Despite an increase of at least $400,000 in incentive payments to keep the CIAA basketball tournament, the Charlotte Regional Visitors Authority said its confident it will still have enough money to attract other conventions and events.
The CIAA and the CRVA announced Monday that Charlotte would be home to its annual basketball tournament through 2020 and that the CIAA would move its headquarters from Hampton, Va., to the Queen City.
The CRVAs current deal with the CIAA calls for Charlotte to provide the CIAA with $1 million annually along with use of the Convention Center rent-free.
The new deal which hasnt been signed by either party calls for that $1 million payment to increase to $1.4 million. The CIAA will likely be able to continue using the Convention Center for free, and the CRVA said it may help the conference with its expenses for staffing Time Warner Cable Arena.
At the 2012 tournament, the CIAA paid the Charlotte Bobcats $312,000 for use of the arena.
The incentive package is likely the most Charlotte has ever given on an annual basis to land an event. CRVA chief executive Tom Murray said Monday that the basketball tournament is the citys largest convention or event held annually.
The 2012 tournament was estimated to generate just under $30 million in direct spending to the Charlotte area.
The CRVA didnt release a detailed breakdown of how much tax revenue the CIAA generates.
But if $30 million was spent by visitors, the state would receive about $1.4 million.
The city and county would receive a share of the general sales tax, as well as a half-cent sales tax for transit, and special hospitality taxes.
That could generate about $1.5 million in local taxes.
That doesnt account for what economists call a ripple effect when new dollars move through the economy.
Its common for Charlotte and other cities to offer sizable financial incentives to land conventions and events such as the CIAA. Nationwide, cities have invested heavily in meeting space, while growth in the convention business hasnt kept pace.
Most of that incentive money comes from the countys two hospitality taxes a tax on hotel and motel rooms and a tax on prepared food and beverages.
The CRVA last year budgeted just under $2 million for what it calls business development funds.
To land events, the CRVA often offers rental discounts for the Convention Center.
Business development dollars are often penciled in to help the Convention Center offset those discounts. In other instances, the CRVA uses the money to help a convention or meeting entertain.
CRVA spokesperson Laura Hill said Tuesday the CRVA will be able to handle the larger commitment to the CIAA.
We have been planning and were prepared for renewal of this agreement, and this fits in reasonably with our expectations, she said.
Murray said Monday he will look to the community to help raise the $1.4 million for the CIAA.
That will include the city of Charlotte and Mecklenburg County, which each contributes $200,000. Both governments may be asked to contribute more money for the CIAA.
But CRVA may be penciling in money from businesses and corporations. For this years tournament, Bank of America contributed $100,000, Hill said.
Hill said the CIAAs decision to move its headquarters to Charlotte will help it make better connections with the citys corporate community.
Historically this fund has received both corporate and public support, Hill said. We think with the renewed commitment of the CIAA, including the relocation of its staff and headquarters, will help attract additional corporate support.
The state of North Carolina also used to help the CIAA financially, but Murray said the state no longer contributes.
Mayor Patrick Cannon said he thought the City Council would be willing to contribute more to help the CRVA raise the $1.4 million.
Mayor Pro Tem Michael Barnes said Tuesday he wants to ensure that the additional money is earmarked for scholarships.
The countys hospitality taxes are bringing in more revenue, because hotels and restaurants are doing well financially.
But the CRVA has lost a significant part of that money. The Charlotte City Council last year voted to use $87.5 million in Convention Center funds to pay for renovations at Bank of America Stadium for the Carolina Panthers.
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