Since we can’t ask questions at the meeting. I’d like an answer from Mr. Shull and if they hired a consultant to tell them that. How much did the consultant charge?

The Meadowview Conference Center does lose money each year and has to be subsidized by the City (normally with Regional Sales Tax proceeds – the Meadowview tax). Although it would be hard to prove with exact numbers, the general feeling on the City Staff and BMA is that Kingsport profits economically overall by having the Center.

The proponents of the ECC believe that it will be so attractive to outsiders, that the ECC AND the Convention Center will become profitable. In their thinking the key was adding the 110 rooms by Eastman onto the hotel to make it overall more attractive to conventions that want all their folks under one roof. Maybe this would work out, but it is so speculative that I do not wish to risk taxpayer dollars on it.

The Cattails Golf Course is normally a “Break-even” operation. While the City has paid off the Convention Center debt to bond holders, we still have some debt remaining on Cattails.

I don’t recall seeing any projected maintenance costs on the Aquatic Center. I believe that the cost of putting in sewer and water was calculated in the projection. Note that the land is being donated by Eastman. Having said that, I still believe that the Legion Pool area is best (see my earlier blog).

Finally, I don’t remember the exact numbers on room occupancy at the Meadowview. I do recall that their average is above the industry standard on an annual basis. Please see my other blog called Part II.

Pat Shull

Is there anyway to get info on room usage? I go be there a few times a week and see nothing that looks like its full.

As I put in another thread

I would like to know what the maintenance cost a year will be. Where will this money come from. If its coming form the extra tax what happens when we run out of it?

Are we going to have a rate hike getting all that water in and out of there?
Will the drought have a effect on the cost?

Will this need a new water system ie bigger pipes to get water there? If so will the roads have to be redone? Who will pay for it all?

I noted that the Times-News reporter, Matthew Lane, stated that the BMA would pay for the Aquatic Center with proceeds from the Regional Sales Tax. While that is a possibility, the most discussion by the board in recent weeks regarding this tax was about using it to pay for the Executive Conference Center ECC to be added on to the Meadowview Hotel.

The Regional Sales tax is a 1/4 cent add-on sales tax which brings Kingsport’s total sales tax rate to 9.5% (except on certain food items). The tax was voted in by referendum in the early ’90’s to pay for the construction of the Conference Center. There was NO sunset provision. In other words it continues unless the citizens vote it to be terminated by another referendum.

The city estimates that 60% of the tax is paid by other than Kingsport citizens. Because of this I do not favor eliminating the tax. Besides, if we did eliminate it Sullivan County could pick it up and then we would only receive some of the revenue instead of the total amount. Depending on the economic climate the tax usually brings in between $3 to $4 million annually.

Another reason for Not ending the tax – the Conference center has to be maintained and it loses money which entails an operational subsidy each year. However, after these costs are discounted there still remains an unencumbered amount that the city can use any way it wants. Some insist that these revenues should be applied to some use in the Meadowview area, hence the justification for using against the Aquatic Center and/or the ECC. But legally the tax revenue can be used in any manner the city wishes.

Flashback a few weeks ago. Mr. Marsh and I formally proposed that the unencumbered revenues be redirect to the city property tax payers (the real heroes of Kingsport)in the form of reducing their property tax (by the way Eastman would be the largest beneficiary in this scenario). Mr Marsh and I lost this vote 2 to 5. Again, there was a formal vote taken and 5 BMA members voted against a tax cut. Wouldn’t it be a great thing to say we lived in a city (especially during this recession) where taxes were actually reduced?

A few related facts to consider. Eastman received a $21 million tax break from the City. I voted against this, Mr. Marsh abstained (Eastman retiree), the remaining 5 voted for it. I’m a free market capitalist – I don’t care how much they pay their CEO. But it seems sort of foolish for the city to give a $21 m tax break to a Corporation that pays its CEO $8m per year. At any rate, Eastman can well afford to add those 110 ten rooms onto the hotel (they own it) for $13 million.

The ECC proponents say that it will make a profit and that the Convention Center will become profitable also. If this is such an attractive deal why doesn’t the private sector step up? Why is it that the City (meaning taxpayers) is the only entity with “Skin in the game”?

Another thought – theoretically Eastman will fill the 110 rooms with more folks visiting Kingsport, I.E. a net increase in hotel occupancy. But what if it doesn’t work? In other words what if the Meadowview simply takes customers away from the other Kingsport hotels/motels? In that scenario the City would be guilty of favoring one interest over another (please refer to the Aquatic Center in the Meadowview area). And keep in mind, that while Marriott does a great job running the complex they are NOT in the ownership. They are contractors whose contract stands to get bigger with the ECC construction (not a disinterested, objective party).

I’m for Economic Development by the city providing world class services, great infrastructure, and outstanding schools. But I don’t believe it is the City’s job to pick economic winners and losers. Lastly, a city tax cut looks like a better stimulus to me than a short term construction project.

Thank you.
Pat Shull