No WhiteWash!

I have written many posts concerning the City of Kingsport decision to spend $15 million to expand the Meadowview Convention Center.  However, I feel in view of the political spin that certain city leaders have been doing lately, I feel the public needs to be aware of some facts.

Apparently, the City of Kingsport is getting some heat on the decision they made to fund the expansion of the convention center and they are issuing misleading statements.

In an article written by Scott Draper for WJHL,

Expansion On The Meadowview Convention Center In Kingsport Upsets Some Alderman

it states “the city reports it collects 23-million dollars a year from Meadowview”.

Property tax collected by the city from the Meadowview helps keep taxes low in the city.  “That’s an additional 85-million dollars in real estate taxes the city can use that we don’t have to raise property taxes on homeowners.” said Phillips.

It has been reported that the Meadowview hotel revenue is $11 million and not $23 million.

Phillips is blowing smoke with 85-million dollars in real estate taxes. That is likely the assessed value of developments in the area – not taxes.  To get $85M of taxes, we would have to have an investment of $9,240,000,000 at Meadowview. That’s $9.2 BILLION.

Also, Meadowview hotel is appraised at $11,533,100 and not $85 million.  The convention center and golf course are exempt from taxes since the city owns them.  The above statement is reflective of all of the properties in the Meadowview area such as doctors offices, Eastman Credit Union, Dave Clark coffee shop, etc.

The total additional sales and property values should have no value in determining to expand the convention center.  When I visit my doctor in the Meadowview area, I do not stay at the MeadowView Resort and Convention Center at prices that start at $159.00 per night.  also, if I wanted to go to Eastman Credit Union, get my hearing checked, get a cup of coffee, get my teeth worked on, have plastic surgery, go to the Social Security office, etc., I don’t have a need for the MeadowView Resort and Convention Center.

It is apparent that the city leaders are attempting to ride on the coattails of the surrounding businesses to justify the MeadowView Convention Center Expansion.

I am sure that the surrounding businesses do not need to ride on the coattails of MeadowView Resort and Convention Center.  They would do just fine if there were no MeadowView Resort and Convention Center.

The facts are that the MeadowView Convention Center and the Catskills Golf course are not money makers for the City of Kingsport.  The taxpayers are the ones that keep the city portion afloat.

The city invested $19.7 million in the conference center and $6.2 million in Cattails Golf Course.  From what I can see, both are not moneymakers and are being given money from the Regional Sales tax fund.  Now if we throw in the $15 million for the expansion, the city would have a total of $40.9 million invested which does not include interest.

The Kingsport 2008-2009 budget shows how the Regional Sales Tax is distributed.  The $19.7 million debt for the MeadowView Convention Center was paid off in 2007 and the Cattails Golf Course will be paid up in 2017.  The table below shows that $1,233,500 is budgeted for the convention center, $783,100 for Cattails Golf Course, and $800,000 goes to the general fund for the City of Kingsport to spend.

Alderman Ken Marsh and Pat Shull proposed putting off the expansion plan, and giving the tax money that would be used to fund the expansion, back to taxpayers, by lowering property taxes.  the board voted the proposal down by 5 to 2. “I think the citizens of Kingsport need to realize a majority of the board turned down a plan to reduce their property taxes”, said Alderman Pat Shull.

The way I see it now is that the city currently has a lost leader with the convention center and golf course.  I do not see how the city /taxpayers are benefiting from the current situation at Meadowview and spending another $15 million for the expansion, in my view is simply lining the pockets of Eastman, Marriott and other businesses.  Dennis Phillips statement that the expansion needed to be built to keep from raising taxes doesn’t fly.  It may be if it is built, then taxes may have to be raised.

Eastman invested $12 million when the hotel was built, (which is now appraised at $11.5 million) and now gets $11 million per year in revenues.  City of Kingsport invests $25.7 million (convention center and golf course) and loses money.  I think there is some funny math going on here.

When times are tough, companies find cost savings wherever they can. Now some employers are doing away with the 401(k) match, a benefit once considered almost sacred or reducing/eliminating meetings to save money.

