Capacity Reached: Questions about Charlotte’s funding of stadium renovations and other projects
CHARLOTTE, N.C. (WBTV) - The amount of money available for the City of Charlotte to pay for major sports venues, the convention center and other tourism related enterprises is starting to dry up. Financial numbers analyzed by WBTV show that the city is close to reaching the debt capacity for its hospitality funds as city officials refuse to provide a list of current and future projects those funds are spent on.
Despite multiple public records requests, city employees have not provided WBTV with up-to-date financial information as city council prepares to spend a possible $110 million in renovations on Bank of America Stadium in order to host Major League Soccer games.
The City of Charlotte’s 2019 Comprehensive Annual Financial Report shows that as of June 30, 2019 the City of Charlotte owes a current balance of $447,100,000 in debt, borrowed on the revenues from the Convention Center Tax Fund, Tourism Operating Fund and Hall of Fame Tax Fund (collectively the “Hospitality and Tourism Funds”).
So far, the city has not provided a list of scheduled projects, debts owed and debt capacity for the hospitality and tourism funds.
But minutes from a 2017 CRVA meeting show CRVA CEO Tom Murray reported that the debt capacity for the hospitality funds at the time was $589 million. Murray told WBTV that the city provided him with that number and he has not been given anything regarding debt capacity since then.
Charlotte City Council has not approved any tourism funds for the renovation of Bank of America Stadium but in a letter to Major League Soccer Commissioner Don Garber, Mayor Vi Lyles said the city was working with Tepper Sports and planned “$110 million in hospitality funds set aside to help ensure a successful venture over the next many years.”
If the city were to approve the $110 million in hospitality funds mentioned by Lyles that would leave just $31.9 million available in debt capacity from those funds.
In an email statement a city spokesperson did not dispute the numbers reported by WBTV.
“State law dictates how we may use Occupancy and Food and Beverage taxes and a potential MLS agreement would not see any money diverted away from schools, public safety, transportation, or any city services whatsoever,” the statement read.
Both WBTV and city council members have requested from the city a schedule of current and future projects that rely on money from the hospitality funds. But a city spokesperson says that no document exists.
However, WBTV found a PowerPoint presentation given to Charlotte City Council in May 2018 that provides exactly that information. The presentation lists “Discovery Place upgrade/expansion (2023), “Spectrum Center upgrades (2020-2024)” and “Bank of America Stadium upgrades (current contract expires June 30, 2023).” The document does not list projected costs.
An analysis of past Charlotte financial reports also raises questions about the capacity for the hospitality funds.
According to the City of Charlotte’s FY 2020 adopted budget both the Convention Center Tax Fund and Convention Center Debt Service Fund have broken exactly even year after year since FY 2016. According to other city financial reports the tax fund has not seen any sizeable increase since FY 2016 when the balance was $74.4 million. The 2019 financial report shows the fund balance is $76.7 million.
As mandated by the North Carolina General Assembly the only hospitality funds that can be used for funding stadiums over 60,000 seats, like Bank of America Stadium, is he Convention Center Tax Fund.
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