Charlotte in talks to fund stadium project, but can they feasibly afford it?
CHARLOTTE, N.C. (WBTV) - Charlotte city leaders are starting to grapple with how much it could cost taxpayers to strike a new stadium deal with the owner of the Carolina Panthers and Charlotte FC, David Tepper. Sources confirmed to WBTV that city economic development staff presented councilmembers with a potential $1.2 billion stadium project from Tepper Sports and Entertainment (TSE) including a $600 million request for public funding.
There is no official request from Tepper’s company but a WBTV source says there are ongoing conversations with TSE as both sides figure out how much they can bring to the table.
City leaders and Tepper previously floated the possibility of stadium renovations instead of paying for a new stadium. A $1.2 billion project would be significantly less than the cost of other new NFL stadiums. The most recent NFL stadium to open and cost less than $1.2 billion was U.S. Bank Stadium in Minneapolis in 2014. The Mercedes Benz Stadium in Atlanta cost an estimated $1.6 billion to construct in 2017. More recent projects have cost upwards of $2 billion.
Related >>> Records show Charlotte lacks money for a new stadium
Specifics of the hypothetical deal are sparse and a lot depends on the city’s ability to pay that much money for a stadium project. The funds would come from the city’s tourism and hospitality taxes. This is not the first time city leaders have discussed the feasibility of taking on such a major project.
In 2021, records showed the city’s ability to fund hundreds of millions of dollars for a new stadium or major renovations was limited due to other projects the city has already committed to.
In a presentation given to the Charlotte Regional Vistors Authority in 2021, the city showed that the debt capacity, or the amount the city could borrow, from the Convention Center Fund is roughly $250 million in 2027.
WBTV first started reporting in 2019 and beyond, there are questions about whether Charlotte has the debt capacity in its Convention Center Fund to help pay for a world-class stadium in the immediate future.
That’s the year the Panther’s post-tether agreement with the city completely expires.
During WBTV’s 2021 investigation into the city’s ability to fund a new stadium a city spokesperson said the city would not agree to fund a project that could cost more than the city can afford.
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“The City will evaluate Mr. Tepper’s funding request, if and when Mr. Tepper submits it to us. The City of Charlotte has a history of fiscally responsible management and under no circumstances will the City agree to a funding request that would exceed the capacity of the Hospitality Fund,” according to the city’s spokesperson in 2021.
Earlier this week, State Representative John Bradford amended a bill on Charlotte FC vanity plates to include a new provision on the countywide hospitality taxes and extend how long they last.
If passed, Mecklenburg County’s 2% occupancy tax and 1% food and beverage tax would last until 2060. The occupancy tax is set to expire in 2038, and the food and beverage would sunset in 2031.
All of the hotel and food-related taxes help pad the coffers of three separate city funds, with the Convention Center Fund designated as the one to pay for major football stadium upgrades.
Extending the length of the tourism-related taxes allows the city to borrow more money by showing lenders revenue will keep streaming in for decades. Virtually every major project funded by tourism taxes is paid for by bonds issued to the city.
Bank of America Stadium and The Panthers are not the only sports venues the city spends taxpayer money on. In June of 2021, Charlotte leaders committed to pay $275 million for Spectrum Center renovations and a new practice facility for the Charlotte Hornets. Only part of the money from that agreement would come from taxes.
The city would contribute $60 million to the performance center, paid for by new revenues generated by naming rights and other opportunities, not from tourism taxes. Money to pay for the upgrades to Spectrum Center would come from rental car and hotel sales taxes that, by law, must be spent on projects to support the city’s tourism economy.
TSE’s previous public-private partnerships in the area have come under scrutiny over the past several years. The planned Panthers headquarters and practice facility in Rock Hill is the biggest example of a public-private partnership that did not go according to plan. Tepper’s GT Real Estate terminated the contract with the city and during a news conference, Tepper said the two sides are just trying to sit at the same table to talk.
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