Charlotte City Council
January 14, 2013
Closed Session- Carolina Panthers
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Motion was made by Councilmember Mitchell, seconded by Councilmember Howard, and
carried unanimously, pursuant to North Carolina General Statute 143-318.11(a)(4) to go into
closed session to discuss matters relating to the location of industries or businesses in the City
of Charlotte, including potential economic development incentives that may be offered in
negotiations.
The City Council of the City of Charlotte, North Carolina met in closed session on Monday,
January 14, 2013, at 8:15 p.m. in Room 267 of the Charlotte Mecklenburg Government Center
with Mayor Anthony Foxx presiding. Councilmembers present were John Autry, Michael
Barnes, Patrick Cannon, Warren Cooksey, Andy Dulin, Claire Fallon, David Howard, Patsy
Kinsey, LaWana Mayfield, James Mitchell and Beth Pickering.
Also present were Interim City Manager, Julie Burch, Deputy City Manager, Ron Kimble,
Assistant City Managers Ruffin Hall and Eric Campbell, Finance Director Greg Gaskins, Kim
McMillian, City Attorney, Bob Hagemann, Jerry Richardson, Danny Morrison, Richard
Thigpen; City Clerk Stephanie Kelly
City Attorney, Bob Hagemann said we are in closed session on Economic Development and
under the Council’s Policy this closed session will be recorded and once there is no longer a
reason to withhold the minutes of the closed session that is when some announcement is publicly
made the recording and transcript will be made available to the public. Keep that in mind as you
speak as your words will be recorded.
Mayor Foxx said this Council has had more than its fair share of major decisions to make, but I
think this is in the category of major decisions for us. We have an incredible asset in this
community in the Carolina Panthers. Speaking of someone who lived here before we had NFL
football, and now living in our community raising kids with NFL football, the impact on the
community both from an economic standpoint and also from a quality of life standpoint is pretty
clear. We didn’t necessarily, as a group, decide to have this conversation at this particular time,
but circumstances sometimes converge to give you and put on your plate issues that you have to
deal with whether you like to or not, and that is where we are. I think, as you will hear today,
there has been some substantial conversation between our staff and the Carolina Panthers over
the last several weeks. We need to hear what those conversations have yielded. I am very
pleased that we have Mr. Richardson from the Carolina Panthers with us tonight, and Mr.
Richardson thank you very much for being here. We look forward to hearing from you as well
sir. With that I will turn it over to Ron Kimble.
Deputy City Manager, Ron Kimble said I wanted to let you know that this is going to be a
fairly lengthy presentation. We do invite questions. With your permission, the way we would
like to proceed is I’ll make some opening comments and cover some of the background that got
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us here, then with your permission we will turn it over to Mr. Richardson and Danny Morrison to
cover some more information that they would like to convey to you. Mr. Richardson will finish
up with an official ask of the Charlotte City Council, and then questions from you to them and
then they will leave. We will cover in greater detail the deal points and the terms which we have
arrived at this particular point in time so you will be free to discuss those and have a longer
dialogue and discussion of those issues as you so choose. That is the way we’ve got this
mapped out and hope that meets your expectations and with your approval.
Related to the Stadium itself, I know you’ve all had individual conversations with the Panthers
so this may be a review, but we want to make sure we are all on the same page and start at the
same point. Bank of America Stadium opened in 1996. Several years of planning and design
and construction, finally opened in 1996, so it was designed and planned even earlier than that.
It is the 25th oldest stadium in the NFL right now that is not either new or had a major
renovation. Things happen fast in the NFL and stadiums are built and renovated quite often in
the lineup. It has a good “bones,” but it is in need of a moderate set of improvements,
comparatively speaking to what is happening in other NFL communities. These planned
improvements we are going to talk about tonight, both from the City and the Panthers’
perspective are expected to carry this Stadium forward in its modernization and upgrade for
another 10 to 15 years. Probably 15 years is the total number that we are looking at.
Related to the NFL, the Panthers we know are Charlotte’s Team, one of 32 in the NFL.
