City Council stars in Studio Charlotte flop
03/07/2014 5:50 PM
03/07/2014 5:51 PM
Bert Hesse, developer of the Studio Charlotte project, was ready for his close-up Thursday afternoon at the Government Center. Hesse had been called before the Charlotte City Council’s economic development committee to explain why after more than five months, he’d been unable to provide the city with financial information about his proposal – little things like how much his movie studio would cost and who his equity partner was.
Given that the city was considering contributing almost $40 million to the project, including the vacant Eastland Mall site, council members were long past miffed. But instead of contrition, Hesse was all “You talkin’ to me?”
He blamed the city for his reporting delays. He suggested that staffers were stealing proprietary information when they drew up the Request For Proposal for Eastland bidders. He even asked the council to pony up a little more money for an environmental study.
It was a classic pushing of the chips to the center of the table. And why not? Hesse had a project that the city badly wanted to happen. It would be located on 80 vacant acres, now dirt and rubble – a symbol of east Charlotte’s struggles. So when Hesse finally delivered his big line, the one about building his studio someplace else, well, that was when the council was supposed to fold.
After all, Charlotte hasn’t always been Gordon Gekko when it comes to business negotiations. When the corporation that owns Carowinds threatened to expand at another amusement park last year – even though it had already purchased land adjoining Carowinds for expansion – the city rushed forward with a $1 million sweetener. When the Charlotte Knights inquired about moving from Fort Mill to uptown, the council flung millions at the idea before public backlash forced them to offer a more sensible deal with protections for taxpayers.
This is what cities tend to do with businesses incentives. They see all the economic promise that might come, but the only danger they see is the danger of some other city getting our business.
But on Thursday? Hasta la vista, baby. The economic development committee recommended against giving Studio Charlotte five more months to negotiate.
That’s not an easy thing to do. Council members have been hearing it from the Eastside, which doesn’t want to see another Eastland opportunity slip away. But neither does the city, which has done everything it can to make this deal work. Staffers drew up the RFP so that Studio Charlotte had the best chance to win. Council members gave Hesse a sixth-month window in which the city wouldn’t even listen to other ideas for Eastland.
All of which was the right thing to do, so long as the city protected itself with due diligence on the project. That’s what city staffers were doing with Hesse. “He wants to blame the city,” Mayor Pro Tem Michael Barnes told me Friday. “He’s the one to blame.”
Hesse is right about one thing – the deal is now “on life support.” There’s a chance he could save it by providing detailed financials before a March 20 deadline. Council members, annoyed as they might be, still think a movie studio in Charlotte is an intriguing concept.
But Hesse overplayed his moment Thursday, and the city had a good one. Sometimes it seems as if our council hasn’t met a dollar it didn’t want to spend. But on this day, it realized that a good idea alone wasn’t worth making a bad deal.
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