Proposed waterpark might soak Nashville in more debt

Proposed waterpark might soak Nashville in more debt

Bureau Chief’s Note: This is the first in a three-part series about tax incentives Ryman Entertainment may get to build a waterpark in Nashville.

Nashville Metro officials may give away $14 million in incentives so Ryman Entertainment can build what the company’s CEO reportedly calls “a waterpark on steroids” at the Gaylord Hotel.

Metro Council members are scheduled to take a final vote March 7, even though the city already has a popular, privately run waterpark — Nashville Shores.

Assuming the proposed incentive package passes, Nashville Shores will compete for customers against the Ryman’s 217,000-square-foot waterpark, called Soundwaves. No one at Nashville Shores returned repeated requests for comment.

But Ryman officials won’t make Soundwaves available to everyone. To use the park, customers must rent a room at the Gaylord, where a one-night stay ranges from $209 to $339.

Council member Jim Shulman told Tennessee Watchdog in an email he plans to vote against the waterpark. He called it corporate welfare.

Jim Shulman (photo courtesy of Facebook)

Jim Shulman (photo courtesy of Facebook)

“Most people I have talked to thought that they would at least get to use (by paying an admission fee) the waterpark; they don’t even get to do that,” Shulman wrote, saying he believes this new park will drive certain Gaylord guests away from Nashville Shores.

“I can’t think of any reason why government should be using taxpayer money to ‘help’ one business compete against another similar business.”

None of the other 39 Metro Council members returned requests for comment. Staff members in Mayor Megan Barry’s office reportedly orchestrated the Ryman incentive deal. No one in her office returned a request for comment.

Mark Cunningham, spokesman for the Nashville-based Beacon Center of Tennessee, a free-market think tank, also disparaged the deal.

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“I think this is the poster child for the worst example of corporate welfare,” Cunningham said. He said the project, if passed, may very well become Beacon’s Pork of the Year in its yearly Pork Report.

“Yes, I think this will affect Nashville Shores. The government is teaming up with the Gaylord Opryland Hotel to push out the competition, and that is not what capitalism is about.”

Cunningham said this proposal is so bad “it is not defendable by anyone, even people normally good with this kind of thing.”

Mark Cunningham (photo courtesy of LinkedIn)

Mark Cunningham (photo courtesy of LinkedIn)

Perhaps to underscore his point, the incentive deal attracted the attention of the World Socialist Web Site this week.

“The project is only the latest in a long history of handouts from public funds to corporations in Nashville, which heavily promotes its tourism industry,” says an article on WSWS.

“Like cities across the US and around the world, the priorities of the local government express the vast class chasm that exists between the wealthy and an increasingly impoverished working class.”

Assumptions and guesses

Ryman spokeswoman Shannon Sullivan did not answer questions about whether the project is an example of corporate welfare or whether the deal would hurt Nashville Shores. She instead referred to a study written by William Fox at the University of Tennessee’s Boyd Center for Business and Economic Research.

The study estimates SoundWaves would generate 1,287 full-time temporary jobs, $185 million in economic impact and a one-time increase of $8.4 million in state and local taxes during its planned 20-month construction phase.

The study makes many assumptions and guesses about how this would play out. No one at the Boyd Center returned an immediate request for comment about the methodology used to generate their conclusions and how much faith they have in their reasoning.

RELATED — Nashville Metro Council collaborates with hotels to curb Airbnb’s

This isn’t the first time Metro Council members have given privileges to certain hotels that they fail to grant to others.

Shannon Sullivan (photo courtesy of LinkedIn)

Shannon Sullivan (photo courtesy of LinkedIn)

As reported in an exclusive video, three new ritzy hotels in downtown Nashville got $27 million in corporate welfare. Developers are building another posh hotel across the street from the Music City Center, and city officials gave a fourth hotel $4.5 million.

Nashville’s Airbnbs, meanwhile, get taxed the same as hotels but don’t get the same benefits. This is happening as Nashville Metro Council members debate whether to impose licensing requirements that could put some of the city’s Airbnbs out of business.

As for the Gaylord’s proposed waterpark, the Tennessean reports the deal would keep Opryland’s property tax payments flat through 2015 after this year’s reappraisal. Nashville plans to forfeit $1.63 million in annual property taxes the city would have collected from the waterpark.

The paper says Ryman officials will spend $90 million of their own money on the project and that, as part of the deal, company officials must build the park before September 2019.

Contact Christopher Butler at chris@tennesseewatchdog.org

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  • Jeff Coole

    It is amazing to me how journalists that are supposedly knowledgeable about the issues they report on are so clueless and report mostly misinformation. I don’t have a dog in this hunt, but if you don’t understand how property tax freezes work and misinform readers by implying that taxpayer money is being provided to the big greedy corporations, then perhaps you should get another job. This is nothing more than the City agreeing to not increase property taxes for a fixed period of time after the greedy corporation invests $90 million of their money to improve the property, which will increase the property tax base and benefit taxpayers in the long run. If the project never gets built, then there is no tax freeze and also just small incremental increases in the property tax base value assuming some inflation. So in the long run, communities are usually better off in the long run when these deals are made. If you don’t understand that, I suggest you get another job because you don’t have the skills and knowledge to properly report on this.

    Having said that, not all business incentive deals are worthwhile, but property freezes associated with large construction projects are usually pretty favorable for the communities, especially when they are not for too long of a period…and this one looks to only be about 6 years long. It’s a win-win as far as I’m concerned.

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