NASHVILLE, Tenn. (AP) - Nashville Mayor Karl Dean wants to give certain hotel tax funds to Gaylord Entertainment Company to help rebuild the flooded Grand Ole Opry House.
Dean said Thursday that the proposal, if approved by the Metro Council, would redirect funds gathered through a 1% hotel tax that was being set aside for a planned expansion of the Gaylord Opryland Resort. Gaylord owns the Opry House as well.
After the May flood, Gaylord asked for assistance from the city to use those funds to reimburse the cost of rebuilding the iconic country music theater.
Gaylord officials estimate damage to the Opry House could cost up to $20 million. The tax generated from the Gaylord hotel is about $1.2 million per year, and the legislation would allow Gaylord to receive that money for 15 years.
Dean announced the legislation from the stripped down stage of the Opry House, which originally opened in 1974 and has been creating country music stars for decades.
"The Grand Ole Opry is known as the show that made country music famous and I would contend that it is also the show that made Nashville famous for our country music," Dean said.
Dean said the move is not a new tax and would not take funds out of the city's general tax funds.
The hotel tax was adopted in 2007 to help fund a new downtown convention center. At that time, the portion collected just from Gaylord Opryland Resort was set aside for an expansion. The planned expansion was put on hold during the economic downturn and those funds were never used. Dean said so far $1.6 million has been collected.
The Opryland hotel generates a fourth of tax revenue from hotels and motels in the city.
The legislation would require that Gaylord would have to submit a detailed accounting report on what repairs and renovations were made to the Opry House before reimbursement.
In addition, Dean wants the council to pay $200,000 for the Nashville Convention and Visitors Bureau to develop a marketing plan to promote other businesses nearby, such as restaurants and souvenir shops, while the hotel remains closed.
"Helping the Opry reopen is not about just helping one business, or one entity," Dean said. "It will help numerous businesses in this area and the hotels and restaurants that benefit from the visitors that come for the Opry experience."
Colin Reed, the chairman and CEO of Gaylord Entertainment Co., said the closure of Opry House and the hotel is having a significant impact on the community, including employee layoffs and canceled conventions.
Reed said the renovations won't just restore the resort and Opry House to the state they were in before the flood, but fundamentally improve them.
"We will be spending tens of millions of dollars improving the suites of the hotel, our rooms and restaurants and the upgraded Opry House will be tremendous," he said.
The Opry is scheduled to reopen by Oct. 1. The hotel and convention center is expected to be open by Nov. 15 and Reed noted that they are already taking reservations for 2011.
Phil Claiborne, a Metro Councilman who represents the Opryland area, said he expects the first reading of the proposed legislation will happen this month with a second, more detailed discussion in August.
"I think it's something they will ultimately approve," he said. "Gaylord is a key component of what happens in Music City."
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