The convention center expansion puts all the risk on the citizens of Kingsport when there is a downturn in the economy.  In fact when the economy has been good, the taxpayers have been keeping the current convention center in operation because it has not been a money maker.  The big money interests in Kingsport tend to view the City Treasury as a means of facilitating their own interests

See other posts on MeadowView

Alderman Marsh presented a resolution at the October 21, 2008 Kingsport Board of Mayors and Aldermen to eliminate the quarter percent sales tax that voters approved in 1992 to fund the Meadowview Convention Center.  The quarter percent regional sales tax had served it’s purpose and the convention center debt was paid off in 2008.

The resolution was to use a portion of the regional sales tax to reduce the property tax rate for citizens. The citizens of Kingsport could have received a reduction in their city property tax, but the resolution was quickly voted down by the “gang of five”. (Mayor Dennis Phillips, Vice Mayor Mallicote, and Aldermen Munsey, Joh, Shupe)  See Kingsport Times-News article  “Marsh urges scuttling MeadowView expansion

The decision of the “gang of five” showed their true colors by voting against the citizens for a property tax refund and instead voting for special interest groups.

Alderman Shull and Marsh have in the past tried to discuss the future of the regional sales tax, but Mayor Phillips would always table the discussion.  It is my feeling that Mayor Phillips had no intention of ending the regional sales tax and had plans to use it for MeadowView Convention Center expansion.

The October 21, 2008 BMA meeting got a little heated with Vice Mayor Ben Mallicote going on the attack, Alderman Joh stated that Aldermen Shull and Marsh were just sore losers.  Mayor Phillips stated that without MeadowView the city would have to raise taxes.  He also made a statement that MeadowView is needed to keep from reducing police and fire protection and doing trash pick-up every two weeks. Mr. Mayor, stop the spin, it may be news to you, the convention center has been operating at a loss and the taxpayers are in fact keeping the convention center in business.  The voters of Kingsport are smarter than you think, Mayor Phillips.

Maybe, I will in the future do a post about the wasteful spending in the City of Kingsport by Mayor Phillips and his gang.

Famous Quotes from the Kingsport Board of Mayor and Aldermen

Mayor Dennis Phillips – ‘We need MeadowView to keep from reducing fire, police protection, and reducing trash pick-up to every two weeks.” October 21, 2008

Mayor Dennis Phillips –“We need to annex so we don’t have to raise taxes”  February 5, 2008

Alderman Munsey – “We need to do the MeadowView expansion to keep from raising taxes” September 15, 2008

Alderman Munsey – Debt is neither good or bad,”   June 3, 2008

Vice Mayor Mallicote – “I do not believe all of the doom and gloom about the economy”.  June 3, 2008

Mayor Dennis Phillips – “If the taxpayers wanted the city to cut the spending, then we could collect garbage every other week”  June 3, 2008

Mayor Dennis Phillips – “If there were no money to spend, then you would not need politicians”  October, 2007

On September 16, 2008, the Kingsport, Tennessee Board of Mayor and Aldermen voted to spend $819,000 for an architect to design the $15 million expansion at the Meadowview Conference Resort and Convent Center.  This was brought quickly to a vote without much detailed discussion or input from the public.  There were discussions on using the regional sales tax to fund the convention center expansion.

Again, this vote was another example of railroading a vote.  Alderman Marsh expressed concern that this was voted on within 24 hours and that there had not been ample time to study the the financial numbers.  He also asked what is in it for the citizens of Kingsport.  He said that this is more for the special interests of certain people.  He attempted to defer the vote to the latter part of October, but Alderman Marsh’s and Alderman Shull’s votes were not enough to postpone the vote.

Simply put, this is an example of the City of Kingsport catering to special interest groups and there seems to be no value to the citizens of Kingsport.  See posts Kingsport, Tennessee incestuous relationship with special interest groups, Convention Center issues plague cities, and More hissy fits in Kingsport, Tennessee Board of Mayor and Aldermen for more background information.

What are you views on the action of the BMA to not give back to the taxpayers the regional sales tax?  Leave a comment.

I am sure that most of you have had enough of elections lately, however there will be an election to elect members of the Kingsport, Tennessee Board of Mayor and Aldermen whose terms expire June 30, 2008.  The BMA members with expiring terms are listed below.

