City OKs spending $33.5 million on Time Warner Cable Arena

Charlotte City Council members on Monday approved spending $33.5 million over 10 years on improvements to Time Warner Cable Arena, money that the city said it was contractually obligated to spend.

The Charlotte Hornets will use the money to renovate restaurants and bathrooms, add lower bowl seating, improve lighting and replace the scoreboard, among other improvements.

The team and the Charlotte Regional Visitors Authority had originally asked for nearly $50 million in public money.

Some council members Monday lauded the city for spending less than was requested, while others said they felt they were giving the NBA team a free ride.

Council members approved the money in a 9-2 vote. The council’s two Republicans voted no.

The city’s lease with the Charlotte Hornets calls for the arena – which opened in 2005 – to be among the NBA’s most modern. The CRVA and the Hornets said some parts of the arena were out of date, and Deputy City Manager Ron Kimble said the city had no choice but to fund many of the requests.

“If we break a contract, who will believe our word?” said at-large council member Claire Fallon, a Democrat. “Who will believe us? I have to vote for it.”

Republican Ed Driggs said the city’s original operating agreement with the NBA team was poor. He also objected to the city footing almost all of the bill for the renovations.

“Many don’t believe public money should be used to subsidize a for-profit business,” Driggs said. “How do we rationalize the terms of this? We pay all capital costs … and receive no proceeds. What kind of partnership is this?”

Kenny Smith, the council’s other Republican, said he thought the city could “whittle down” the amount it had to pay. He said he questioned whether the city was required to pay for items such as moving the ticket center.

Democrat Michael Barnes, the mayor pro tem, responded to Driggs’ concerns.

“The issue is that we own the arena,” Barnes said. “It wouldn’t be true to say (the Hornets) haven’t contributed. They aren’t there for free.”

The team pays the CRVA each year for “back-of-the-house” operations such as heating and air conditioning. The city said that the Hornets have also spent about $6 million on improvements to the arena.

Barnes added that the city worked to reduce the team’s wish list by millions of dollars.

“There has been some effort to reduce the amount,” he said.

The deal calls for the city to spend $27.5 million over five years. It will also spend an extra $600,000 a year for 10 years into a maintenance fund.

The city already spends about $350,000 annually on a maintenance fund. The Hornets match that each year.

The deal calls for the Hornets to also spend $600,000 a year for 10 years. The team will dedicate $2.4 million of that money to renovate suites and the home team locker room.

The city didn’t want to pay for suite renovations directly out of its own pocket. But City Manager Ron Carlee has acknowledged that all of the money is fungible.

The city will pay for the renovations from two hospitality taxes, which are limited by state law for purposes such as tourism, convention centers, museums and arenas. The city will use money from a hotel/motel occupancy tax and a car rental tax for the improvements.

The city’s contract with the team calls for it to improve the arena to “meet NBA standards” and also to match improvements that have been made at half of NBA arenas.

Time Warner Cable Arena is the NBA’s third-newest building. Since it opened, new arenas have opened in Brooklyn, N.Y., and Orlando, Fla.