NASHVILLE, Tenn. (WTVF) — It's a windfall for the East Bank.
State lawmakers just directed hundreds of millions of dollars to the East Bank to cover infrastructure costs, using a massive $300 million surplus originally intended for the convention center.
When tourists buy $12 beers or expensive boots on Broadway, most of that sales tax money does not go to Metro's General Fund to pay for teachers, fire, or police protection.
Instead, it goes into the Tourism Development Zone (TDZ), which was created in 2009, to pay for the Music City Center.
Former Council member Emily Evans was on the Metro Council in 2009, when the new convention center was approved.
She said she remembers that Metro officials worried the facility might not be able to pay for itself, so Metro created a TDZ around the convention center.
Most sales taxes from that zone were diverted to cover the cost of the convention center.
"I was one of the strongest objectors to this. It was just silly," Evans said. "We took the safest route we could, which is, let's make this thing as big as possible."
The TDZ spans more than 2 square miles, with a boundary shaped like a key.
It includes part of the Gulch and stretches all the way down West End Avenue past Centennial Park to Interstate 440.
Only a few businesses are excluded.
Speaker of the House Cameron Sexton, said Metro drew the zone, but the state also gave up sales tax revenue within it.
After years of collecting state and Metro sales taxes, the fund has a $300 million surplus.
When asked on Inside Politics if he was surprised by the size of the zone Sexton responded, "Yeah we were shocked."
Sexton and the Tennessee Legislature decided to spend the surplus on the East Bank, but they did not want the Metro Council and the mayor to control the funds.
"Metro is not going to control that money, even if it was dedicated for the East Bank. That money had to go directly to the East Bank Authority for them to be able to handle that for infrastructure and capital projects," Sexton said.
Sexton sits on the East Bank Authority Board, which will now decide how to spend the money.
He said last year the board had no real power, but it now oversees $300 million for the East Bank.
The funds could help pay for infrastructure projects, including lowering the James Robertson Parkway Bridge and installing underground utilities for the Tennessee Performing Arts Center.
East Bank officials said the money ensures projects are completed more quickly.
NewsChannel 5 Investigates asked East Bank CEO Ben York what it would mean if they were not receiving this money.
"The pace of development slows," York said. "The option to have additional funds to create those infrastructure pieces is absolutely critical."
The legislature also allowed some of the surplus convention center money to bail out bars and businesses on lower Broadway who say they cannot pay their increased property taxes.
"They've invested a lot of money in lower Broadway, all these bars and all these restaurants and everything.We want to make sure they stay in business," Sexton said.
A separate board will make decisions about whether to bail out property owners.
Evans opposes the moves.
She said the zone is too large and removes too much tax money from Metro's General Fund.
"If we hadn't done this that money would be available for police and fire and schools and so forth. But it's not. That's why it's bad tax policy," Evans said.
