Following a protracted battle on funding, Nashville's Metropolitan Council last month approved 29-9 the $585 million Nashville Music City Center, slated to open in February 2013. MeetingNews senior editor Jay Boehmer this month spoke with Nashville Convention & Visitors Bureau president Butch Spyridon about how the new center will propel the city into a higher-tier convention market .
MeetingNews:What size meetings do you see as the sweet spot for the Music City Center?
Butch Spyridon: We see that in the range of 5,000 to 6,000 attendees, and probably 2,000 to 3,000 peak rooms.
MN: How does that compare with the convention center that Music City Center will replace?
Spyridon: The average size group of what we've booked is double the average size of what's been in our current facility—and that's being conservative on the new business and generous on the existing business in terms of size.
MN: What's your demand outlook for 2013?
Spyridon: I feel very good about a strong first-year opening, which is a relative statement. I don't know of another market that took as much of a risk as we did in the pre-sell, and we put some terms on the table, financial penalties on us. We read the trades and we talk to cities and clients. We know who got burned and who opened without meeting projections. It's a ramp-up, and it will be in our case too. But trying to minimize any slow start was important to us, and I think we've accomplished that.
MN: Are you adding resources to lure meetings to Nashville?
Spyridon: We expanded our staff leading into the recession, and it was intentional. We saw the downturn coming, but we didn't see how big it was. We felt good about the convention center, so we increased our staff around late spring of 2008 to help us sell. We're probably going to wait until summer or fall, but we'll need to strengthen our sales staff again, because we're obviously tripling the size of our existing building.
MN: Can you peacefully coexist with the Gaylord Opryland Hotel and Convention Center?
Spyridon: We still have Opryland in the mix, and we need to make sure that remains successful. We sell both. They're in Davidson County, but they're a member and a partner, and we need both Opryland and Music City Center to be successful. There's minimal overlap, and there are significantly different markets. We expect them to be every bit as successful as they've always been, and we expect the new facility to capture the business that we've had to turn down or wouldn't look at.
MN: How much group business did you have waiting for the vote before they would sign?
Spyridon: We pre-sold the building and, really starting in March 2008, we asked the mayor if we could talk to groups, putting all the responsibility on us. We had some pre-approval offers, and we put some penalties on us if we didn't meet some benchmarks. We booked 26 groups—280,000 room nights and approximately $80 million in visitor spending for 2013 and beyond. We have some business that goes out as far as 2021—some multiyear deals, but we have the first group in late February 2013.
MN: Did last month's final project approval put your group sales efforts into high gear?
Spyridon: We have a whole list of prospects that were extremely interested but wanted final approval. One was the American Institute of Steel Construction, and right at the same time as the vote, the American Animal Hospital Association. It almost passed in the night—the contracts getting signed and the vote happening at the same time.
MN: Who is the first group?
Spyridon: The American Choral Directors Association, which fits with Music City. Then over the course of the first month or so we have the Hearth, Patio and Barbecue Association and the American Trucking Association—those are some good, significant groups already on the books.
MN: What markets are you competing against now?
Spyridon: It's interesting. In the '90s, we saw our direct competition as San Antonio, Dallas, New Orleans, Atlanta and Orlando. In the early 2000s, as we really outgrew our building, we saw a shift to markets more like Indy, St. Louis, Charlotte. Now—with the exception of Indy because of everything they've built—we're seeing a shift back to the Orlando, Atlanta, Dallas, San Antonio and New Orleans markets.
MN: Do you now consider yourself up against some of those top-tier conventions destinations?
Spyridon: Except for the super-size groups—that was never who we wanted to target. We have a great base of business in medical, education, religious markets and then even the trade organizations like hearth and patio and trucking.
MN: There are also plans to open the adjacent Nashville Medical Trade Center in 2013. Does that play a supporting role in the success of Music City Center?
Spyridon: I think it really helps us in the medical meetings market, because it elevates our presence. The medical mart puts a stamp on Nashville's reputation as a healthcare center, and the new center allows us to capture the business that was too big for us.
MN: Local opposition was concerned that the public must act as a financial backstop if the center doesn't hit its numbers. Can you prove the naysayers wrong?
Spyridon: Our projections are conservative, and I think our advanced bookings are an overwhelming testimony to the demand in the market. I look forward to showing the doubters—and not to be in-your-face—but prove that this is a good destination that has a lot of pent-up demand. Marketed right, the city wins. It was a small, well-funded, very smart opposition group, and we know there would be questions, and rightfully so. It's a big project, but it was a protracted battle that probably went on longer than it should have.
MN: What other kinds of supporting infrastructure do you need to make the case for groups to consider Music City Center?
Spyridon: We need the convention center hotel. I don't have any doubts about that as a priority, and that work is going on as we speak in terms of the financing package. We have a partner, we have a developer and we have the demand. Phelps Portman is the development team out of Atlanta and Marriott Marquis is the flag that's identified right now. The lending market was such that we would prefer to do it without public financing. It will certainly be a public-private partnership, but now the medical mart and the final approval for the center make an even stronger case.
MN: New rental car taxes and hotel surcharges will help fund Music City Center. Are more such fees to come?
Spyridon: Some don't start generating revenue until the building opens, but all of the funding is in place. Now that approval is here, we're finishing the plans and starting to move some dirt.
MN: What kind of targets have you set?
Spyridon: There were two goals: one was 100,000 room nights before groundbreaking. We'll be at 300,000, so we exceeded that goal. Our secondary goal is a million room nights on the books before we open the doors. My staff cringes when I say that, but I'm on record. We've got three years, and we'll get it done.
Originally published Feb. 15, 2010