Save Money in this Sunday's paper

comments

City OKs $87.5M Panthers stadium deal

More Information

  • Tax relief

    The Panthers plan to spend $112.5 million on improvements to Bank of America Stadium, which Mecklenburg County assesses for tax purposes at $135 million.

    The improvements, which include new escalators, video boards, a sound system and HVAC units, could add hundreds of thousands of dollars to the team’s city and county tax bill.

    To give the Panthers property tax relief, the city will own the new property that it buys for its contribution of $75 million. If the city leases the property to the Panthers for a minimal amount, that would be a below-market lease and would also be subject to property taxes.

    The solution is for the city to lease the property to the Panthers at a market-rate price, which isn’t taxable. The city will then pay the Panthers an annual fee – about the same as the lease payment – to maintain the property.

    The city sometimes offers grants, or property tax rebates, to companies that expand or relocate in Charlotte. The city can offer a grant up to 90 percent of the new property taxes a company would pay, for a certain amount of time. But the private company owns the new property . Steve Harrison


  • Timeline on stadium renovation deal

    It has taken several months – and several detours – for the Panthers and the city of Charlotte to reach a tentative deal to keep the team in Charlotte in exchange for $87.5 million in public money.

    • Fall 2012: Mayor Anthony Foxx sends Panthers owner Jerry Richardson a letter inviting him to present stadium renovation plans to the City Council. Foxx suggests the city would be open to helping the team financially.

    • January 2013: The city and the Panthers meet in closed session. The Panthers ask for $125 million from the city for capital improvements. City staff proposes increasing the prepared food and beverage tax from 1 percent to 2 percent for 30 years, which would raise $1 billion. City staff said some of the money could be used for amateur sports and possibly for a new stadium in 2028. City Council votes 7-2 to support the proposal.

    • January: The Observer reports that the city’s existing Convention Center fund has enough money to fund much of the city’s $125 million commitment for capital improvements.

    • February: The Mecklenburg legislative delegation rejects the city’s request to increase the prepared food and beverage tax from 1 percent to 2 percent for 30 years. They later reject a city proposal to increase the food and beverage tax by a half-cent for 15 years.

    • March 4 : Gov. Pat McCrory and legislative leaders say they can’t give the Panthers the $62.5 million in state money that the team requested.

    • April 11: The General Assembly approves a bill that would allow the city to use money from its Convention Center fund for the Panthers. It doesn’t allow the city to increase the prepared food and beverage tax.

    • April 17: City Council’s economic development committee votes 4-0 to support giving the Panthers $87.5 million in exchange for a six-year firm commitment to stay in Charlotte.

    • April 22: City Council voted to approve the deal.

    Steve Harrison



After seven months of negotiating, the Charlotte City Council voted 10-0 Monday to approve giving the Carolina Panthers $87.5 million to help renovate Bank of America Stadium in exchange for a six-year “hard tether” to keep the team in Charlotte.

The Panthers, who will contribute $37.5 million to the stadium project, plan to install escalators, new video and ribbon boards and make other improvements to the 17-year-old stadium.

The terms of the agreement are the same as those approved by the council’s economic development committee Wednesday.

But in an interview with the Observer on Monday, the city acknowledged the deal has complicated provisions designed to lessen the team’s property tax bill.

Charlotte City Attorney Bob Hagemann said the Panthers are concerned that the improvements could cost the team hundreds of thousands of dollars in new city and county taxes.

To help the team, a deal was reached: If the city’s money is used to build new escalators or video boards, for instance, the city of Charlotte would own that property, making it tax-exempt. The city would then lease the property to the Panthers at a fair-market price, which isn’t taxable. The city would then pay the Panthers a fee to maintain the property.

The city’s payment to the Panthers can’t exceed the amount of the lease payment, Hagemann said.

“It will be close to a wash,” Hagemann said. “We can’t pay more than they pay us.”

