The city of Charlotte and the Carolina Panthers have reached a deal in which the city would contribute $87.5 million for scaled-back renovations to Bank of America Stadium in exchange for a six-year “hard tether” to keep the team in Charlotte.
The city’s economic development committee unanimously voted for the deal Wednesday afternoon, and the full City Council is expected to approve the proposal Monday night.
Wednesday’s agreement was more modest than the city and Panthers originally envisioned.
The first proposal was that the Panthers would spend $250 million to renovate the stadium, which opened in 1996. Under that plan, the city would contribute $125 million for stadium improvements along with $18.75 million in annual payments over 15 years for stadium maintenance and traffic control costs.
The state would have paid $62.5 million. The Panthers would have spent $62.5 million for stadium improvements and $15 million for maintenance.
For that, the Panthers would have been bound to Charlotte for 15 years.
But the deal was contingent on the General Assembly approving an increase in the local prepared food and beverage tax.
Legislators rejected that tax increase. Instead they gave the city flexibility to use money from its existing Convention Center fund. Gov. Pat McCrory and legislative leaders also declined to give the team any state money.
Thwarted by Raleigh, the city then created a plan that gives the Panthers less money.
In exchange, the city only gets a firm six-year commitment that the Panthers stay in Charlotte. The deal also has what the city has characterized as a four-year “soft tether” after that. In those four years, the team has agreed to stay in the city, though it would be relatively easy for the Panthers to move in years 7 through 10 of the deal.
Panthers president Danny Morrison, who attended the meeting, said he considers it a 10-year agreement to keep the Panthers in Charlotte.
“The best tether of all is (majority owner) Jerry Richardson,” Morrison said after the meeting. “He loves the Carolinas. We think this is a 10-year tether.”
The short length of the firm commitment to Charlotte could mean the City Council will negotiate with the team again, as soon as after the 2016 season, when Bank of America Stadium will be 23 years old.
Morrison said it would be “premature” to speculate on whether the team would consider a new stadium at that point. He said Wednesday that he believes Bank of America Stadium can last many more years, due to what he called its “classic design” and attractive landscaping surrounding it.
He said with technology improvements the team is planning, the stadium “can have a long life.”
He also said the scaled-back renovations would make Bank of America Stadium equipped to host a Super Bowl. But the city might not have enough hotel rooms to host the event, he said.
Morrison said renovations will begin immediately after the next season.
Escalators, new technology
The first phase of renovations will include escalators to take fans to the upper deck, costing $28 million.
The Panthers will also spend $30 million in new video boards, ribbon boards and improving the stadium sound system.
The team also plans to spend $25 million on stadium infrastructure, which includes HVAC systems. The team said it will also spend $12.5 million on concourse improvements.
Morrison said it’s possible the team could build terraces on the upper deck concourses to give fans a view of uptown skyscrapers.
But a number of projects won’t move forward because the team has less money than planned. Among the projects that have been cut: $29 million for club seats and suite improvements; $30 million for a new practice facility; and $16 million for larger entry gates, a larger ticket office and a new team store.
Richardson has said he would never move the team from Charlotte. But city officials are worried that a new owner might move the team to Los Angeles, in part because the Panthers have no contractual tie binding them to the city.
“It is scary to think we do not have a tether,” said Deputy City Manager Ron Kimble.
The tentative deal says that if the Panthers attempt to leave before the completion of the 2018 season, the city is entitled to seek an injunction before a Mecklenburg Superior Court. If the injunction is not granted and the team leaves, they would pay a penalty.
That penalty would be $75 million if they leave after the 2013 season. It would decline by $7.5 million after each additional season.
In years 7 through 10 of the agreement, the Panthers would have to pay the city $37.5 million to leave. That penalty would decline by $7.5 million after each season. Or instead of a financial penalty, the city would have the option to buy the stadium for $1.
The Panthers and the city have said that local taxpayers got a relatively good deal when the team first came to Charlotte.
The city and county spent $60 million for land and infrastructure improvements for the $187 million stadium, which was built with private money and from the sale of Permanent Seat Licenses.
Other cities with NFL teams have also made similar stadium renovations, with the amount of public money ranging from 57 percent public money (Green Bay) to 73 percent (Buffalo). In Charlotte, taxpayers would pay for 67 percent of the money slated for the stadium’s $112.5 million renovation.
The Convention Center fund is based on two hospitality taxes: A three percent tax on hotel and motel rooms, which is mostly paid by visitors; and a one percent prepared food and beverage tax mostly paid by locals.
Convention Center needs
If the city gives $87.5 million to the Panthers, the city’s Convention Center fund will have $11 million left for new projects.
The center was last expanded in 2010, when the Crown Ballroom opened with the NASCAR Hall of Fame. But Charlotte Regional Visitors Authority chief executive Tom Murray has said the 17-year-old center would likely need some renovations, including new bathrooms.
It’s unclear if the $11 million remaining would cover those improvements.
Kimble said the city might have to ask the General Assembly for more money in the future, for additional renovations at Bank of America Stadium or the Convention Center.
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