ORDINANCE NO. BL2017-589

An ordinance authorizing The Industrial Development Board of The Metropolitan Government of Nashville and Davidson County to negotiate and accept payments in lieu of ad valorem taxes with respect to the Opryland Hotel and Convention Center, amending Ordinance No. BL2010-727 to extend the period for allocating certain hotel taxes to the funding of the cost of flood-related repairs and renovations to the Grand Ole Opry House and authorizing the Director of Public Property Administration to accept the donation of two parcels of property (Parcel ID Nos. 06213012700 and 06213012800) for use in the Metropolitan Government's public park system (Proposal No. 2017M-011PR-001).

WHEREAS, The Metropolitan Government of Nashville and Davidson County (the “Metropolitan Government”) is vitally interested in the economic welfare of its citizens and wishes to provide the necessary leadership to enhance this area’s capabilities for growth and development; and,

WHEREAS, the provision of jobs to area citizens by local business is both necessary and vital to the economic well-being of the Metropolitan Government; and,

WHEREAS, pursuant to the Industrial Development Corporations Act, currently codified at Tenn. Code Ann. §§ 7-53-101 through 316 (such act, as heretofore or hereafter amended, referred to as the “Act”), the General Assembly of the State of Tennessee (the “General Assembly”) has authorized the incorporation of public corporations known as “industrial development boards” in municipalities in the State of Tennessee (the “State”); and,

WHEREAS, the Industrial Development Board of The Metropolitan Government of Nashville and Davidson County (the “Board”) has been duly organized and incorporated in compliance with the Act; and,

WHEREAS, the General Assembly has found and declared that the Board is performing a public function on behalf of the Metropolitan Government and that the Board is a public instrumentality of the Metropolitan Government; and,

WHEREAS, the Supreme Court of Tennessee (the “Supreme Court”) has found that the Board is an agency or instrumentality of the Metropolitan Government; and,

WHEREAS, the Act expressly incorporates by reference the statement of public policy set forth in Section 3 of Chapter 209 of the Public Acts of 1955; and,

WHEREAS, Chapter 209 of the Public Acts of 1955 states that the declared purpose of the Act is to do that which the State welfare demands and that which the State public policy requires to alleviate the problems of unemployment, to raise family income, to provide a means by which the citizens of the community may promote and develop industry in their area so as to obtain a balanced economic development highly essential to the welfare of the State, and to promote the development of commercial, industrial, agricultural, and manufacturing enterprises by the several municipalities so as to be given local benefits peculiar to each and general benefits to the entire State; and,

WHEREAS, the General Assembly also has declared that the purposes of the Act include maintaining and increasing employment opportunities by promoting industry, trade, and commerce by inducing manufacturing, industrial, financial, service, and commercial enterprises to locate or remain in the State; and,

WHEREAS, the Supreme Court has held that the purposes of the Act include the promotion of industry and the development of trade to provide against low wages and unemployment and that such purposes are public in nature; and,

WHEREAS, the Board is empowered pursuant to the Act to acquire, whether by purchase, exchange, gift, lease or otherwise, and to improve, maintain, equip and furnish, “projects” (as defined in the Act), and to lease such projects to others; and,

WHEREAS, RHP Hotels, LLC (“Ryman”), a subsidiary of Ryman Hospitality Properties, Inc., owns the Gaylord Opryland Resort and Convention Center, a major hotel and convention center within the boundaries of the Metropolitan Government (the “Project”); and,

WHEREAS, Ryman has announced its intention to construct a $90 million addition to the Project in the form of an indoor/outdoor waterpark (the “Waterpark Addition”); and,

WHEREAS, according to an economic impact study prepared by Dr. William F. Fox at the University of Tennessee’s Boyd Center for Business and Economic Research, the $90 million Waterpark Addition is projected to significantly benefit the economies of the Metropolitan Government and the State of Tennessee by generating (i) during its construction, 1,287 temporary jobs, $185 million in economic impact, and a one-time increase of $8.4 million in state and local taxes, and (ii) upon completion and stabilization, 699 full time jobs, $57.1 million in annual economic impact, and an annual increase of $4.6 million in state and local taxes; and,

