Carowinds seeking $900,000 in incentives

Carowinds seeking $900,000 in incentives

Carowinds seeking $900,000 in incentives


by STEVE HARRISON / The Charlotte Observer

Posted on September 12, 2013 at 8:32 PM

CHARLOTTE, N.C. -- The city of Charlotte and Mecklenburg County are considering awarding the corporate owner of Carowinds $922,468 in incentives to help the amusement park add new rides and attractions.

The City Council on Monday night will vote on whether to give Cedar Fair Entertainment about $330,000 over the next three years. The county would contribute just under $600,000.

The money represents a 90 percent refund of new property taxes the park would pay once the $43.5 million expansion is complete. The tax break — known as a Business Investment Grant — has been used by the city for relocations or expansions of other businesses, such as Siemens and Chiquita Brands International.

In the case of Carowinds, there was no threat that the successful park was considering moving.

But Brad Richardson, the city’s economic development director, said the Sandusky, Ohio-based corporate owner was considering two of its smaller parks for expansion: Carowinds and the King’s Dominion theme park in Virginia.

“We wanted that investment at Carowinds,” Richardson said.

Cecil R. Harris, the county administrator of Hanover County in Virginia, where King’s Dominion is located, said he wouldn’t comment on incentives for the park.

But he said he believes King’s Dominion will continue to expand.

“They have continued expansion plans here,” Harris said. “How that fits into the negotiation with Charlotte I don’t know.”

The idea behind Charlotte’s Business Investment Grant is to attract an employer that makes a large capital investment, which spins off dozens of hundreds of well-paying jobs. That was the case when the city and county gave more than $7 million to Siemens in 2009 and 2010, in exchange for 1,065 new jobs and 1,480 jobs retained.

In offering Carowinds incentives, the city is focused more on the impact to the hospitality industry. The city said Cedar Fair wants to increase Carowinds attendance from 1.9 million to 2.5 million, which the city estimates will translate into an additional 20,000 hotel room nights annually.

Hoteliers in Mecklenburg usually sell about 5 million hotel room nights a year.

It’s unclear how many of the new projected hotel room nights will be booked in Charlotte or in South Carolina. The theme park straddles the state line.

The expansion won’t generate a large number of full-time jobs, however. The city said it estimates the expansion will create 15 new full-time jobs with an average salary of $43,000.

Richardson said the 15 jobs didn’t meet the city’s threshold for Business Investment Grants of having at least 20 new jobs created. But the city estimates that 270 seasonal jobs will be added, with an hourly wage between $8.10 and $8.25.

“It rose to the level of council’s assent because of the seasonal jobs,” Richardson said.

The theme park’s footprint is in both N.C. and S.C. The city’s analysis showed that $33 million of the $43.5 million in improvements will be in Mecklenburg County. The city’s incentives were calculated on which rides would be built in N.C. and subject to local property taxes.

After three years, Carowinds would pay its full property tax bill to the city and county.

Cedar Fair Entertainment had $1.068 billion in revenue in 2012, and net income of $102 million, according to its annual financial report on its Web site.

York County, S.C. has offered Cedar Fair subsidies for years, said Mark Farris, who works in economic development for York County.

“We treat them like any other business,” Farris said.

He said the amusement park has gotten a property tax reduction of roughly 40 percent for “decades.”

Richardson said he aware of any other Charlotte tax breaks until now.

Republican City Council member Andy Dulin said he is looking at the Carowinds incentive package “like any other economic development incentives.”

He added: “Tourism dollars are good dollars. The long-term viability of Carowinds is a big deal to our community.”

The City Council gave tentative approval to the grant in a closed session meeting June 24.

On Aug. 26, Cedar Fair announced it would improve Carowinds with new rides and attractions, new food and improved infrastructure.

At the time, Richard Zimmerman, Cedar Fair’s chief operating officer, declined to give the Observer specifics about the plans. He said: “I ride everything we build, and I can’t wait to ride what we’re going to build at Carowinds.”

Cedar Fair in 2011 announced it had bought 61 acres of vacant land next to Carowinds, whose 337-acre property straddles the North Carolina-South Carolina state line. The new property is next to Carowinds’ current parking lots and near Interstate 77.

Zimmerman said work on the expansion will begin in 2014 and unfold over several years.

In the face of stubbornly high unemployment, the city has loosened its requirements for businesses to get the Business Investment Grants.

The previous requirement for the grants was that the new jobs pay at or above the region’s median wage, which is about $44,000. But in an effort to attract manufacturers, the City Council last year said that a grant recipient only meet the average for the type of businesses they are in.

The change was meant to attract manufacturers. At the time, city staff said they didn’t think it would be used for restaurants, shopping centers or entertainment centers.

In February, the City Council approved $5.1 million in property tax rebates for a new outlet mall planned for southwest Charlotte, along Interstate 485. That money — to be paid over 10 years — is to reimburse the developer for new roads for the mall.

Council members considered the Carowinds request five months later in a closed session. The council is expected to vote on the matter in open session Monday.

County Commissioners will consider the request from Cedar Fair Tuesday.