Proposed Convention Center's PR Bills Already Over Budget
A NewsChannel 5 investigation is raising questions about spending on Nashville's proposed convention center. The center would be the most expensive project in the Nashville's history.
Our investigative team discovered a major cost overrun with one of the project's first contracts.
NewsChannel 5 Investigates showed council members one of the first contracts for the project. It is with a local public relations firm.
"Either we had it really wrong about the costs we needed or the costs are completely out of control," said council member Emily Evans.
The politically connected firm McNeely, Pigott & Fox agreed to provide public relations services to the Metro Development and Housing Agency, which oversees the convention center project.
According to the original contract, spending was not supposed to exceed $75,000. Months after signing the contract, Metro deleted the "not to exceed" portion.
Now, spending has ballooned to more than $458,000.
"If we're not managing the contracts now where are we going to be $500 million from now?" asked Evans.
MDHA's original plan estimated the public relations work would average less than 30 hours per month, but in the first month Metro paid McNeely, Pigott & Fox for 100 hours of work.
"Frankly, our estimation was too low," said MDHA's executive director Phil Ryan.
So what has the city been paying for?
When convention center backers wanted a positive article in the Tennessean, the firm helped a reporter with a column titled "Sour Economy Shouldn't Spoil Nashville's New Convention Center."
The firm billed the city more than $2,500 for calls and meetings associated with that one article.
When the head of MDHA spoke to the Rotary Club, the firm helped him perfect his speech. The cost was nearly $3,000.
Monitoring local blogs, posting on internet forums, Facebook and twittering cost Metro nearly $10,000.
"Who is managing this contract?" asked Evans. "Who is making sure that the taxpayers are not paying more than they should?"
Investigative reporter Ben Hall asked Phil Ryan,"Do you feel like all of these expenses are justified?"
"Yes," the MDHA official replied.
Bills show two of the PR firm's partners prepared Ryan for a Rotary Club speech at a rate of $285 an hour. On top of that, they billed the city nearly a $1,000 just to attend the speech.
"As I recall, there were 500 in attendance at that meeting, business and community leaders, who wanted to hear about the project," said Ryan.
Council member Mike Jameson was surprised by the spending. "When people say what do you do now that you see the numbers, I don't know what to do other than to say we told you so a few months ago, and I am worried this will carry on."
Council members say this early cost overrun does not bode well for the project.
"This won't be indicative of how the project is run?" Hall asked Ryan.
"There's nothing wrong here," Ryan answered. "Everything is fine, as I said. It's less than three percent of what we've spent to date. That percentage will come down as the project moves forward."
MDHA has spent more than $16 million so far on the convention center project for things like design work. Ryan said the communications part was minor.
Some hotel owners disagree. "It's my money that is funding this convention center with the hotel guests that come to my hotels," said Kirrit Bhakha, owner of four hotels in Davidson County.
Funding for the convention center comes in part from a tax on hotel rooms. Bhakha owns the Alexis Hotel and could not believe the Public relations contract went from $75,000 to more than $450,000.
"That costs us so many thousands, so many nights just to get there. That's atrocious," said Bhakha.
At least some metro council members agree.
"I hope I don't ever see this again," said council member Evans.
We questioned one charge in the stacks of bills the firm submitted to MDHA. The firm admitted it made a mistake on the charge and reimbursed Metro $500.
McNeely, Pigott and Fox said it has not charged the city for more than $30,000 of additional work that it has done on the project.
The council has not given final approval for the convention center project. It has only approved funding for pre-development activities and purchasing the land.
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