Currently the Panthers are not contractually tethered to Charlotte, which makes them ripe for
courting, plucking, picking or whatever term you want to use, and that is important today
because the City of Los Angeles is lurking. They are in the process of building a stadium and
they are trying to lure another NFL Team from another community to come to Los Angeles. Mr.
Richardson is here tonight, is our majority owner, he is 76 years old and he desires to tether the
Panthers to Charlotte now. He reminded me tonight that even though he is 76 years old, he has a
new young heart and he wanted to make sure that I conveyed that to you. Upon our owner’s
passing, the Team will be sold. That is something that has been talked about, has been said and
that is likely what will happen upon the passing of our majority owner. Tethering is a must at this
time. You would not want the team to pass to another owner’s hands without the tethering in
place that binds and locks the team to Charlotte, especially with the City of Los Angeles doing
what it is doing.
Again, Bank of America Stadium opened in 1996. At that time it was the first product that was
sold with the new permanent seat license approach toward financing stadiums from a private
perspective. The PSLs were sold, the City and County put in $60 million for land, practice field,
hazards cleanup and a parking deck and the Panthers came forward with $187 million for the
original construction of the current Bank of America Stadium. Again the identified
improvements to keep the Stadium viable for the next 10 to 15 years, we are going to talk some
about this when the Panthers talk to you tonight, are estimated at $250 million and they are going
to talk about what is in that $250 million. Here is the key that we brought to the table as a City
staff because we know that we need a different diversified revenue source other than property tax
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and sales tax to cover what we are trying to do in a public/private partnership with the Panthers.
Our idea, and we will walk you through this on the deal points after the Panthers leave, was to
come up with a Charlotte only 1 cent food and beverage tax which needs to be authorized by the
State of North Carolina to fund the City’s portion of the improvements costs. Why City only?
We currently have a 1% Mecklenburg County prepared meals tax, also known as the food and
beverage tax. It is a tax on even the prepared food that you get at Harris Teeter, the prepared
food in the counter, not apples and oranges, not things that you buy off the shelf, it is prepared
meals when you are walking into Harris Teeter and when you go to a restaurant and order a
meal, 1% is tacked onto your bill or on any prepared meals in Mecklenburg County.
To go right now to the Mecklenburg County Board of Commissioners and have a conversation
about the Panthers would be very difficult to do, given their particular situation right now and
also whenever you look at a countywide tax the six towns, Mint Hill, Matthews, Pineville,
Huntersville, Cornelius and Davidson all want a cut of the action so when you get into that
negotiation about how a 1% food and beverage tax would be broken up, you end up winding
back with the amount of proceeds that would be Charlotte’s share of being a 1 cent Charlotte
only food and beverage tax and you don’t have to go through all the pain and suffering. What
you also will note, and we will bring to your attention tonight is, we just didn’t want to handle
and satisfy a public/private partnership with the Panthers, we also have some ideas that a 1 cent
food and beverage tax, Charlotte only, could throw off some additional revenues that we could
use for amateur sports in our community. What we are trying to do in this negotiations with the
Panthers is come up with the proper public/private partnership that Council would be
comfortable with and also have additional proceeds available for amateur sports because that has
been a priority of the City Council for the last four years in your Economic Development Focus
Area Plan. We are going to show you tonight how it is kind of structured such that we believe
that we can come up with a satisfactory package with the Panthers and also be able to fund some
good portion of amateur sports in our community in this fashion.
Are there questions about the prepared meals tax also known as the food and beverage tax?
Councilmember Barnes said did you look at the hotel/motel tax?
Mr. Kimble said we did at 8%; 3% for tourism, 3% for the Convention Center and 2% for the
NASCAR Hall of Fame. We thought that we would price ourselves out of the market with the
hotel occupancy tax if we conveyed it back any further than the 8% currently. Our competitive
set that we’ve looked at would price us out of that competitive setting.
