes, taxi fees and sales tax from the surrounding development zone, to pay for Music City Center.
- As tourism boomed in Nashville, those tax collections came in way higher than needed to pay for the convention hall's debt service.
- Previous Mayor John Cooper made the use of convention center reserves a centerpiece of his administration's financial strategy.
State of play: A new east-west road for the Oracle campus, the East Bank Boulevard, which will run north and south along the river, and work related to extending the Seigenthaler Pedestrian Bridge, are among the expensive infrastructure projects in the pipeline.
What he's saying: "I have met with members of the mayor's team numerous times," Tennessee House speaker Cameron Sexton told Axios in a statement. "They have discussed exploring hotel/motel tax changes within Metro that may or may not require legislative approval. They are obviously looking at various options to fund infrastructure on the East Bank."
What we're hearing: One possibility is to refinance the Music City Center's existing debt, then peel off one of its dedicated revenue streams and use that money for East Bank infrastructure costs.
- O'Connell spokesperson Alex Apple says that approach "is one of a litany of options, but at this point, no decision has been made to take any such action."