The city of Charlotte formally committed Monday to spending $600,000 in general tax dollars to help host the 2017 NBA All-Star Game.
The City Council voted 8-2 to spend the money in support of the All-Star Game; Republicans Kenny Smith and Ed Driggs voted no.
The total incentive package for the All-Star Game is about $5.9 million.
The city’s $600,000 will come from the sale of surplus land near the NASCAR Hall of Fame. That money will cover the city’s costs for providing police, fire and garbage pickup during the event.
That money could also be used for one-time expenses such as police, fire, roads or housing.
Most of the money will come from the Charlotte Regional Visitors Authority, a public organization supported by dedicated taxes on hotel and motel rooms and restaurant and bar tabs.
Those tax dollars can be used only to promote the city or for tourism projects.
Under the terms of the agreement with the NBA, the CRVA and city will spend $2.75 million in tourism funds to help stage the event.
The Charlotte Hornets basketball team would contribute $150,000. The team also will work with the Charlotte Sports Foundation to sell $1.5 million in sponsorships.
Deputy City Manager Ron Kimble said that if the Hornets and the CRVA come up short in selling sponsorships, they have agreed to split the shortfall 50-50. Kimble said the city doesn’t have to spend additional money.
The agreement also has a funding gap of about $850,000. The city’s plan is to ask Mecklenburg County or the state to contribute financially.
It’s unclear whether the state will give money to the event. “We will approach them when the time is right,” Kimble said.
The total $5.9 million incentive package would be used to cover the following expenses:
▪ $1.6 million for the rental at Time Warner Cable Arena.
▪ $1 million for rental of the Convention Center and Bojangles’ Coliseum.
▪ $1.15 million for “destination management.” A local host committee will use that money to promote the event, for security and other expenses.
▪ $750,000 for the city’s host fee. That money will go directly to the NBA.
▪ $750,000 for the cost of paying the sales tax on free and sponsor tickets.
▪ $600,000 for city services.
Smith, who voted against the project, said the city has been awarded events like the PGA Championship without subsidies.
“They pay for their own services,” Smith said. “I see this as a lot of reshuffling of existing entertainment dollars. NBA is holding back 12,000 tickets and charging us a host fee. It’s hard to get my head around it.”
The city said the event will generate $60 million in direct spending, based on economic impact studies of past NBA All-Star games.
Officials have said they expect the event to pay for itself in terms of new sales tax generated. The CRVA will also get new revenue from an increase in hotel and motel room sales and more restaurant business.
However, it’s unclear if those previous studies took into account the amount of regular business that will be lost during the All-Star weekend, as people avoid the city during the game and the resulting traffic and congestion uptown.
Steve Harrison: 704-358-5160, @Sharrison_Obs