Carolina Panthers’ stadium tax may leave extra cash for Charlotte

Carolina Panthers’ stadium tax may leave extra cash for Charlotte

Carolina Panthers’ stadium tax may leave extra cash for Charlotte

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by STEVE HARRISON / The Charlotte Observer

WCNC.com

Posted on January 16, 2013 at 11:42 PM

CHARLOTTE, N.C. -- The Charlotte City Council is considering doubling the prepared food and beverage tax to help renovate Panthers stadium, but would the hike have to be so big?

The city has a reserve of unspent money designated for the Charlotte Convention Center.

In addition, the proposed tax increase – a hike in the food and beverage tax from 1 percent to 2 percent – would probably generate more money than the city would need to pay back new debt for the Panthers.

The team has asked the city for $125 million to renovate Bank of America Stadium. The team told council members in a closed session meeting Monday night that the total cost of renovations would exceed $200 million, and that it will probably also ask the state for financial help.

Council members gave an early endorsement Monday night to the plan. They voted 7-2 in closed session to see if the General Assembly would support an increase in the prepared food and beverage tax, bringing the total dining tax to 9.25 percent.

As council members debate helping the Panthers, the city’s Convention Center fund has received little attention, according to council members. Historically, the council has not closely examined Convention Center finances.

Two years ago, the city’s annual debt payment on the Convention Center was $22 million. For this fiscal year, that payment has fallen to $15.9 million, because old debt has been retired.

The city and the Charlotte Regional Visitors Authority, which manage the center, haven’t said how they plan to spend the extra money.

But some may already have plans for it:

• CRVA chief executive Tom Murray has said the city would be able to land more conventions and large events with a 1,000-room hotel. He has said that hotels of that size aren’t built without public subsidies, but no formal plan has been presented to the city.

• Center City Partners, an uptown think tank and booster group, has proposed expanding the Convention Center.

The center, since it opened nearly 20 years ago, has fallen far short of projections for bookings. Murray has pledged to try to improve performance and land more conventions.

Deputy City Manager Ron Kimble, who handles economic development issues, said Wednesday he couldn’t comment on the closed session about the Panthers.

In response to a question about using Convention Center funds for stadium renovations, Kimble said by email: “The City and CRVA continue to believe that existing taxes should be committed to the existing uses described, because there are unfulfilled needs for the convention center’s future.”

The current Convention Center undesignated money – $4.64 million, according to the city budget – isn’t enough to cover debt payments on the Panthers’ $125 million renovation request. But it could lessen the need for such a large tax increase.

Under current state law, those dollars are limited to the Convention Center. The General Assembly would have to amend the legislation to allow that money to be spent on Bank of America Stadium.

Last year, the City Council used money dedicated for general tourism to contribute to a new uptown baseball stadium for the Charlotte Knights. That, however, was for a much smaller request of $8 million.

No hotel tax hike

Some council members expected city staff to recommend hiking the county’s hotel/motel tax, which is mostly paid by visitors. But council members said staff told them it believes the tax is already too high, at 15.25 percent.

It was raised by two percentage points last decade to pay for the NASCAR Hall of Fame.

The total sales tax for hotel rooms in Wake County, for instance, is 12.75 percent.

City staff instead turned to the prepared food and beverage tax, which was enacted in Mecklenburg more than 20 years ago to pay for the Convention Center.

Lynn Minges, president of the N.C. Restaurant and Lodging Association, said her group generally supports special taxes on hotel rooms, so long as the money is reinvested for tourism. But she said her group opposes meal taxes.

“The longstanding position remains that they will oppose all new and expanded prepared food and beverage taxes,” Minges said. “That’s been the policy for many years.”

She said a new meal tax hasn’t been passed in the state in 15 years.

A citywide increase in the tax would generate about $18 million or $19 million a year, according to council members who attended Monday’s meeting.

If the city gave the Panthers $125 million, it’s unclear what Charlotte’s annual debt payment would be.

That would depend on factors such as the city’s interest rate and the length of the city’s loan. For instance, the city’s annual debt payment for the NASCAR Hall of Fame is $9.7 million. That covers about $130 million in debt.

Some council members told the Observer the city has said there could be extra money for additional projects, possibly a renovation of Bojangles’ Coliseum. The city has proposed converting Bojangles’ into an amateur sports complex.

Any increase in the food and beverage tax would need to be approved by the General Assembly. The Charlotte City Council would then vote in open session to enact it.

“When we get the formal request from the city to move forward, then we’ll tackle it,” said state Sen. Malcolm Graham, a Democrat who chairs the Mecklenburg delegation. “I’ve got to know what the details are, so I have not come down on it one way or another.”

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