The election will be held in May, 2009 and candidates should be making their announcements sometime in the first quarter of 2009

Mayor Dennis Phillips

Vice Mayor Ben Mallicote

Alderman Valerie Joh

Alderman Pat Shull

Below, are the results of the last election for the City of Kingsport, TN. The number of people voting in this election has a lot to be desired for a city that has a population about 45,000. In the chart below, Dennis Phillips was elected as Mayor and Marsh, Munsey and Shupe were elected as Alderman. It is quite apparent that people are not getting involved in local politics, but do have an issue with the local politicians when things don’t go their way

There are a total of seven BMA positions that are determined by local elections. The BMA members choose the position of Vice Mayor. There are a five Alderman, Mayor, and Vice Mayor that make a total of seven votes on the Board of Mayors, and Alderman.

If you are happy with the current direction that the current BMA is going, then that is fine. But, if you have concerns, then you need to get involved and cast your vote.

At the October 7, 2008 meeting of the Kingsport, Tennessee Board of Mayor and Alderman, it was voted on to spend $479,826 for the design phase of the V.O.Dobbins Community Center renovation and expansion project.  It has been estimated that the cost of the expansion could cost as much as $8.7 million.

Alderman Marsh and Shull voted against this project, because it had grown into something bigger than in the earlier discussions.  Both, Marsh and Shull expressed concerns that the city was getting into the business of competing with the private sector.

Alderman Marsh stated that the City of Kingsport is attacking its own taxpayers by competing with businesses that has rental property that rent to nonprofits.  The city is looking to have as renters, non-profits that are renting elsewhere in the city.  For example, if the city is successful, United Way would leave the downtown area to relocate to the V.O.Dobbins Center and thus steal customers away from the private sector.

Statements have been made in the past Mayor Phillips and Vice Mayor Mallicote that the City does compete with the private sector.

Since the City is becoming more of a socialist type of government by attempting to be involved in many areas, I would like to suggest the following.  I propose that the City of Kingsport set up some new businesses in some of the many properties that it owns in the downtown area.

The first business would offer free or almost free legal services to the citizens of Kingsport.  Another business could be in the real estate area by helping folks buy and sell their property at a greatly reduced cost.  Another business could be in the funeral area by offering free funerals and caskets at cost.

Somehow, I don’t think the above proposals would be approved, because it would be competing with some of the firms that members of the BMA own or manage.  I am sure that the BMA members that have voted in the past to compete with the private sector would be very quick in voting down a proposal that would compete with their own business.

If there were such a proposal, then maybe the BMA would see first hand how the private sector feels about competing with the City.

Kingsport, Tennessee – With the economy the way it is now, one thing is certain that the citizens are asking, how did this happen?  The finger is pointing at the elected government officials and the financial community as the culprits.

Families are having a difficult time surviving this crisis and there is much anger when one’s retirement saving disappear.

The bottom line cause of this is GREED!

One would not know that there is an economic crisis in Kingsport in the way that the city is spending money.  It appears that it is business as usual spending the taxpayers money.

Lately, the City of Kingsport has approved and will spend  $15 million for the Aquatic Center, $8.7 million for V.O Dobbins Renovation, and $12.5 million for the MeadowView Convention Center.  Also, the Kingsport Board of Education is on a land grab kick by buying up properties around schools.  I could list many more examples of out of controlled spending, but I think you get the point.

The five BMA members below are the BIG Spenders of taxpayers money (gang of five)

Mayor Dennis Phillips *	Vice Mayor Ben Mallicote *	Alderman Larry Munsey	Alderman Valerie Joh *	Alderman Jantry Shupe

Alderman Marsh and Shull below have shown the most restraint in spending the taxpayers money.

Alderman C. Ken Marsh, Jr.	Alderman Pat Shull *

* Term expires June 30, 2009

Express your views to the BMA if you have a concern with the spending.  Should we have a petition to remove certain BMA members from office?  You can leave a comment on this blog, write letters to the local newspapers, tell your friends, go to BMA meetings and express your concerns on TV, etc.

The citizens of Kingsport, Tennessee need to be aware of the decision by the Kingsport, Tennessee Board of Mayor and Alderman to use the taxpayers money to build an executive conference wing onto the City of Kingsport MeadowView Convention Center. The Board of Mayor and Alderman railroaded this to a vote at the September 15, 2008 BMA meeting without public input. It is estimated that the expansion will cost $14 to $15 million dollars.

