Nashville ready to compete with Atlanta

NASHVILLE – Reba McEntire serenades shoppers at the downtown Walgreens. Tim McGraw’s twang emanates from metal-covered speakers at busy intersections. Honky-tonk bar bands and sidewalk buskers compete for the attention of passersby along Broadway.

Nashville is making a lot of noise these days, but nowhere is the buzz greater than at the Music City Center convention hall, which opened last month. Shaped, in part, like a guitar and with – you guessed it – country music wafting through the 1.2 million square foot building, the center aims to play against the big boys for convention business, Atlanta in particular.

“As affectionately as I can say it, my intent is to kick their ass,” Butch Spyridon, CEO of the Nashville Convention and Visitors Corp., said of Atlanta. “Somebody is going to lose; somebody is going to get hurt. I would think we would be more competitive than they might want to acknowledge.”

The $623 million Music City Center is like the latest country music industry heartthrob who coyly promises fun. Nashville targets well-established Atlanta, New Orleans and Orlando – the major Southeastern convention destinations — for the medium-sized conferences that increasingly pay the bills.

Industry experts in Atlanta and beyond don’t expect the Music City Center to unduly harm Atlanta’s $11 billion convention and tourism business. Mark Vaughan, chief sales officer for the Atlanta Convention and Visitors Bureau, said Nashville’s “shiny new penny” can’t make up for Atlanta’s advantages in hotel rooms, direct flights and recreational amenities.

But the entire convention industry is facing the music these days. Convention attendance has been basically flat since before the recession. And, between 2000 and 2011, cities have added 35 percent more convention space. San Diego, Los Angeles, Seattle and Cleveland are either expanding or planning to expand their convention centers.

“You have all these cities doubling and tripling down on their convention center bets,” said Heywood Sanders, a Texas professor whose book “Convention Center Follies” will be published later this year. “And it all turns out to be an arms race where nobody wins.”

And the competition gets more heated every year. Cities dole out millions of dollars in incentives to lure conventions. Atlanta, for example, recently got legislative approval to boost its convention recruitment fund by $6 million.

“Playing in a league with Atlanta’

Nashville has parlayed its country music cachet into a bustling tourism industry and New South prominence. The Grand Ole Opry, the Ryman Auditorium, the Country Music Hall of Fame and the honky-tonks draw hundreds of thousands of visitors annually.

The city has added professional football and hockey teams, new hotels, restaurants and condos to its downtown mix. It even has a prime-time TV show named after it, something Charlotte and other Atlanta wannabes can’t claim.

“Country music is great for Nashville and enormously popular, but I don’t think Nashville is just country music,” said the city’s mayor, Karl Dean, a collage of Neil Young photos on his office wall. “The Kings of Leon, the Black Keys and Jack White live here. We’ve also got opera and huge ties to bluegrass and gospel. We’ve got everything.”

The Music City Center, undulating over six city blocks, is three times the size of the city’s old meeting hall. It offers 350,000 square feet of exhibit space – one third the amount in Atlanta. Conventions, though, attract fewer people these days and the Music center’s 60 break-out rooms serve as a potent lure.

A songwriter’s hall of fame, and the curved-wood main ballroom that evokes the innards of an acoustic guitar, add to the center’s music-themed allure.

“This is a pretty place to come to,” said D.B. Gwin, an Arkansas retiree visiting Nashville last week. “Traffic is not near as bad as Atlanta and anybody can find something to do. I’d rather come here than Atlanta.”

Gwin had just toured the Music Hall of Fame, which is undergoing a $100 million expansion, across the street from the convention center. The hall will soon connect to a $250 million, under-construction Omni hotel.

Spyridon, with the visitors’ association, touts Nashville’s “driveability,” or the proximity to Midwestern and Eastern convention-goers. The Music center allows Nashville to compete for three out of every four conventions, he adds. And, by parlaying the city’s renown as a health-care capital, the more lucrative medical association conventions now have Nashville on their radar.

The American Heart Association, for example, will bring 5,000 conferees to town in early 2015. The Academy of Nutrition and Dietetics will bring 12,000 people to Nashville in 2015, a year after its Atlanta conference.

“We’re now playing in a league with Atlanta. We couldn’t before,” said Charles Starks, the Music center’s CEO. “So for a show that wants to be in the Southeast every three years, they’ve got a new opportunity to explore. And we think we’re a very attractive option.”

Atlanta not rolling over

Not everybody is convinced. Atlanta, home to the nation’s fourth largest convention center, offers three times as many downtown hotel rooms and six times as many airline arrivals and departures as Nashville. The slew of convention-friendly amenities, including the aquarium, World of Coke, Turner Field and Phipps Plaza, outpaces Nashville’s, industry experts say.

“Smart meeting planners know better than to say, ‘Wow, this is so beautiful, look at all the cool things here,’ and not pay very much attention to what they need to do to make a meeting work well,” said Joan Eisenstodt, a Washington, D.C.-based planner. “Nashville is still mainly known for the Grand Ole Opry so, in a sense, Nashville is competing with itself.”

Earlier this month, the World Congress Center and the Georgia Dome hosted one of the city’s largest gatherings this year, 35,000 Primerica convention-goers who were expected to pump $25 million into the local economy. Yet Vaughan, with the Atlanta convention authority, adds that the Congress Center is also aggressively pursuing smaller-sized conventions that Nashville has set its sights on.

Cities nationwide scramble for every convention-goer’s dollar. Industry attendance was already flat before the recession; during the downturn it dropped an additional 25 percent nationwide.

In fiscal 2007, for example, attendance at the World Congress Center hit an all-time high of 1.6 million people. Four years later, it dropped to 1.1 million. Technology — teleconferencing, webinars, Skype — made it easier for bosses to nix the annual trade show or convention.

Emily Evans, a Nashville council member and a former municipal bond underwriter, voted against public financing for the Music City Center when she learned about the supply-demand mismatch.

“There was this extraordinary increase in available convention space without a commensurate increase in the number of conventions,” she said. “Nashville is a really cool place, but it still comes down to event planners having to deliver the most cost-effective option to their clients, and that may not be Nashville.”

The city floated a bond (backed by hotel, rental car and other fees) for the Music Center and provided a series of tax breaks and other incentives worth more than $125 million to build the Omni. The city also got legislative approval to raise an additional $1 million annually in sales taxes to help lure conventions.

In Georgia, Fulton County recently added an extra penny to the hotel/motel tax, which should raise about $6 million annually to help attract trade shows and conventions.

Cities “will offer free rent or reduced rent or subsidies for local transportation. Or, in some cases, they will offer you just cash because they’re desperate,” said Sanders, who teaches at UT San Antonio. “Nashville, like its competitors, will continue to offer incentives and throw money away in hopes that they will somehow be the big winner, an outcome that appears unlikely at best.”

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