Mayor John Cooper announced a new deal with the Music City Center to transfer $12.6 million in payment in lieu of property taxes annually to the Metro Nashville general fund on Thursday morning.
The new tax donation will be used to close “holes in the budget,” he said.
“This is recurring revenue and can be the basis for pay increases (for Metro staff),” Cooper said. “It is recurring revenue based on the same general tax rate that exists in Nashville.”
He said the funds will be used for a variety of purposes.
State law does not require government-owned property to pay property taxes, so this payment in lieu of those taxes is calculated to equal property taxes the convention center would otherwise pay.
The announcement was made at the Music City Center.
Nashville Mayor John Cooper announces new deal with Music City Center to boost the Metro budget Thursday, Oct. 10, 2019 (Photo: Yihyun Jeong / The Tennessean)
“During the campaign I talked about the need for tourist dollars to serve residents and today we are receiving a welcome dividend on our biggest investment in downtown,” Cooper said.
Nashville Electric Service similarly remits a payment in lieu of property taxes.
This payment is in addition to $10 million the city will receive two years in a row, per an agreement made this year with former Mayor David Briley.
At-large Councilman Bob Mendes said he studied MCC’s budget and believes it could contribute up to $15 million more to Metro’s budget. The center captures a significant share of tourism dollars downtown.
“If you really wanted to push the convention center authority, there’s another $10 mililion to $15 million,” Mendes said. “The convention center is limited on what they can spend money on because there’s a high stack of bond payments and they’ve got hotel and motel taxes that (can only be spent in certain ways).”
This story will be updated.
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