WHEREAS, according to Dr. Fox's study, the Gaylord Opryland Resort and Convention Center currently generates an annual economic impact to the Tennessee economy of $866 million, including a total employment impact of 9,725 jobs, and $70.7 million annually in state and local taxes; and,

WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305, all properties owned by the Board are exempt from ad valorem taxation in the State of Tennessee; and,

WHEREAS, pursuant to Tenn. Code Ann. § 7-53-305(b), the Metropolitan County Council (the “Council”) has the power to delegate to the Board the authority to negotiate and accept from its lessees payments in lieu of ad valorem taxes, provided that such payments are in furtherance of the Board's public purposes; and,

WHEREAS, the benefits to the Metropolitan Government of the expansion of the Project by the construction of the Waterpark Addition within the boundaries of the Metropolitan Government, and in the exercise of its powers above, will provide an opportunity for the Board to acquire, by purchase, exchange, gift or lease, property that will be used with respect to the Project and the Waterpark Addition, to lease that property to Ryman, and to enter into an agreement with Ryman to accept payments in lieu of ad valorem taxes with respect to the property; and,

WHEREAS, the Board may only negotiate and accept payments in lieu of ad valorem taxes with authorization from the Council; and,

WHEREAS, it is in the interest and welfare of the citizens of the Metropolitan Government to delegate authority to the Board to negotiate and execute a payment-in-lieu-of-tax agreement with Ryman; and,

WHEREAS, pursuant to Ordinance No. BL2010-727 (the “Original Ordinance”), the Council dedicated and restricted revenues generated by the Additional Hotel Occupancy Tax collected in the Gaylord Tourism Development Zone (as such terms are defined in the Original Ordinance) to the payment to Gaylord Entertainment Co. (the predecessor to Ryman Hospitality Properties, Inc.) for the purpose of reimbursing certain expenses related to the repair and renovation of the Grand Ole Opry House due to damages directly caused by the May 2010 flooding disaster; and,

WHEREAS, the Original Ordinance provided that such payments would cease to be authorized after July 1, 2025; and,

WHEREAS, revenues generated by the Additional Hotel Occupancy Tax collected in the Gaylord Tourism Development Zone are not projected by July 1, 2025 to fully reimburse Ryman for the initial costs incurred by Ryman to repair the Grand Ole Opry House; and,

WHEREAS, Ryman has incurred additional costs in the renovation of the Grand Ole Opry House to prevent damage from future flooding disasters; and,

WHEREAS, the Council wishes to amend the Original Ordinance to extend the period during which the Additional Hotel Occupancy Tax collected in the Gaylord Tourism Development Zone would be paid to Ryman in reimbursement of Grand Ole Opry House repair and renovation costs, and to include as costs that may be reimbursed therefrom the additional costs incurred in the construction of flood prevention structures at the Grand Ole Opry House; and,

WHEREAS, in consideration of the Metropolitan Government's approval of the payment in lieu of tax agreement described herein and the amendment of the Original Ordinance, and pursuant to the terms of the document attached hereto as Exhibit B, Ryman proposes to donate to the Metropolitan Government two parcels of property located at 2400 McGavock Pike (Parcel ID Nos. 06213012700 and 06213012800) (the "Properties"); and,

WHEREAS, the Properties will provide public boat access to the Cumberland River and adjacent public parking and, as such, the Properties are well suited for use in the Metropolitan Government's public park system; and,

WHEREAS, acquisition of the Properties is in the best interest of the citizens of the Metropolitan Government.

NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1: That the Council of the Metropolitan Government finds that the Board’s acceptance of payments in lieu of ad valorem taxes with respect to the Project and the Waterpark Addition is in furtherance of the Board’s public purpose of maintaining and increasing employment opportunities, as set forth in Tenn. Code Ann. § 7-53-102, and the other public purposes described above.

