Most Music City Center contract money goes out of state

More than 85 cents of every dollar being spent on the Music City Center construction job is going out of Middle Tennessee, with out-of-state firms winning the six largest contracts.

But project leaders say two-thirds of the money has wound up back in the region’s economy as subcontractors have hired hundreds of local firms to help them do the work while buying much of their material here, as well.

“Sixty-six percent of every dollar we spend ends up coming back,” senior project manager Larry Atema said at a convention center authority meeting Thursday. “You can’t buy air handlers here. But you can buy concrete.”

After the new convention hall was sold to the public and the Metro Council as a local economic stimulus, questions arose early in the project about 90 percent of the construction money being awarded to out-of-state companies. Newer data show the percentages haven’t changed much over the past year.

A procurement log indicates that more than 93 percent of the approximately $350 million that will be awarded for construction items or packages has now been spent. Of the $326.7 million awarded to date, just $48.2 million has gone to Middle Tennessee-based subcontractors. (An additional $10.8 million has been awarded to two Memphis companies.)

A slight majority of the 42 contracts awarded so far have gone to Middle Tennessee firms: 21 in Nashville and one in Spring Hill. But the largest of those awards has been $11.6 million to Acousti Engineering for ceiling work, while six larger contracts, each worth $17 million to $51.9 million, have gone to companies from Georgia, Indiana, Maryland, Michigan and Missouri. Those top half-dozen contracts account for more than$210 million by themselves.

Elbert Holbert, business manager for the Operative Plasterers’ and Cement Masons’ International Association’s Local 909, said the numbers are disturbing. He said his union’s members haven’t been able to get work laying concrete for the 1.2-million-square-foot, $585 million facility, the biggest construction project Nashville has ever seen.

Ceco, a St. Louis-based company, won a $42.5 million structural concrete contract from Bell/Clark, the project’s general contractor.

“We didn’t get any of it,” Holbert said. “I’ve got men who haven’t worked for three years.”

Metro Councilman Robert Duvall, who voted against the project 20 months ago, said he’s disappointed that more of the money isn’t staying in Nashville and Middle Tennessee.

“If they say 66 percent is coming back, that’s better than 15 percent,” Duvall said. “But I’d rather it be much, much higher than that. I think taxpayers would prefer that more of the money stay with our friends and neighbors.”

But Atema and others working on the project say the big contract numbers are misleading.

Holly McCall, the convention center authority’s spokeswoman, said there were no local bidders for the painting, ceramic tile, millwork and window washing jobs, which are worth more than $11 million combined. The only Tennessee bidder for the $39.5 million structural steel job was from Knoxville.

“There aren’t a lot of companies that do some of this stuff,” McCall said. “Nashville is not a known center of steel production work.”

But much of the money in the steel contract has still trickled down to Middle Tennessee. The local ironworkers union has worked with a Minnesota steel erection firm, which is working, in turn, with Indianapolis-based Lenex Steel Co., which won the steel fabrication job.

Also, subcontractors and the companies they contract with are required to post bonds as insurance against the possibility that they won’t complete the work. Some of them simply don’t have the financial wherewithal to put up the amounts needed for the work that has to be done, officials said.

“Sometimes it’s just the nature of the beast as to what they can financially support,” said Patrick Holcombe, a project manager for the convention center authority.

Holcombe said several factors go into choosing the best firm for a particular job. They include cost, the time it will take to do the work, bonding capacity, projected local participation and use of minority-owned businesses.

“We don’t always have the luxury of picking the local guy,” he said.

Holcombe provided a list of 317 local firms working with each of the prime subcontractors, including about 75 associated with Ceco, the structural concrete subcontractor. Ceco expects to spend 84 percent of its $42.5 million contract on local materials, labor and equipment, according to the procurement log.