“They say it won’t cost taxpayers anything but that’s wrong,” Alex Buhler, Ward 1 Lebanon City councilor said Thursday.
Buhler voted against the two ordinances which would move the process of planning the park along.
Ward 6 Councilor Kathy Warmath said she was really unsure what to ask at this stage, but that she was glad Ward 3 Councilor William Farmer got the council to add the $60 million bond limit to the ordinance. Warmath voted in favor of the two ordinances as did Farmer and the other three councilors, Ward 2’s Kevin Huddleston, Ward 4’s Joe Hayes and Ward 5’s Haywood Barry. Is there another Park like BPU anywhere?
No. Bible Park USA will be a unique tourism attraction because of its high quality, point of view and investment level. Other Bible-oriented tourism attractions in the U.S. are much smaller in size and scope, are ministry-based and have a mission to proselytize and convert, unlike BPU. The growing faith tourism market, now estimated at $10 billion annually in the U.S. alone, is seeking destinations that are high quality, broadly based and family-friendly, according to the World Religious Travel Association (www.religioustravelassociation.com). Why does Bible Park USA need any assistance from local governments to make the project work?
It is common for very large economic development and tourism-generating projects like BPU to engage in a public/private partnership to make the idea a reality. For example, the Nissan corporate headquarters in Williamson County, the Pyramid in Memphis, the Sommet Center in Nashville, the new Bellevue Mall project in Nashville, and many others across this state, the region and the country are structured similarly, with the private sector responsible for the majority of the project’s financing.
Buhler said he had contacted officials of the county in South Carolina where Hard Rock Park which recently filed bankruptcy was built and officials there informed him that Hard Rock had no city or county funds involved. Hard Rock Park was co-developed by Armon Bar-Tur of Safe Harbor, the company that originally proposed building the Bible Park in Rutherford County.
Likewise, he pointed out that all the financing for the Nashville Superspeedway here in Wilson County was all developer-financed. What is Bible Park USA asking of the City of Lebanon and Wilson County?
First, we are asking for the use of the increased property taxes generated by building the Park to help fund approximately 8 percent of the Park through a State law called tax increment financing. Right now, the proposed Park site pays approximately $2,300 in annual property taxes. Once the Park is built, the property tax bill will grow to approximately $1.7 million. We are asking for the use of the difference between $2,300 and $1.7 million for a period of time to help offset some of the costs of constructing the park.
Second, we are asking for the ability to collect a privilege tax to help fund an additional 24 percent of the Park. That tax is paid only by people who come to the Park and spend money on tickets, food/drink and souvenirs at the Park, and is in addition to the current sales tax rate required by law. This is similar to a hotel/motel occupancy tax that is currently collected in Wilson County and in many places across the U.S.
In both cases, these funds will be used to secure bonds that will help fund the cost of the Park. These non-recourse bonds will be backed by any necessary credit enhancements from the developer, and all of the risk will fall entirely on the bondholders and the developer. By law, there will be no risk to the city, county, or the IDB (Industrial Development Board).
The large majority of the Park----some 68 percent of the monies needed----will be funded with private investment. At no time will the City of Lebanon, Wilson County or the taxpayers be liable or responsible for any portion of the Park’s financing, ever. This fact is verified by the State of Tennessee and local legal counsel with the City of Lebanon, Wilson County and the Industrial Development Board.
Warmath’s comment about this aspect started with a question about how much those bonds would cost investors since they would be high interest investments, but she also said they would be considered high risk bonds.
Why do you say the name of the Park is a “working title”?
Once the design detail stage is underway in 2009, the developer will review the name of the Park. The name has been a working title since the Park’s inception, though many final aspects of the Park, including the name, will not be fully determined until the Park is sited. How does the bankruptcy and financial restructuring of Hard Rock Park in Myrtle Beach, SC, affect Bible Park USA? Why did that Park fail?
Not in any way. Entertainment Development Group, the developer and operator of Bible Park USA, has no connection to Hard Rock Park. There is one investor that is the same in both projects and that is Safe Harbor Holding. Safe Harbor is one investor of many in Bible Park USA and will assist with attracting private investors to the project.
Industry reports state that Hard Rock Park will reopen in 2009 after restructuring its finances. The combination of a down economy, tight credit market and beach location created a difficult operating environment for a project launch of this magnitude. The Park is touted as a quality experience by theme park industry experts and visitor evaluations alike, and is expected to do very well over the long term.
Warmath and Buhler both said they had heard several conflicting stories about who the backers for Hard Rock actually were. But Buhler added that the developers themselves had first said Hard Rock was an example of what they could do and later denied any connection.
But Warmath pointed out that part of the problem with the Hard Rock Park may have been location. “It was 20 miles from Myrtle Beach,” she said. “This park would be right in town and easy access to I-40.”
She said she thought that probably meant that the two were not really comparable.
Why do you believe 1.1 million people will come to the Park in its first year?
In order to adequately size and spec a tourist attraction, it is necessary to determine its projected number of visitors. The Park’s development team considered information from a variety of sources in developing attendance projections, including the area’s growing regional tourism results, the number of religious-based conventions in the Nashville area, population, the lack of a regional themed attraction, the number of tourists and travelers along the I-40 corridor, the number of visitors at local attractions today, attendance at similarly sized themed attractions across the U.S., the growth of the world faith tourism market and other similar factors in analyzing and determining its target. Then, the team discounted the expected number to provide a conservative estimate. Rob Wyatt, developer, says the attendance number is “very conservative, and a number I believe we will exceed.”
Buhler said that he voted against the proposed park not because he wouldn’t like to see it become a reality, but because he didn’t trust the figures given by the developer.
“They say we have to do this before they can give us hard figures. I say give us hard figures first,” he said “I just don’t agree with the economic impact study. It was based on their figures and done by people who were paid by the developer.”
Warmath said there had been some discussion about the city possibly floating the money to pay for an independent study maybe from Vanderbilt University.
Staff Writer Connie Esh may be contacted at email@example.com