Natchez Convention Center expansion sought

Published 12:11 am Wednesday, April 9, 2014

NATCHEZ — The City of Natchez is considering a proposal to fund a multi-million dollar expansion to the Natchez Convention Center by raising tourism taxes.

Natchez Convention Center Director Walter Tipton and New Orleans Hotel Consultants President Warren Reuther presented a proposal for a $3 to $4 million expansion to the Natchez Board of Aldermen at its Tuesday meeting.

Tipton and Reuther first made the proposal for an expansion to the city-owned center in March 2013 to the mayor and city officials.

Email newsletter signup

Tipton said Tuesday the expansion was planned for when the center was first built.

“Everyone we talked to said, ‘If you’re successful, you better plan for an expansion,’” he said. “So here we are.”

Tipton said after the meeting preliminary plans include increasing the 3-percent lodging tax to 4 percent and the 1.5 percent restaurant tax to 2 percent to pay off a bond that would be issued to fund the expansion.

The increase in tourism taxes would require approval by the Legislature and the signature of the governor.

Mayor Butch Brown said the proposal was not ready for the Legislature in time for the session that recently ended. He said one should be ready in time for next year’s session or a special session called before then.

The exact increase has not been thoroughly discussed or determined, Tipton said. Preliminary plans don’t include increasing the $2 hotel and bed-and-breakfast occupancy tax, Tipton said, but that is not completely off the table.

Tipton said the idea is that the expansion of the convention center, a tourism entity, would be funded by money generated by tourism.

The city has also been working with convention center officials and city financial adviser Demery Grubbs to look at restructuring the debt owed on the convention center so the center’s expansion could be funded through a new bond that would include debt from the original convention center bond and new debt.

The restructured plan would involve a bond that includes the debt from the original convention center bond and new debt from an expansion, Brown said.

“(The city would) enter into a new arrangement … that would generate enough money to retire (the) total debt restructured in a shorter term than would be required for us to retire our (current) debt now,” he said.

Ward 3 Alderwoman Sarah Smith said she was concerned the $12 million bond issued for the convention center in 1999 still has approximately $9.8 million left to pay.

City Clerk Donnie Holloway said for the past 14 years, the city has mainly paid off the interest on the bond and not the principal.

The restructured bond would be set up similar to a house note, Tipton said, so that each payment would reduce the principal amount of the debt.

Brown said after the meeting the interest-rate swap transaction executed in 2006 and a subsequent modification to the complex transaction complicated the structure of the debt. Brown has said he believes the swap transaction was a mistake on the city’s part.

Reuther presented the board with figures that show the events, attendees, days the center has booked and the direct economic impact of the center has increased significantly since his company took over management of the center in 2007.

That is evidence, he said, an expansion is needed for the convention center.

“So the center is the locomotive that drives your hospitality (industry) here in Natchez,” Reuther said.

The expansion would duplicate the center’s Nashville Room and add 20,000 more square feet of exhibit space as well as other features. The expansion would extend the building from Main Street to Franklin Street.

In other news from the meeting:

-The board gave Community Development Director James Johnston permission to schedule a public hearing for the application for a Community Development Block Grant to fund the construction of an approximately $930,000 satellite senior center. The grant would require a $477,180 match from the city, $350,000 of which would be cash and the rest in-kind services.

-The mayor and board met in executive session for more than an hour with Natchez Regional Medical Center CEO Donnie Rentfro, NRMC board member John Serafin, NRMC board chair the Rev. LeRoy White, NRMC attorney Walter Brown and Adams County Attorney Scott Slover.

Walter Brown said Mayor Brown asked him to meet with the board of aldermen to give them an update on the sale of the county-owned hospital.

Mayor Brown said after the meeting “the city is in the county” and wanted to keep the board informed of events that would affect city taxpayers, such as the hospital sale.

After the hospital discussion, the board also met in executive session with Natchez Inc. Executive Director Chandler Russ and Natchez Inc. board member Sue Stedman.

-The Rev. Clifton Marvel appeared for the board on behalf of the Natchez chapter of the National Association for the Advancement of Colored People to express the chapter’s frustration with the lack of a “cohesive and holistic” recreation program for children.

The mayor and board members expressed frustration at what they believe is not an equal buy-in from the Adams County Board of Supervisors.

The board asked Marvel to also present his concerns to the board of supervisors.

-The board recognized Some of This & Some of That home décor store on East Franklin Street as Business of the Month.