Why new owners want more city money in Hornets’ arena — and less in practice facility
New Hornets ownership is driving changes to plans for Spectrum Center renovations and a new team practice facility that received a preliminary approval on Monday.
The council’s economic development committee voted unanimously Monday to endorse a new approach that increases money the team is spending on the practice facility, shifts more city money to the Spectrum Center and moves the location of the practice center. The full City Council could take up the issue as soon as March 25, according to a presentation from city staff. Though some committee members cautioned they still want more information before a final decision is made.
“The council needs to try to assess this transaction in the public interest,” council member Ed Driggs said. “So when you hear us scrutinizing and questioning things, it is not an expression of, you know, questioning the team. It’s a question of our being responsible and needing to be able to account for what it is we approve.”
Assistant city manager Tracy Dodson said the changes to the plan first approved in 2022 were driven by the Hornets’ new ownership group, which took over the team in July 2023.
“This is new ownership coming in with a larger vision,” she said.
Changes to Hornets renovation plan
Under the revised plan, Charlotte would still contribute $275 million to the Hornets, as was approved in 2022.
But instead of $215 million going to renovations in the Spectrum Center and $60 million to the practice facility, the city would invest $245 million in the uptown arena and $30 million in the practice center.
Additionally, the Hornets say the team will invest an additional $70-100 million in the practice facility, according to the city’s presentation.
That could bring the total cost of the project to $345-375 million.
New Charlotte Hornets practice facility
The revised practice center plan is larger, includes a medical facility and will be built “sooner than we had originally contemplated,” Dodson told the committee Monday. It will be built on a gravel lot at Caldwell and Trade streets near the Spectrum Center — rather than at the site of the existing Charlotte Transportation Center.
The Hornets said in a statement last week the new facility “is the next step as we work toward our vision of building the premier franchise in the NBA and having world-class facilities.”
“We truly appreciate the collaboration and partnership of the City of Charlotte and Charlotte City Council. This plan is a win-win scenario for all parties involved — the city, HSE and the community at large — and an ideal model of a public-private partnership,” the statement said.
What will changes mean for city of Charlotte?
Under the new plan, Dodson said, the city won’t have an ownership stake in the practice facility or get revenue from any future naming rights deal for the facility. That means all $275 million in city funding would come from hospitality dollars, a change from the 2022 plan that estimated $60 million coming from a naming rights deal or deals.
The expected revenue loss will be offset by the city not maintaining the practice facility, property tax revenue from the facility and reduced “risk of penalty” for the city on its investment, Dodson said.
The Hornets also plan to fund replacement parking for city employees who currently use the gravel lot where the practice facility will be built. At least 60% of the gravel lot, a value of $3.29 million, will go to the team, who will have five years to develop the other 40% before the land goes back to the city.
“What you end up with is an outcome where it’s pretty close to a wash in terms of benefits we get or obligations from which we are relieved,” Driggs said of the new numbers.
What about transit center?
Committee Chairman Malcolm Graham said he agreed with Driggs’ assessment of the new plan, but he’s concerned about the impacts on the city’s plan for the uptown transit center.
“Transit and transportation were a part of the initial proposal. And now that has gone dark, from my perspective,” he said.
But interim Charlotte Area Transit System CEO Brent Cagle said at Monday’s committee meeting that the transit center project “continues moving forward.”
“It’s always been a project to replace the CTC and have private development over build on the same parcel. All of that remains the same. That has not changed,” he said.
Cagle said CATS continues to work with developers on the project and expects to make progress on rezoning in the coming weeks.
What comes next?
Dodson said city officials and the team hope the new practice facility will spur the development of a new entertainment district around the building and the Spectrum Center.
That could include restaurants, hotels and more as well as more naming rights opportunities for the city, staff said.
Mayor Pro Tem Dante Anderson, whose District 1 includes the Spectrum Center, said that could be an economic boost for uptown.
“I think this is a great way to activate and engage this part of the city core that we really haven’t seen in a long time,” she said.
Before the full council votes on the plan, Graham said he’d like more discussion about how often the city can use the Spectrum Center and how the new practice facility could be used “for some type of community engagement.”
“I hope we can put it in writing, so we can formalize that,” he said. “It’s a $30 million commitment that we’re making, and I think it shouldn’t be just in passing.”
This story was originally published March 4, 2024 at 4:53 PM.