Alderman Shull and Marsh voted against the expansion, while Mayor Phillips, Vice Mayor Ben Mallicote, and Aldermen Valerie Joh, Larry Munsey, Jantry Shupe voted to proceed with the expansion. See More hissy fits in Kingsport, Tennessee Board of Mayor and Aldermen.

BMA members below that voted for the expansion at MeadowView Convention Center (gang of five))

Mayor Dennis Phillips	Vice Mayor Ben Mallicote	Alderman Larry Munsey	Alderman Valerie Joh	Alderman Jantry Shupe

I am very passionate about this expansion and feel it is the worst decision the Kingsport BMA has made lately.

First of all, I do know a thing or two about hotels, meeting facilities, conventions, and trade shows. I have literately stayed at many thousand overnight stays at hotels and have participated in setting up meetings, conventions and trade shows across the Untied States. I have worked with events planners from major corporations to set up meetings. I have also worked with major corporate hotel owners to help them promote their hotels and conventions facilities in many cities.

The current MeadowView Convention Center was paid for using the sales tax that voters voted on some years ago. However, the convention center debt is paid up, but the City of Kingsport is still pouring money into it because it is not a profit maker.

Now the city wants to expand it and build a plush executive type facility that could cost up to $15 million dollars. The risk is upon the citizens of Kingsport who as taxpayers will be footing the bill. The city is proposing to pay for the expansion out of the regional quarter cent sales tax rate that the voters approved in 1992 for the construction of the original convention center.

If this expansion is such a great idea, then why not share with the citizens of Kingsport the business case or economic justification for the expansion.

It appears that this expansion will cater to the special interests of firms/people who desire this expansion, but are not at risk, because it is not their money. The incestuous relationship by Mayor Dennis Phillips, Vice Mayor Mallicote, and Aldermen Munsey, Joh, Shupe with special interests groups should be of concern to the citizens of Kingsport.

With the glut of similar available facilities that Kingsport wants to build, it is beyond me how Kingsport can justify this expansion.

Kingsport, Tennessee is not the easy to get to if traveling by airplane. Companies look at how long it takes to travel to a convention site. The small size of the TriCities airport and the available airlines servicing it makes it undesirable. Flying into Knoxville is better, but again the available flights are limited and the Knoxville airport is two hours away.

Companies also look at the attractions that the convention site area has to offer. Kingsport does not have the attractions that are needed for diverse convention attendees. Sorry Kingsport, golf does not appeal to everyone. Also, the smell from Eastman makes undesirable for out of town people.

Companies will ask for deep discounts on hotel rooms or convention facilities. Will Eastman Chemical Company, the owner of the hotel give the discount or will the taxpayers absorb the discount for the it’s convention facility use?

I would propose that Kingsport sell the current convention facility to Eastman. It appears that they benefit the most from the convention facility. The Kingsport Chamber Of Commerce operates Kingsport Convention and Visitors Bureau and their members also will benefit. If there are others that feel that the expansion of the convention center is needed, then let them build it with their money.

Kingsport have stated that they have talked to companies about this type of executive conference center. What Kingsport needs to do is ask for advice from the CEO’s of companies they have talked to. Tell the companies that about twelve years ago, the City of Kingsport invested $19.5 million dollars to build the Meadowview Conference Center, but the conference has not been a money maker and the city has to put money in to keep it going. Tell them that Kingsport is going to make it better/bigger and put up to $15 million dollars into a expansion. Also, tell them that the city owns the adjoining Cattails golf course, that cost $6.2 million dollars and is not a money maker. Tell them that the convention center helps line the pockets of Eastman by driving sales to the Eastman hotel next door. Based on the above, ask them if they would invest in the expansion considering the competition in the convention business and the glut of conventions centers. If they say that they would invest, then ask if they would build it.

If building a new convention center in Kingsport is such a wonderful way to make money for our community, why isn’t some wealthy business person or company telling the city, “I’ll build the convention center and let you use it (at a cost of course).”

Since this is such a brilliant idea, don’t you think that some venture capitalist would seize upon the opportunity and run with it?

The simple answer is it’s not worth the risk.