Section 2: That the Metropolitan Government hereby delegates to the Board the authority to negotiate and execute an agreement for payments in lieu of real property taxes with respect to the Project and the Waterpark Addition for a period of up to nine years, beginning with the 2017 tax year. The amount of the payments in lieu of real property taxes that shall be required with respect to each year of that nine-year period shall be equal to the lesser of the Standard Tax or the 2017 Property Tax Payment (as such terms are defined below). Notwithstanding the foregoing, if the Waterpark Addition is not substantially complete on or before September 30, 2019, the payment for each subsequent year of the nine-year period will be 100% of the Standard Tax (as defined below).

Section 3: That the term “2017 Property Tax Payment” shall mean the amount of ad valorem property tax that Ryman would have been required to pay with respect to the 2017 tax year with respect to the real property that is then subject to the payment in lieu of tax arrangement authorized hereby if Ryman held legal title to such property for ad valorem property tax purposes.

Section 4: That the term “Standard Tax” shall mean the amount of ad valorem property tax that Ryman would be required to pay with respect to a given tax year with respect to the real property that is then subject to the payment in lieu of tax arrangement authorized hereby if Ryman held legal title to such property for ad valorem property tax purposes. Ryman shall be entitled to any and all exemptions, credits, refunds, etc., to which it otherwise would be entitled were it the holder of legal title to the Project, and permitted to challenge the assessment of any real property that is then subject to the payment in lieu of tax arrangement authorized hereby in the same manner as if Ryman held legal title to the Project for ad valorem property tax purposes.

Section 5: (a) That the payment in lieu of tax arrangement authorized by this Ordinance shall apply to all real property comprising a portion of, or used at or in connection with, the Project, including the Waterpark Addition.

(b) That the payment in lieu of tax arrangement authorized by this Ordinance shall apply to all land, easements or other property rights, buildings, improvements, fixtures, construction in progress, and other real properties of any nature comprising a portion of, or used in connection with, facilities located on the property described above. Subject to the terms of the payment in lieu of tax agreement providing for an adjustment in payments as a result of certain expansions of the facilities located on the property described above, such arrangement shall apply to such facilities and such properties in their current scope and configuration and to all replacements, enhancements, additions, expansions, and improvements to such properties and facilities.

Section 6: That the final version of the payment in lieu of tax agreement authorized by this Ordinance shall be in substantially the form attached hereto as Exhibit A, together with such changes that do not alter the material terms hereof as may be approved by the Board, and must be approved as to legality by the Department of Law of the Metropolitan Government prior to being executed by the Board. Without limiting the foregoing, the agreement shall contain DBE and workforce development provisions in substantially the form included in the form of agreement attached hereto as Exhibit A.

Section 7: That the Original Ordinance is hereby amended as follows:

(a) Section 2 of the Original Ordinance is revised by adding the following after the word “disaster”: “or to prevent damage from future flooding disasters; provided that the five percent per annum interest rate shall not accrue with respect to such flood prevention expenses”.

(b) Section 4 of the Original Ordinance is revised by changing the date therein from July 1, 2025 to July 1, 2031.

(c) Section 6 of the Original Ordinance is revised by the adding the following sentence to the end thereof: “Notwithstanding the foregoing, Gaylord Entertainment Co. may certify the actual itemized expenses related to costs incurred in the construction of flood prevention structures at the Grand Ole Opry House at any time on or before December 31, 2017 in a report delivered to and accepted by the Director of Finance, which report shall be made available to the Council upon receipt.”

Section 8: That following and conditioned upon the effectiveness of the payment in lieu of tax agreement described above, the Director of Public Property Administration is hereby authorized to accept the proposed donation of the Properties and to receive and record such documents as may be necessary to carry out their acquisition.

Section 9: That all ordinances or resolutions, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed.

Section 10: That this Ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Jeff Syracuse, Nancy VanReece, John Cooper, Angie Henderson, Burkley Allen

View Exhibit

LEGISLATIVE HISTORY
Introduced:	February 7, 2017
Passed First Reading:	February 7, 2017
Referred to:	Planning Commission - Approved Budget & Finance Committee Convention, Tourism, and Public Entertainment Facilitites Committee Parks, Library, and Recreation Committee Planning, Zoning & Historical Committee
Passed Second Reading:	February 21, 2017 - Roll Call Vote
Passed Third Reading:	March 7, 2017 - Roll Call Vote
Approved:	March 8, 2017
By:

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