CHARLOTTE, N.C. -- Charlotte’s plan to sock away money for future, undetermined needs for the Carolina Panthers, beyond $144 million in proposed stadium improvements, has drawn scrutiny from industry experts.
The city has proposed increasing the local prepared food and beverage tax from 1 percent to 2 percent for 30 years, which could raise roughly $1 billion.
City officials have only sketched out how a small portion of that money would be spent, with the debt for the Panthers being paid off in 15 years.
They have said some of the tax revenue could be spent on “long-term flexibility” – meaning a second phase of renovations for Bank of America Stadium in 2028 or possibly a new stadium to replace it.
The Panthers haven’t asked the city for a new stadium in 15 years or for additional renovations in 2028.
UNC Charlotte economist Craig Depken said governments usually focus only on paying for either a new stadium or renovation, not a potential second deal decades in the future. He isn’t aware of a city that has enacted a plan similar to Charlotte’s, where money would be put in reserve for a future request.
“Governments hand over power to the next government,” Depken said. “Locking down millions of dollars for a hypothetical future project? It’s a bit of a head scratcher.”
Depken said having cash reserves on hand could hamper a future City Council in negotiations with the Panthers in 2028 or beyond.
He said it would be like saving $50,000 to a buy new car.
“You walk into the dealer and say you have $50,000 for a new BMW, but you only want to pay $35,000,” he said. “You are going to pay $50,000. It doesn’t help your negotiating.”
The General Assembly still must approve Charlotte’s plan to increase the prepared food and beverage tax, and some legislators have said they are concerned about the size and duration of the tax increase. Two Republicans, including N.C. House Speaker Thom Tillis, have said any Panthers tax increase should be decided by voters in a referendum.
Deputy City Manager Ron Kimble, who is leading city negotiations on the Panthers deal, said he wasn’t aware of a comparable deal to what the city has proposed.
He said in an email: “The City of Charlotte’s strength has always been to look long term as well as short term on capital investments, and also make sure that what we invest in is maintained to an acceptable/sustainable/well cared for standard. That is how we have approached this partnership as well.”
Kimble has said the city would use some of the money to build and improve amateur sports facilities, which can attract large weekend tournaments and thousands of visitors.
So far, the city has only said it would move to renovate Bojangles’ Coliseum into a facility that could handle multiple volleyball and basketball games at once. The city has said it would pay for $35 million of that $60 million project, with the rest coming from a private developer.
Kimble said a list of amateur sports projects is being finalized. Possible projects include a 15-field softball complex; a new or expanded aquatics center; and a 20-court tennis complex along with a championship stadium.
It’s unclear how much those would cost.
Council defends 30 years
In a 9-1 vote last week, City Council endorsed the 30-year tax. Republican Warren Cooksey voted no. Mayor Pro Tem Patrick Cannon abstained due to a possible conflict.
In an interview Wednesday, Cooksey declined to say why he voted against the plan.
“It’s up to the supporters to explain their position,” Cooksey said.
Andy Dulin, the council’s other Republican, has said he opposes all tax increases, including a proposed property tax increase for a capital improvement program for roads, sidewalks, affordable housing and a streetcar, among other items.
He supported giving money to the Panthers, as well as levying the prepared food and beverage tax for 30 years.
“I’m anti-tax increase but I’m pro-Charlotte,” Dulin said.
He added that levying the tax for 30 years “leaves more options open for future mayors and future councils to service needs that we don’t foresee.”
Democrat Claire Fallon said it makes sense to raise money for a second phase of stadium renovations or a new stadium in 15 or 20 years so “a future (council) doesn’t have to go through this all over again.”
Mayor Anthony Foxx, a Democrat, said the legislature could change the city’s proposal. When asked about why the city has pushed for a 30-year tax instead of a 15-year tax, Foxx said having money available for amateur sports was important to get support in the hospitality industry.
Democrat Michael Barnes first voted against the Panthers proposal in closed session in January. He supported it a week ago.
He said he had “concerns” about the tax extending past 2027. But he said he’s “open to the idea” because of the possible opportunities for amateur sports.
Tom Sasser of Harper’s Restaurant Group and the president of the Charlotte chapter of the N.C. Restaurant and Lodging Association wrote Foxx a letter objecting to restaurants and bars providing all of the tax revenue for the Panthers.
Sasser couldn’t be reached for comment Thursday.
Kurt Badenhausen, an editor at Forbes who covers sports business, said Thursday he wasn’t aware of a city financing a stadium renovation, while, at the same time setting aside money for a second phase of renovations or a new stadium.
Author Neil deMause, who wrote a 1999 book “Field of Schemes” that is critical of taxpayer-financed stadiums, said the city of Charlotte shouldn’t be planning to replace or renovate Bank of America Stadium as it is preparing to spend millions to improve it.
Marc Ganis, president of Chicago-based SportsCorp., which has advised NFL teams on stadium renovations, said other cities have done something similar to what Charlotte is considering.
He said tax increases in some cities have overfunded tax reserves that are used for other stadiums.
In San Antonio, he said tax revenues that built the Alamodome also built a new arena in the city. He said a tax increase that built a new baseball stadium in Chicago for the White Sox then helped pay for a renovation of Soldier Field for the NFL’s Bears.