Last year, the Panthers paid $1.7 million in city and county property taxes on their stadium, which is now valued at $135 million by Mecklenburg County. The team also pays property taxes on its $1-a-year land lease with the city because the lease is considered below-market value. The county assesses $326,000 of taxes on that lease.

The Panthers have long contended that taxpayers got a good deal when the team came to Charlotte. The public spent $60 million on land and infrastructure for the $187 million stadium, which was paid for by Jerry Richardson’s ownership group and the buyers of Permanent Seat Licenses.

Many other NFL teams play in publicly owned buildings and don’t pay property taxes. And the Charlotte Bobcats don’t pay property taxes on the city-owned Time Warner Cable Arena, which was built with public money.

The Panthers have said they pay millions of dollars annually in state and federal taxes, mostly in income taxes from their players. The team has cited a University of South Carolina study that estimates its annual economic impact at more than $600 million.

Hagemann said the local property tax arrangement is a small part of the agreement. “The ultimate goal is the tether,” Hagemann said.

Hornets cited

A dozen people spoke Monday night about the Panthers proposal. Most were in favor of the deal, and a number of people – including Charlotte Chamber President Bob Morgan – wore team jerseys to the meeting.

Morgan said the city has had success attracting companies like Chiquita and MetLife because they see Charlotte as a city that “invests in its future, and plays in the big leagues.”

He added the tether is important.

“We have lost a professional sports team before, and it was expensive,” Morgan said about the NBA’s Hornets moving to New Orleans.

Sid Smith of the Charlotte Area Hotel Association urged council members to approve the deal. He noted that the money from the Convention Center fund – from a hotel/motel tax and a prepared food and beverage tax – can’t be used for regular city services.

Richardson, who attended the meeting, thanked Mayor Anthony Foxx and council members for considering the financial assistance. He said he has never considered moving the team, nor would he move the team.

But Deputy City Manager Ron Kimble said that Richardson’s will calls for the team to be sold within two years of the 76-year-old owner’s death. He said the team is “ripe” for another city, possibly Los Angeles, to convince a new owner to move them.

Others spoke against the deal.

“There is no need for these improvements,” said Christian Hine of Fort Mill, S.C., who said he is a diehard fan. “And if there is, they can pay for them themselves.”

Smaller plan

The Panthers original plan was to spend $250 million on stadium renovations. The city would have spent $125 million on improvements, and the state would have paid $62.5 million. The Panthers would have spent $62.5 million.

In exchange for that public money, the Panthers would have agreed to a 15-year “tether” to the city.

But the General Assembly rejected the city’s plans to increase the prepared food and beverage tax from 1 percent to 2 percent for 30 years. Instead, legislators only gave the city permission to use money from the city’s Convention Center fund for the Panthers. Gov. Pat McCrory and legislative leaders also rejected the team’s request for state money.

The plan approved Monday calls for the city to spend $75 million in stadium improvements. The Panthers will spend $37.5 million.

In addition, the city will pay the team $1 million a year for 10 years for stadium maintenance. The public will also pay $250,000 annually for traffic control on game days.

The Panthers have agreed to give the city and the Charlotte Regional Visitors Authority five rent-free days a year from January to June. That is valued at $250,000 per event.

The tentative deal says that if the Panthers attempt to leave before the end of the 2018 season, the city is entitled to seek an injunction before a Mecklenburg Superior Court judge. If the injunction is not granted and the team leaves, it would pay a penalty.

That penalty would be $75 million if the team leaves leave after the 2013 season. It would decline by $7.5 million after each additional season through year six.

In years seven through 10 of the agreement, the Panthers would have to pay the city $37.5 million to leave. That penalty would again 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.

Mayor Pro Tem Patrick Cannon, who is an executive of a company that manages parking lots, was recused from the vote due to a possible conflict with the Panthers.

Harrison: 704-358-5160
Hide Comments

This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

  Read more



Hide Comments

This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

  Read more


Quick Job Search
Salary Databases
Your 2 Cents
Share your opinion with our Partners
Learn More