Whenever You Hear a Politician Tout “Investment” Hide Your Wallet!

From the Tennessean: “Music City Center underperforms in first year

In its first year of operation, the Music City Center convention hall failed to meet projections for hotel bookings, saw its surplus revenue fund drop by nearly $8 million and had its bond rating downgraded.

The convention center’s critics point to those developments as early evidence that the project was an unwise public investment. They say that Nashville’s hospitality industry has been booming because of leisure travelers, and that growth in the segment has masked underlying issues with the center’s operations.

At a cost of $623 million, Music City Center, which opened in May of last year, is the most expensive civic project in Metro’s history. The center, overseen by the city’s Convention Center Authority, also triggered $245 million in public spending for the headquarters Omni Hotel.

The project’s supporters remain confident and paint a different picture of Music City Center. They point to a self-reported economic impact of $125 million through March in addition to a wave of expensive hotel renovations and potential new downtown projects.

Why is reality running far behind projections? I’ll tell you:

Consultants to public projects designed to waste large amounts of taxpayer money (for the benefit of big political patrons) get their contracts by telling those in power what they want to hear… AND there is never a penalty for being monumentally wrong.

Here’s a proposal: Put a clause in every such contract that says if the projections are up to 10% too optimistic, the consultant loses a percentage of their revenue equal to the missed projection. If projections are off 11-20%, they lose 40% of what they billed. A projection off by 21-30%+, and you lose 90% of your billing. Anything over a 30% mistake and you give back every penny you billed.

I guarantee you, projections would be more in line with reality.