Mr. Barnes said my concern is that the least among us can’t afford their food bills and I know
you say it is not off the shelf. Essentially it is restaurant purchases and prepared foods.
Mr. Kimble said the point is, that is a choice, you do not have to go to a restaurant and eat. That
is a choice and you can do that at your leisure and at your budget that allows you to go out to eat.
People have a choice of eating at home or eating in a restaurant or through a prepared means that
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is collected from a particular grocery store or merchant. It is a choice and it is a user fee more so
than a tax.
Mr. Barnes said I love the rationalization, I disagree with it.
Councilmember Fallon said would it be Bojangles or Ovens for amateur sports and would it
also be used to take care of the infrastructure?
Mr. Kimble said are you talking about Bojangles Coliseum?
Ms. Fallon said yes.
Mr. Kimble said you could use some of that debt capacity from the money thrown off from this
food and beverage tax to fund the Bojangles Coliseum and the Amateur Sports Facilities.
Ms. Fallon said the infrastructure would be taken care of instead of the CIP?
Mr. Kimble said I would say that it is a choice by Council in that particular project, we do need
money to purchase hotels and clear the area so you may still want to have a little bit in your bond
campaign for redevelopment and demolition and clearing, but clearly all of the facilities
construction and the facilities at that location could be funded through the excess capacity in this
1% food and beverage tax, and other amateur sports facilities in the community. The beauty is, it
is Charlotte only so you make the decisions, nobody else could make those decisions for you. It
would be choices of the Council.
Councilmember Mayfield said when we are talking about this food and beverage tax for
prepared foods so that includes fast foods?
Mr. Kimble said I believe it does.
Ms. Mayfield said we are thinking about what Mr. Barnes was talking about, we do have a large
segment of the community where it is not a luxury for them to go to Burger King or McDonald’s
or a fast food restaurant because it is that choice of that meal because they cannot afford fresh
fruits and vegetables and going to the grocery store or they don’t have accessibility. Where we
are looking at beverage, are we saying all beverages or can we designate that to all alcoholic
beverages?
Mr. Kimble said it is prepared meals ask.
Ms. Mayfield said is there any way to be able to work that because it will be a hard sale for me to
go to the community on this 1 cent food and beverage tax when we have so many people
struggling. I would personally feel better if there was a way for us to identify those alcohol sales
and specific restaurants with defining the difference between a restaurant and a fast food because
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there is a very clear difference in me going out to Sullivan’s uptown or to Carrabba’s and paying
that additional tax as opposed to me going to Burger King or Bojangles or McDonalds.
Mr. Kimble said you could cut significantly the capacity of the tax if you carved out fast food
restaurants from the prepared meals tax. You would not then be able to do the strategy that we
are talking about tonight. I hope I didn’t call it a luxury, I called it a choice and there is a choice
and I clearly would not think that eating out is a luxury, it is a choice.
Councilmember Autry said this 1 cent food and beverage tax, that would have to be approved
by the State Legislature?
Mr. Kimble said they would have to authorize it and then the City Council would have to
conduct a public hearing and levy the tax.
Mr. Autry said do we have any indication at the breakfast this morning as to what the appetite
might be in Raleigh?
Mr. Kimble said there have been limited conversations with the State such that they know that
they need to help in some form or fashion with the Carolina Panthers remaining in Charlotte and
North Carolina. We have not been specific with them yet about what that source of revenue
would be, but after we go through tonight, one of the things that we are going to ask for at the
end of the night is for permission to go have that conversation with the State to see what their
appetite is for a food and beverage tax.
Councilmember Cannon said Councilmember Barnes had asked a question about another
revenue source. Speak to rental car.
Mr. Kimble said rental car is at a high price compared to our competitive sets. We are currently
at 16% when we are outside the Airport grounds and we are at 26% when we on Airport
property. That 16% which used to be 11%, but 5 cents was added for the Arts and Cultural
Project. We went to the Legislature and got 5 cents there. There is an 8% road use and then
there is a 1.5% county and 1.5% City and we are currently using our 1.5% to fund some of the
debt on the arena. It is pretty much tapped out, the rental car tax priced against our competitive
set as well and you’ve used it for Arts and Cultural Facilities. What we are trying to do is
allocate these specific revenue sources towards the projects that they can support and be related
to and I think a lot of the food and beverage tax is split between the residents and visitors coming
into this City to spend for the food and beverage tax.
