Back in November I did this analysis of what was then the preliminary financing structure for the convention center. A few weeks ago we got the final preliminary financing structure and it turned out as expected. Taxpayers co-sign the majority of debt and stand ready to make up shortfalls using what are called non-tax revenues.
Also, as expected, the administration produced a feasibility study by HVS (complete with math errors) that predicted taxpayers will never have to be called upon to make good on the debt. The offering document that accompanied the financing program, however, tells a different story. It says stuff like this (emphasis added):
Although the Issuer believes that the expectations reflected in the APPENDIX D • “HVS MARKET STUDY” are reasonable, there is no assurance that those expectations will be achieved. Inevitably, some assumptions used to develop the forecasts will not be realized, and unanticipated events and circumstances may occur. Therefore, the actual results achieved during the forecast period will vary, and the variations may be material.
The collection of Tourism Tax Revenues in the amounts projected herein (see “HVS MARKET STUDY” herein) is affected by and subject to conditions which may change
in the future to an extent and with effects that cannot be determined at this time, including, without limitation:
· the failure to complete or a delay in completion of the construction of the Convention Center
· the failure to construct or a delay in the construction of a headquarters hotel
· general and local economic conditions that affect the convention industry and/or the Nashville convention market
· competition from other convention centers in
Nashville and in other cities
The statements contained in this Official Statement, and in any other information provided by the Issuer, that are not
purely historical, are forward-looking statements, including certain statements in “Appendix D – Market Study” and
other statements regarding the Issuer’s expectations, hopes,
intentions, or strategies regarding the future. Readers
should not place undue reliance on forward-looking statements.
While I know that these statements are addressed to investors, they should be heeded by issuers as well. If a buyer of our convention center bonds should not rely on the HVS study to protect their investment neither should my constituents rely on it to protect their general fund.