Venture capitalists are in the risk/reward business. The bigger the risk, the bigger the reward. But successful venture capitalists weigh the risk before they make an investment, and if the risk is too big they won’t do the deal. It seems to me that the lack of any real business people putting their own money into this project is a clear indication that the risk is not worth the reward.

With all of the down-side associated with this project, no business person in their right mind would put their own money into this thing. So why in the world are our elected officials willing to do this project?

The simple answer is that it’s not their money they’re playing with, it’s ours.

And that’s why it’s worth the risk.

Express your views to the BMA if you have a concern with this expansion. Should we have a petition to remove certain BMA members from office? You can leave a comment on this blog, write letters to the local newspapers, tell your friends, go to BMA meetings and express your concerns on TV, etc.

Below is some background information from the Brookings Institution.

Space Available: The Realities of Convention Centers as Economic Development Strategy

Heywood Sanders

The Brookings Institution

To cities the lure of the convention business has long been the prospect of visitors emptying their wallets on meals, lodging, and entertainment, helping to rejuvenate ailing downtowns.

However, an examination of the convention business and city and state spending on host venues finds that:

• The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections. Moreover this decline began prior to the disruptions of 9-11 and is exacerbated by advances in communications technology. Currently, overall attendance at the 200 largest tradeshow events languishes at 1993 levels.
• Nonetheless, localities, sometimes with state assistance, have continued a type of arms race with competing cities to host these events, investing massive amounts of capital in new convention center construction and expansion of existing facilities. Over the past decade alone, public capital spending on convention centers has doubled to $2.4 billion annually, increasing convention space by over 50 percent since 1990. Nationwide, 44 new or expanded convention centers are now in planning or construction.
• Faced with increased competition, many cities spend more money on additional convention amenities, like publicly-financed hotels to serve as convention “headquarters.” Another competitive response has been to offer deep discounts to tradeshow groups. Despite dedicated taxes to pay off the public bonds issued to build convention centers, many—including Washington, D.C and St. Louis—operate at a loss.

This analysis should give local leaders pause as they consider calls for ever more public investment into the convention business, while weighing simultaneously where else scarce public funds could be spent to boost the urban economy.

Actual $107,100,000
During Mayor Dennis Phillips time as mayor, the amount above in new bonds (debt) has been issued . The mayor has a little less than a year left in his current term and there are plans to add more debt such..The Aquatic Center ($15 million) has not been approved and is included in the total below.Actual and Planned $123,100,000

Mayor Dennis Phillips clearly will make history as the Kingsport mayor who spent the most of the taxpayer, children and grandchildren money.

Mayor Phillips may have been a former banker and is used to working with other peoples money. But he should stop to think how the citizens feel about the financial types. I will say that the finance folks have a very unfavorable rating because of what is transpiring with failed banks foreclosures, Lehman Brothers, AIG, Merrill Lynch, etc

Mayor Phillips also had help in acquiring this debt by the Vice Mayor and other Aldermen. Aldermen Marsh and Shull voted the most against new debt.

The Kingsport, Tennessee Board of Mayor and Aldermen voted to spend $819,000 for an architect to design the $12.5 million expansion at the Meadowview Conference Resort and Convent Center. This was brought quickly to a vote without much detailed discussion or input from the public.

The September 16, 2008 televised meeting of the BMA showed that Vice Mayor Ben Mallicote has an issue with anger management and should seek help with it. In fact, it appears that there are many on the BMA that throw hissy fits when someone makes a statement why they are voting a certain way. See Mayor has hissy fit and attacks Alderman on TV

Again, this vote was another example of railroading a vote. Alderman Marsh expressed concern that this was voted on within 24 hours and that there had not been ample time to study the the financial numbers. He also asked what is in it for the citizens of Kingsport. He said that this is more for the special interests of certain people. He attempted to defer the vote to the latter part of October, but Alderman Marsh’s and Alderman Shull’s votes were not enough to postpone the vote.

In my view, the City of Kingsport has no business competing with other businesses. Kingsport built the convention center with a special sales tax that was approved by the voters many years ago. The current convention center is paid off, but the city continues to subside the convention center. The convention center is not a money maker and the city wants to spend another $12.5 million to expand it to make it a plush convention center.

Let hotels build convention centers and let them operate them. They have the expertise and experience in this type of thing.

