Does city refusal on $44M for stadium end Major League Soccer bid?

With the Charlotte City Council refusing – for now – to spend $43.75 million on a soccer stadium, it’s unclear whether Speedway Motorsports executive Marcus Smith will continue his bid to bring a Major League Soccer team to Charlotte.

A Speedway Motorsports executive, Mike Burch, said Thursday that the fate of the bid is still being determined.

While losing nearly $44 million in city funding is a blow, it’s not an insurmountable one.

Earlier on Thursday, Mecklenburg County commissioners voted 5-3 for a plan that would tear down Memorial Stadium and Grady Cole Center in Elizabeth to make way for a new $175 million Major League Soccer stadium. They also voted to spend $43.75 million toward construction, and on a financing plan in which the county would loan Smith $75 million. That money would be paid back over 25 years.

County manager Dena Diorio said she assumes the county vote is still valid but has asked for the county attorney's opinion.

If that’s true, Smith has land for a stadium, a subsidy and an operating agreement in which the county and the team contribute to maintenance costs.

If Marcus Smith and his father, Bruton Smith, move forward, would they be willing to cover the city’s $43.75 million themselves? Or would they continue to ask the city to help fund the stadium? That’s not clear.

MLS has said interested cities must submit applications by midnight Jan. 31.

Charlotte Mayor Jennifer Roberts, speaking during a three-day budget retreat in Raleigh, said the city would consider contributing if officials had more time to study the unanswered questions. As to when that might be, she said, “We don’t really know what that timeline is.”

She said city manager Marcus Jones plans to talk to Marcus Smith.

There are signs that Marcus Smith planned to give MLS additional information about his bid after the Jan. 31 deadline.

In a meeting with the Observer last week, Smith said he didn’t yet have renderings of the new stadium.

He said he didn’t think that would derail the bid because Speedway Motorsports has a long history of building what he said were first-class sports venues. If Charlotte’s bid progressed, renderings would be added to the proposal, he said.

Smith was unavailable for comment Thursday.

MLS invited 10 cities to bid for four new teams. The league planned to award at least two new teams this year, and has said it could announce its four new teams all at once.

Little support on City Council

The city had planned to hold a Friday afternoon public hearing and vote on the stadium plan. But when it was clear that a majority of council members opposed the deal, the city decided to cancel the entire meeting.

Council members had received their first briefing about the plan Monday evening. Many said they felt hurried and couldn’t commit to spending so much money so quickly.

“It’s been so rushed,” Roberts said Thursday. “People feel there are still a lot of unanswered questions. It doesn’t mean we don’t ever want to do soccer. It’s not responsible to the taxpayers when we don’t have all the answers to their questions.”

Democrat Julie Eiselt, an at-large member, said council members “just don’t have the ability right now to thoroughly vet this.”

Democrat Vi Lyles, the mayor pro tem, said Smith “has to make some decisions about his investment and interest.” She said Smith can either go forward now without the city or wait two years for another expected expansion.

Democrat James Mitchell, an at-large member, had been the only council member vocally supporting the proposal.

The city’s $43.75 million would have come from its hotel/motel occupancy tax, which has to be spent on tourism purposes. The county’s $43.75 million would come from its general fund, which can be used for things such as social services.

While the city would have been spending tourism dollars, council members were very hesitant to move forward. They are up for re-election in the fall, and they have been continually assailed by protesters over the city’s reaction to the Keith Scott shooting in September.

Council members have emphasized building affordable housing and creating jobs. Subsidizing a new stadium with a week of debate and consideration would likely have brought an avalanche of criticism.

County supports proposal

The county vote, following one hour of contentious debate, roughly followed party lines. Five Democrats voted for the stadium plan. Two Republicans and Democrat Pat Cotham voted against it. Republican Bill James, who was opposed, was absent.

“This is the biggest travesty in governance I’ve ever had anything to do with,” said county commissioner Jim Puckett, who voted no. “This is not the way the people’s work should be done.”

Puckett said use of money from the county’s capital budget would leave less for other priorities commissioners have identified, such as workforce development, pre-kindergarten education and help for the homeless. The 25-year term of the agreement with the soccer team would lock the county into annual payments that might be hard to make in an economic downturn, he added.

Republican Matthew Ridenhour said economic studies have shown publicly financed stadiums aren’t good deals for taxpayers. Democrat George Dunlap said stadiums are valuable economic development tools.

Commissioner Dumont Clarke, a Democrat who lives in Elizabeth, where Memorial Stadium is located, said the city’s cancellation allows more time for further talks about the proposal.

“It’s not really our (Jan. 31) deadline, it’s the team’s deadline, the investor group’s deadline, and they will have to decide what they do about that,” Clarke said.

“I’m not prepared to support this without the city being a participant in it, unless the team were to step up and say, we’ll pick up that (share) or something. Anything that occurs could change … in the meantime, we have a deteriorating asset that we will continue to do our best to keep from collapsing.”

Following news that Charlotte had canceled its vote, Puckett unsuccessfully asked county commissioners to revisit their morning vote.

“From my perspective, that was kind of irresponsible because now you have no idea who your partners may be,” he said later. “We’ve now said the city is admitting that they don’t have information on a bad deal, and we’re saying it doesn’t matter, we’re going to do it anyway.”

This story was originally published January 26, 2017 at 11:38 AM with the headline "Does city refusal on $44M for stadium end Major League Soccer bid?."