A debate between a mayoral challenger and the office’s incumbent has started over proposed plans for the Cumberland Center in Lebanon.
Development of the Cumberland Center is under way near Interstate 40 with a Logan’s Roadhouse restaurant approaching completion and site work completed on the new RCC Western Store. In all, plans call for about 1 million square feet of retail and about 500,000 square feet of office space for the new development.
In a press release sent recently to The Democrat, mayoral candidate Robert “Bob” O’Brien said he supports business development concepts like the Cumberland Center, but they are best handled in the private sector.
“Governments, particularly city governments, should not get involved in private investment programs to the point where the government becomes the primary promoter of the project,” O’Brien said. “I am totally in favor of growth and development for Lebanon, but not at the expense of denying the city and county general funds between $5 million and $6 million a year in growth revenue from sales tax and property tax increments for 20 years, which is what the current mayor’s plan would do.”
Though development is under way, plans to add a $40 million event center has, so far, failed to get off the ground. In January, a resolution asking the state Legislature for formal approval for zoning for the event center failed to garner two-thirds’ approval by the Lebanon City Council. As such, plans remain on the drawing board.
But Mayor Philip Craighead doesn’t want to see the plans remain dormant. Late last month, Craighead organized a meeting between city and county leaders, along with state and federal transportation and government officials to gain advice on applying for and securing grant money for the project, as well as others. Ultimately, Craighead wants to tie the Music City STARR railway into the Cumberland Center plans and create another stop along the Lebanon-to-Nashville route. Trains park overnight about a mile from the development.
“The plans for the future civic center hinges on the developer’s ability to attract future retail space, dining options, hotel and office space,” Craighead said. “The developer, Vastland Realty Group, has already placed more than $2 million in infrastructure and, by the first quarter of 2013, will have created about 150 jobs with more coming for the east side of town.
Craighead said the developer has committed to donate more than 20 acres of prime property, estimated at between $5 million-$7 million in value, for the event center.
“The authority will have the ability to capture the new increase in property tax and the local share of sales tax to fund this project,” Craighead said. “No construction on the civic center will start until sufficient revenues are being generated to cover the bond expense of the center.
“The money generated goes to the citizens of Lebanon and Wilson County, through the Entertainment Authority, in the form of a multipurpose event center, which will create jobs and revenues and a unique identity for Wilson County.”
But O’Brien said he wants to see what studies have been done to support Craighead’s claims the civic center will bring significant economic impact to Lebanon.
“What kind of jobs are we talking about?” O’Brien asked. “How much would they pay? Would they pay enough for people to make a decent living? Where are the studies? Who will benefit from this endeavor – the citizens of Lebanon or a relatively small cross-section? Will businesses outside the development area see any economic benefit, or is it just designed to promote the development?”
Craighead said the timing is not right for studies.
“We do not need a financial study to set up a savings account,” Craighead said. “As I have always said, the money generated will pay for the studies, which will be needed in the future. But let’s not spend money on something today, which would probably be required later. This is a pay-as-you-go project.
“As for the need of studies, I have always advocated that a feasibility study should be done closer to the time when we are pursuing funding for the civic center itself. It is always better to run your estimates on concrete numbers and fewer projections. If the studies say wait, then we wait, never getting ahead of what we are able to achieve and pay for.”
O’Brien said he has done extensive research into the national development craze for civic and convention centers, as well as the proposed Tourism Development Zone law in Tennessee.
“The TDZ law in Tennessee would have to be significantly amended by the General Assembly before Lebanon could put into place the mayor’s plan to pay for the civic center,” O’Brien said. “According to my research, virtually every section of Tennessee Code Annotated Section 7-88-103, which is the definitions section of the Convention Center and Tourism Development Financing Act of 1998, would have to be modified for Lebanon to qualify for TDZ status. Do we have any commitments from our state legislators to support these amendments?”
Craighead admits law changes will need to come before the state approves the civic center, but he’s optimistic those changes can come.
“This plan is innovative and intriguing,” Craighead said. “It will require changes in sections of the TCA law, but the process of making changes in governmental law is the process and right that communities use to achieve the improvements and progress they desire.
“With the assistance of the Greater Nashville Regional Council and Dennis Huffer, who has played a major role in writing Tennessee TDZ laws and has aided Lebanon and Wilson County in developing our proposed legislation, we have drafted legislation which will achieve our goals. Commitments from our state legislators to move this legislation forward has been committed to us, if presented with two-thirds’ support of city council and county commissioners.”
Additionally, O’Brien expressed concern about the project possibly placing a burden on the citizens, “because if the TDZ fails to generate enough taxes to cover the debt service, then the city would have to make up the difference,” O’Brien said, referencing a Jan. 29, 2009 “Report on the Convention Center and Tourism Development Financing Act” by the Department of Revenue and Comptroller of the Treasury.
“This report specifically spells out that a local government could be responsible to make up any shortfalls in local sales tax revenue projections,” O’Brien said. “On page 5 of the report, it reads as follows: ‘When TDZ incremental local sales tax increases do not meet projections, local governments must fund the debt service from other available revenues. This could cause a negative impact on other programs and/or result in a tax increase.’”
Craighead said the city and county cannot be exposed to the financial liability because of pre-existing laws that pertain the creation of the TDZ, which provide a buffer protection to the participating cities against any shortfall.
“The key to success is in the proper planning and funding of a project of this magnitude is to provide adequate funding dollars on the front end,” Craighead said. “Our plan provides for three separate funding mechanisms, which will ensure a high degree of project success, along with providing jobs and additional revenues for our community. This plan is basically a plan setting up a big savings account for our future.”
O’Brien said the same report said the loss of sales tax could negatively impact school systems, quoting, “Sales tax is a major source of growth revenue for school systems. Lack of growth in sales tax not only negatively impacts operating budgets but also hinders a school system's planning ability.’”
O’Brien said this is because state education funding formulas include the taxes dedicated to paying off TDZ projects like the civic center. As a result, the local school systems could see a decrease in the state's Basic Education Program funding.
O’Brien said Wilson County is ranked first in the state for kindergarten through high school new construction under the Public Infrastructure Needs Inventory, according to the Tennessee Advisory Commission on Intergovernmental Relations website regarding Wilson County.
“Given this fact, can we really ask the county to give up half of $5 million to $6 million a year for 20 years in new growth money?” O’Brien said. “I realize supporters of the Cumberland Center will argue that if we don’t do anything, we won’t have anything, and I get that. But I feel like there are other ways we can spur economic growth.
“We should focus our energies on cleaning up our city’s finances, its infrastructure and build a favorable image as a city government that is well run, unified and efficient. We do not need to throw money at the business community to get them to invest here. Government should not be in the business of providing services that private enterprise can do better.”
“This type of philosophy and lack of business knowledge and recruitment would hinder our ability to attract Fortune 500 Companies, such as Amazon.com, along with the mom-and-pop businesses, which are the backbone of our community.
Craighead said he agrees with O’Brien that government shouldn’t be in the business of providing services that private enterprise can do better.
“But as a leader, you need to be able to recognize that public-private partnerships in some instances can work much better,” Craighead said. “Not only working better, but also achieving the goal where if the public partner is not involved the benefit to the community would never have been achieved.
“Our community needs a jumpstart. The jumper cables needed to achieve our goals are projects of this nature, as well as others yet to be identified.”