This BMA board is out of control when it comes to spending the taxpayers money. Mayor John Campbell and his gang of five (Phillips, Mallicote, Munsey, Joh,and Shupe) continue to find ways to set records in spending the taxpayers money. They may listen to citizens concerns, but they are going to do it their way.

Below is a post that I wrote on February 18, 2008 that the Mayor wanted to spend money for a pool at the hotel, but the hotel already had a pool.

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Kingsport mayor urges look at MeadowView improvements

Kingsport is looking for more ways to spend money at the MeadowView Conference Resort & Convention Center. Eastman Chemical owns the hotel and the City of Kingsport owns the convention center at the same location. Kingsport also owns the golf course that is next to the MeadowView complex. The MeadowView Conference Resort & Convention Center is managed by Marriott

I would like to tell the Board of Mayors and Alderman to not spend the tax payers money on a pool for MeadowView……because they already have one.

KINGSPORT — Mayor Dennis Phillips wants the Board of Mayor and Aldermen to re-examine the MeadowView Conference Resort and Convention Center to see what investment, if any, the city should be making to help improve the facility for the future.

Phillips’ comments come after Eastman Chemical Co. announced last month a $15 million expansion project for the hotel — adding two 55-room towers and bringing the total number of rooms to 305.

In addition to the hotel expansion, Eastman is also footing the bill to renovate the facility’s existing 195 rooms. Once completed, all 305 guest rooms will feature the latest technology, including 32-inch flat panel televisions that will allow guests to plug their laptops into the TV screen.

“I believe it’s time for this board to re-examine MeadowView and see what investments, if any, we should be considering,” Phillips said.

A couple of items that catch Phillips’ eye are the fact MeadowView does not have a pool, and when he takes his 85-year-old mother to lunch at the hotel’s restaurant, she has to walk “a half mile.” Kingsport Times-News article

Kingsport, Tennessee has decided to build a new aquatic center at Meadowview and to co-locate with the YMCA.

The very vocal concerns expressed by local citizens over the location of the aquatic have fallen upon deaf ears by the Board of Mayor and Aldermen.  The citizens are calling for a petition to stop the aquatic center and voting the current BMA out of office.  Never before have I seen Kingsport citizens more angry.

I have not written a post of this issue before, but privately, I felt that the BMA would vote to place the aquatic center in the Meadowview area.  It appears that certain members of the BMA had decided to railroad this issue to a vote.  The very short two day notice of a public meeting was a good indication to me that the BMA wanted to push the aquatic center.  Giving the public two days notice of a public meeting to me is not ample notice for an aquatic center that has been in the works a long time.

I would like to add that Alderman Shull, Alderman Marsh, and Vice Mayor Mallicote voted against putting the aquatic center in the Meadowview area.

Also, it appears that the City of Kingsport does not care about other small businesses by competing with them.  Giving the YMCA the aquatic center to operate and who is not paying for the center, gives the YMCA an advantage over other firms who provide a similar service.

What are your views on this subject?  Leave a comment.

Kingsport, Tennessee Mayor Dennis Phillips had a hissy fit and verbally attacked Alderman Marsh at the August 19, 2008 Board of Mayor and Aldermen that was televised.

Mayor Phillips was very vocal concerning Alderman Marsh’s changing his mind on rezoning an area in downtown Kingsport from manufacturing to general business.  This was a pet project of Mayor Phillips and accused Alderman Marsh who is on the Planning Commission of voting for the zoning change and then changes his mind when the BMA meeting is on TV.

Alderman Marsh stated that he resented the personal attack.  Alderman Shull came to Alderman Marsh’s defense and stated that the personal attack was out of line.  Mayor Phillips stated that maybe the BMA should replace Alderman Marsh on the Planning Commission.

In my opinion, Mayor Phillips needs to check his anger at the door and respect the views and votes of other BMA members.  Just minutes before Mayor Phillips hissy fit, he shut down discussion when a citizen asked if City Manager John Campbell lived in the city.  The mayor stated that personal attacks would not be tolerated, but the mayor needs to apply the personal attack policy to himself also.

All BMA members are entitled to express their views and votes without fear of personal attacks.  Mayor Phillips needs to keep in mind that the members of the BMA were placed there by the voters and they do not report to him.