CIAA tournament could leave Charlotte next year

02/22/2014 10:29 PM

02/23/2014 1:58 PM

The CIAA basketball tournament is free to leave Charlotte for another venue after this year, and tourism officials acknowledge it may cost more than the city’s current $1 million payment to keep the athletic association’s week-long spree of parties, shows and games.

The 2014 tournament opens Tuesday for the ninth consecutive year in Charlotte. This is the final year that it is contractually bound to the city.

Last year, the CIAA rebuffed the city’s request to exclusively negotiate a contract extension. Instead, the Hampton, Va.-based association has said it will issue a formal request that all interested cities submit proposals.

But the CIAA has not yet taken that step — causing growing concern for the Charlotte Regional Visitors Authority.

“We are anxiously awaiting the (request),” said Laura Hill, a spokesperson for the CRVA, which coordinates the city’s tourism efforts.

At stake is one of the city’s biggest tourism events, estimated to create more than $40 million in economic impact.

The CRVA has estimated that CIAA visitors occupy more than 40,000 hotel room nights, making it among the largest conventions Charlotte has ever hosted. In addition to the basketball games, the CIAA is known for numerous parties at clubs and restaurants.

New CIAA Commissioner Jacqie Carpenter came to the association in the fall of 2012 from the NCAA, where she worked to stage the men’s and women’s basketball tournaments.

She said Friday the association will release its formal request for cities to bid on the event in “a few weeks.” She said 10 cities have expressed interest, including Charlotte, Raleigh, Atlanta, Greensboro, Washington D.C., Brooklyn, N.Y. and Baltimore.

“The CIAA is no different from any other sporting event,” Carpenter said, in that it wants to maximize the value of the tournament to the association’s schools.

The athletic association’s tax return for the year ending in June 2012 suggests the CIAA may need more money. The CIAA ran a $1.7 million operating deficit that year, on revenues of $5.9 million.

Carpenter inherited that deficit from Leon Kerry, the CIAA’s longtime commissioner who retired abruptly in the fall of 2011.

Hill said Carpenter has outlined in general terms what she and the CIAA want from a host city, including a focus “on the scholarship dollars and the athletes in general.”

Charlotte has been praised for its walkable downtown and lively nightlife, making it attractive for fans. But other cities that may bid also have an active nightlife.

Current deal

The CRVA’s current deal with the CIAA calls for an annual payment of $1 million for athletic scholarships and tournament expenses in exchange for hosting the tournament.

In addition, the CRVA allows the CIAA to use the Convention Center rent-free for its fan fest. The CIAA, however, paid the Charlotte Bobcats more than $312,000 for staffing at Time Warner Cable Arena, where the tournament’s games are played, according to its tax return.

As part of that $1 million, the city and Mecklenburg County each contribute $200,000 from their general tax funds. That money could also be spent on a variety of other needs, including roads, sidewalks or schools.

City officials believe it will cost more to keep the tournament in Charlotte.

But no one knows how much more.

Carpenter said the CIAA will not likely ask bidding cities to reach a certain dollar amount. Cities will offer the best deal possible.

“One city might be able to offer $2 million for scholarships, while another might offer free facility rental,” Carpenter said.

She added: “We want this to be a win-win for the CIAA and the host city.”

In 2005, the last year the tournament was in Raleigh, that city’s total contribution from public and private sectors was $340,000 to secure the tournament.

Financial problems

The Central Intercollegiate Athletic Association’s 12 mostly historically black colleges and universities include Johnson C. Smith University in Charlotte.

The basketball tournament is crucial to the association’s budget, according to its tax return that covered the 12 months ending in June 2012, the most recent available.

The CIAA had total revenues of $5.94 million for that year. That includes the $1 million guarantee from the CRVA as well as $2.8 million in revenue from the tournament.

But the CIAA’s expenses were $7.65 million for that period. The association ran a $1.7 million operating deficit, burning through all of its cash on hand.

The CIAA used some of its cash reserves to make up the difference but still had a debt of more than $700,000.

“It was a tough year for the conference,” Carpenter said about the 12 months covered by the tax return. “The deficit is a priority for the board.”

Carpenter said she had cut the deficit by half in her first nine months on the job, in part by cutting what she calls “excess spending.”

Despite the deficit, the CIAA still gave each member school $130,000 for scholarships for the year ending in June 2012. Much of that money came from Charlotte’s $1 million payment for the tournament.

Little time to bid

The CIAA has already set dates for its 2015 tournament: Feb. 23-28. But it doesn’t have a venue, or at least one that has been made public.

“I would say, in general terms, it’s unusual for an event of this size to still be available just one year out,” said Scott Dupree, executive director of the Greater Raleigh Sports Alliance. “They are usually awarded 1.5 to 4 years out.”

Dupree said he can’t say whether Raleigh will bid for the 2015 tournament.

He said Raleigh tourism officials must first examine the association’s request for bids to see if it makes sense logistically and financially.

“Can we bid for and secure that event within reason, without going crazy?” Dupree said.

“It was a success here by any measure,” Dupree said. “I thought we did a superb job, and it took the next step in Charlotte and became bigger. It’s one of the top sports properties in college basketball.”

Incentives common

The CRVA routinely offers rental discounts for the Charlotte Convention Center.

The CIAA incentives are among the largest Charlotte offers, though the CIAA is also a huge event in terms of attendance and hotel room nights.

But the size of the CIAA payments are not unprecedented. For instance, the city and the CRVA told the National League of Cities it could contribute up to $1.3 million in cash and other incentives in exchange for the league’s 2017 meeting, which is expected to use 15,000 hotel room nights — 25,000 fewer than the CIAA.

Sid Smith of the Charlotte Area Hotel Alliance said the CIAA’s importance is magnified because it comes in February, which is a relatively weak month for bookings.

“Anytime you have a meeting like the CIAA that is on your books a year out, or in this case, a number of years out, it is very good for your occupancy and for average daily room rates,” Smith said. “It is absolutely a wonderful piece of business to have.”

Tom Sasser of Harper’s Restaurant Group said his uptown Mimosa Grill sometimes gets private-party room rentals for the CIAA, but he said most of the restaurant business is casual.

He said his Harper’s restaurants at SouthPark and Carolina Place Mall see an uptick in business.

Perhaps the biggest upside to the CIAA is that it comes during a weak period for restaurants.

“February is horrible,” Sasser said.

State Sen. Malcolm Graham, a J.C. Smith graduate whose two daughters attend CIAA schools, said it makes sense for Charlotte to pay more if necessary to keep the tournament. Graham also works at J.C. Smith, but said he was not speaking on behalf of the university.

“If it means paying a little bit more to accomplish that, it's worth it,” Graham said. “It pales in comparison to the return on the investment.”

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