Inside MeadowView's history and how it operates today

KINGSPORT — When Kingsport residents went to the polls in 1992, they voted overwhelmingly to invest in something their city didn't have at the time: a full-service hotel and convention center capable of hosting local events and bringing new business and tourism to the region. "Looking back at the conceptualization of MeadowView, it began as a grassroots effort of our citizens," said Kingsport Assistant City Manager Michael Borders. "Kingsport Tomorrow formed a task force in 1990 that ultimately proposed building a multi-purpose convention center with an adjoining hotel," he said. "The facility would host meetings and banquets for local use and attract conventions and trade shows, driving tourism and economic impact for Kingsport." The proposal, which increased the local sales tax by one-quarter of a cent, passed in the 1992 special election by a margin of more than two to one. That vote jump-started one of Kingsport's largest public-private partnerships to date with Eastman Chemical Co., which guaranteed construction and operating loans totaling $15 million for the $39 million project. The complex, located between Interstate 26 and Wilcox Drive, opened in 1996 and includes the Marriott hotel and Meadows Restaurant (owned by Eastman Chemical Co.), as well as the convention center and Cattails golf course (owned by the city). Several upgrades have taken place at the facility, including two major expansions. In 2008, MeadowView completed a $15 million expansion and renovation of the hotel portion of the resort. In January 2011, it opened the executive conference wing — a $15 million expansion on the interstate side of the property that included a 5,400-square-foot ballroom, two amphitheaters and two executive boardrooms. How it operates today While the city owns the convention center and golf course, Eastman owns the hotel portion and the restaurant. Under a 2012 Qualified Management Agreement, Marriott International manages the entire property. That agreement is set to expire in 2027. "While we own the property, we pay Marriott to operate it," Borders said. Under the agreement, Marriott manages the day-to-day operations of the conference center, which includes hiring staff, marketing events, setting prices, maintaining the property and handling finances. The agreement adds that Marriott should consult the city on any major operational changes. "In accordance with the provisions of this agreement, the manager agrees to consult with the owner with respect to any major changes in the manner of operation of the conference center and prior to any substantial renovations," the agreement states. The management agreement also requires quarterly meetings between the city and Marriott. At the city's request, the general manager and other senior staff at MeadowView must meet with city officials at the Conference Center to review the facility's performance and address any issues. "...The purpose of the meetings shall be to discuss the performance of the Conference Center and other related issues, including any variations from the Business Plan for the preceding quarter…," the agreement states. The property is governed by a 1995 Permanent Easement Agreement, which grants Eastman and its guests a right of passage through the conference center. In return, the city agreed to maintain the property as a conference and golf facility. The city also receives a 2% share of the hotel's gross room revenue. "The two percent of the gross room revenues essentially pays us for their easement — it's the access fee for hotel guests to use our property," Borders said. "It's designed to offset those costs, including the restaurant, because while they operate it, we own the land and the building it sits on." If Kingsport fails to maintain the golf course, Eastman may take over operations but must also assume all associated costs, according to the agreement. Borders explained that MeadowView's costs are split between Eastman and the city based on an established allocation formula. For example, administrative and general costs are divided 60/40, and accounting costs are often split evenly, as well as sales and marketing expenses. MeadowView receives a yearly subsidy from the city to cover the cost of its operations, with the money coming out of the regional sales tax — the tax originally established back in the early '90s to cover the cost of the construction of the facility. This year's subsidy is projected to reach $1.3 million, the highest on record. In past years, the subsidy has ranged from roughly $450,000 to just over $1 million.