Here's what the latest $47 million renovations to Bank of America Stadium look like
As local officials debate public money for sports, a little-noticed General Assembly bill would give the Carolina Panthers and Charlotte Knights tax breaks amounting to more than a half-million dollars a year.
The measure involves property taxes the teams pay for land they lease from the government.
Supporters say the tax is unfair because the teams pay taxes on land they don’t own. Critics say the legislation would benefit wealthy teams at the expense of taxpayers.
The brief provision is contained in Senate Bill 114, a measure that deals mainly with arcane changes to revenue and criminal law. Passed by the House, it awaits another Senate vote.
It comes as Mecklenburg County and Charlotte officials are in the middle of a contentious debate over the use of public money for private sports teams.
This week county commissioners reversed themselves on subsidizing a bid for Major League Soccer. At one point they appeared poised to pay $71.25 million for a stadium next year and another $30 million the following year. This week they voted to provide only the land where Memorial Stadium sits.
Now the city is considering whether to invest $30 million in the project with a team headed by race track executive Marcus Smith.
Major League Soccer plans to expand by four teams and Charlotte is one of 12 cities bidding for an expansion franchise. Another group bidding in Raleigh also could benefit from the provision in the Senate bill.
‘Tax fairness issue’
The provision would exempt entities from property taxes on public land leased at below-market value. The Panthers lease 34 acres of public land from the city for $1 a year. The Knights lease land from the county.
The Panthers pay property taxes on the team-owned Bank of America Stadium. But under a deal in place for 20 years, they also pay property taxes on the land they lease for the stadium and practice field, land with a tax value of $27.6 million. Under the deal, that’s about 42 percent of its full tax value.
This year their tax bill on the land is $357,000.
The Knights would pay $166,000 on the uptown property they lease for BB&T Stadium. The land’s tax value is $12.5 million.
Panthers’ attorney Richard Thigpen said the team has tried to get exempted from the tax for years.
“We don’t mind paying our fair share of taxes but this was an anomaly,” he said Friday. “It’s a tax fairness issue. It’s not a rich sports entity asking the government to give us a bunch of money because we’re not asking for that.”
Last month Forbes Magazine valued the Panthers at $2.075 billion. It said the average NFL team had an operating profit of $91 million.
Rep. Bill Brawley, a Matthews Republican who co-chairs the House Finance Committee, offered the amendment that included the tax change.
“I believe that treating taxpayers fairly is important,” he said. “Even if it’s the Panthers they should be treated fairly. This is a fair tax treatment for an intangible piece of personal property.”
Intangibles are non-physical assets such as stocks and bonds and, in this case, leaseholds. Lawmakers repealed the state’s intangibles tax in 1994.
Unlike many NFL teams, the Panthers built the stadium with private money. But they have benefited from public support.
The team is currently making $47 million worth of renovations with the help of $17 million from the city. It’s part of a deal the Panthers agreed to with the city in 2013. That year, the Charlotte City Council voted to give the Panthers $87.5 million, of which $75 million would be spent on renovations. In return, the team agreed to remain in Charlotte for at least six years, with penalties if it moves in the four years after that.
The Senate bill with the tax provision passed the House 113-1 in late June. It was considered Thursday by the Senate but referred to the Rules Committee. It’s not clear when it would come back for a vote, though the General Assembly reconvenes Aug. 18.
Mecklenburg Commissioner Pat Cotham said she doesn’t like it.
“It kind of gives me pause,” she said Friday. “These are multi-million dollar organizations and that’s a half-million dollars that would affect the county. We have a lot of needs in our county and we look to our large organizations to pay their fair share.”
But Republican Commissioner Jim Puckett called it “a fairness issue.”
“If they were getting a tax break on any of the improvements I’d have a problem with that,” he said.
Brawley said there are a handful of other entities in the state that also would benefit from the change because they pay taxes on land they lease for below-market rates. He said the proposed MLS stadium in Raleigh also would benefit.
A group trying to bring soccer to the capital proposed privately building a $150 million stadium on 13 acres of downtown land owned by the state. WRAL reported this week the land is valued at at least $91 million.