Rather than raise taxes to help pay for Bank of America Stadium renovations, the city of Charlotte could cover almost all of the team’s $125 million request by using Convention Center money.
New estimates from the city show that a Convention Center fund could finance $110 million in debt.
To use the money to pay for the Carolina Panthers’ request, the General Assembly would have to give the city approval to shift the Convention Center money to the stadium. But state legislators also would have to give their approval to the city’s current proposal – an increase in the local prepared food and beverage tax from 1 percent to 2 percent.
Democrat John Autry, who voted in favor of advancing the Panthers proposal during a closed City Council session last week, said the city should study using the Convention Center money.
“It’s a worthy discussion,” Autry said. “Very much.”
The Panthers last week asked the City Council in closed session for $125 million in public money for their 17-year-old stadium. The team would spend a total of $250 million for the work, and also plan to ask the state for financial help.
City staff has proposed increasing the tax on prepared food and beverages in the city to 2 percent. That would raise the total sales tax in restaurants and bars to 9.25 percent, and would generate about $20 million a year.
Money from the city’s Convention Center fund is available due to existing debt being retired.
That debt was issued to build the center in the early 1990s, finance part of the Westin hotel a decade ago and build the Crown Ballroom that’s adjacent to the NASCAR Hall of Fame.
The $110 million estimate was listed by the city in a Jan. 9 presentation on revenues for the Charlotte Regional Visitors Authority.
Deputy City Manager Ron Kimble, who is a liaison to the CRVA and is working with the Panthers, has declined to comment on the city’s plans for the Panthers and the privately owned Bank of America Stadium.
In an email to the Observer last week, Kimble said, “The City and CRVA continue to believe that existing taxes should be committed to the existing uses described, because there are unfulfilled needs for the convention center’s future.”
The Convention Center fund is limited by state law for the Convention Center and “tourism promotion.”
It’s unlikely it could be shifted to the stadium without approval from the General Assembly.
But state legislators also would have to approve an increase in the prepared food and beverage tax. A vote to use existing money – rather than a vote approving a tax increase – might be an easier sell politically.
Charlotte City Council member Michael Barnes, a Democrat, said the city should consider using the Convention Center money.
“If that’s an option, we should look into it,” Barnes said.
During the council’s closed session meeting Jan. 14, Barnes was one of two members who voted against the idea of raising the prepared food and beverage tax. Republican Warren Cooksey also voted no.
Council members voted 7-2 to gauge the interest of the General Assembly about supporting a higher meals tax.
The N.C. Restaurant and Lodging Association on Friday sent a letter to Charlotte Mayor Anthony Foxx saying it is opposed to the higher meals tax. It also criticized the city for considering the tax increase in closed session.
Foxx was traveling Tuesday and couldn’t be reached for comment.
Convention Center needs
The city has credited its Convention Center, which opened in 1996, with helping land events such as the Democratic National Convention and the annual CIAA basketball tournament.
But the center has also fallen short of its original projections, even as the city has invested more money in expanding it, with the 700-room Westin and a 40,000 square-foot ballroom that opened three years ago.
Tom Murray, chief executive of the CRVA, has said a 1,000-room hotel could help the city land larger conventions.
Hotels that large are usually subsidized with public money, Murray has said.
In an email to the Observer, Kimble said the $110 million estimate came after the city took into account the center’s need for operating subsidies and expected small capital projects.
He also said the $110 million is needed to keep the Convention Center competitive.
“Our convention center is aging, and future refreshment and improvements to it will be necessary to keep it competitive in the market,” Kimble said in the email.
Tax surplus?
Craig Depken, a UNC Charlotte economist, estimated the city could finance $125 million for the Panthers by spending about $11 million annually for 15 years.
If the General Assembly allowed the city to double the prepared food and beverage tax to 2 percent, that would produce about $20 million in its first year.
That amount would probably increase over time as the city’s population grows.
That could leave the city with a surplus that could be used for other projects.
Republican Andy Dulin, who voted to advance the Panthers plan to the General Assembly, said the city should consider whether the proposed tax increase should be a full 1 percent.
He said the city should consider a smaller increase, if one is necessary.
Democrat David Howard, who voted with Dulin in the closed session, said he wouldn’t comment on negotiations with the Panthers or the concept of using Convention Center money.
He said any proposal would likely be improved by council members.
“The problem is the cart is before the horse,” Howard said. “This isn’t the final word yet.”