Funding Information

The Music City Center’s Finances

Metro plans to pay for construction of the Music City Center using bonds. To pay off those bonds, various funding sources have been identified. All of the revenue sources are derived from existing or new visitor spending. The funding sources are identified below:

Funding mechanisms

1. 2-cents of the existing 5-cents-per-dollar hotel/motel tax
   Two-cents-per-dollar of the existing hotel/motel tax is to be maintained in a reserve fund used for the purpose of modifying, constructing, financing and operating a convention center. These funds were originally used for debt service and operating the old convention center, which debt was paid in 2006 and 2007. The average growth of these funds over the past 10 years has been approximately 3%.
2. Additional 1-cent to the hotel/motel tax
   Pursuant to TCA 7-4-102(b)(2), the Metropolitan Government authorized the collection of an additional 1-cent privilege tax on the occupancy of any hotel/motel room, effective September 2007.
3. $2 Convention Center fee per room/per night, countywide on all hotels/motels
   Pursuant to TCA 7-4-202(a), the Metropolitan Government authorized the collection of an additional privilege tax upon the occupancy of each hotel room of $2.00 per room/per night county wide, effective September 2007.
4. Rental car tax at 1%
   Pursuant to TCA 67-4-1908, the Metropolitan Government authorized the collection of a surcharge or tax of 1% on the gross proceeds derived from the rental of any passenger motor vehicle, truck or trailer for a period of five days or less. This tax primarily applies to travelers and was effective September 2007.
5. $2 Airport ground transportation departure tax
   Pursuant to TCA 7-4-203(a), the Metropolitan Government authorized the collection of a tax on the privilege of contracted vehicles (taxis, shuttles, buses and other transportation) exiting public airports. This tax primarily applies to travelers and was effective September 2007.
6. Tourism Development Zone incremental tax
   Pursuant to TCA 7-88-106(a), if a municipality has financed a “qualified public use facility” (which includes a convention center) within a tourism development zone, then state and local sales and use taxes shall be apportioned and distributed to the municipality in an amount equal to the incremental increase in such tax revenue derived from the sale of goods, products and services within the tourism development zone in excess of base tax revenues. Amounts apportioned and distributed are based on excess revenue growth in the tourism development zone as compared to the county. Incremental revenues generated will be used to pay for the convention center.
7. Sales tax revenue on items associated with the MCC “campus”
   Pursuant to TCA 67-6-103(d)(1)(E), sales tax generated by a “qualified public use facility” (which includes a convention center) within a tourism development zone shall be apportioned and distributed to the entity responsible for the retirement of debt on the convention center equal to the amount of sales tax derived from the sale of admission, parking, food, drink and any other things or services subject to tax, if such things occur on the premises of the convention center. In addition, if 1 or 2 new hotels are constructed in connection with the construction of the convention center, the zone shall also include the premises of the hotels.

The construction and operation of Nashville’s current downtown convention center was paid for exclusively with hotel/motel taxes.