Mr. Cannon said are there calculations on what you forecast that 1 cent represents and if so what
is that number?
Mr. Kimble said you are retrieving $18 million to $19 million a year on Charlotte only 1 cent
prepared meals tax. Currently on Mecklenburg County wide we are about $22 million.
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Mr. Cannon said the last question I asked about that last bullet is, has there been any level of
conversation in the industry about their position? Probably not at this juncture, but I would
venture to say if there is some direction given tonight that ought to be a basic yes.
Mr. Kimble said our first step is to you to make sure that we are communicating with you.
Mayor Foxx said can we hold the questions and move on and come back on them eventually?
Mr. Kimble said not many stadiums get necessarily renovated. The last three have been Kansas
City Chiefs in 2010; Chicago Bears in 2003 and Green Bay in 2003. There was a renovation of
the Super Dome but that was on the heels of Hurricane Katrina and that wasn’t a really good
model or comparison because other different monies came in from the Federal Government from
FEMA, from the NFL to make sure the Super Dome got opened so it was much different. In the
last three renovations in the NFL Kansas City was renovated at $405 million and the private was
$125 million and the public was $280 million, a 69% and 31% on renovations. Chicago Bears in
2003, $387 million for public, $200 million for private for a total of $587 million. Green Bay is
the smallest market, but the most passionate with the most history, owned by the fans
themselves. A comparison that is really strong in comparison with Kansas City and Chicago.
We put it up there because it is one of the most recent renovations, $169 million public, $126
million private, total $295 million. Those are the last three renovations of stadiums outside the
Super Dome in the NFL just for comparison purposes.
We want the Panthers to come up and talk to you about what they have been doing, what they’ve
been planning, how they have been going about sizing up the situation of making major
renovations to their stadium and I think now Mr. Richardson will come first, he will address you
and then Danny Morrison, the President, will come forward and cover a few of these slides and
then Mr. Richardson will finish up with an official ask for partnership and participation from the
City Council.
Majority Owner of Carolina Panthers, Jerry Richardson said first I would like to thank you
Mayor and everyone who participated with us before Christmas on our one on one meetings and
you gave me very good advice, but we established that I was awful at politics. We established
clearly that I was too direct and we established clearly that I wasn’t patient and here I am. But I
do thank you for that. Before I turn it over to Danny and he is going to make some comments to
you, I think it is worthwhile for you and I to reflect just a little bit on an example of us trying to
go to bat for the City. You know I went to bat for you in the DNC I think as strongly as possible
and I think you will agree too. One of the requests the DNC folks made was they wanted to
move the kick-off of the opening game of the season from 8:30 to 7:00. I have a good
relationship with our owners, but we did a calculation and that would have costs every owner
about $3 million to do that, including me. I try to get votes, that is one of the things that is real
important in the NFL and that just wasn’t going to happen. So I called the Commissioner and
Steve Kerrigan was real persistent about that, if you recall, Anthony. I called the Commissioner
and said Commissioner, just listen to me until I finish. Can you visualize Mount Everest and just
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moving it 100 feet to your left? He laughed and said well. I said do you have that visual and he
said I do and that is very difficult and I said my request is very difficult. He said what is your
request? I said I would like for you to move the opening game of the season from Wednesday to
Thursday [actually Thursday to Wednesday]. I thought he was going to have a heart attack when
I asked him the question. Then he said well you know we’ll have to take this to the membership
and I said that is my second point. I would like for us not to take it to the membership because
the membership …. (Inaudible).
I was Chairman of the Committee that selected you as
Commissioner and I’m expecting you to take some leadership. He said what do you have in
mind? I said well you just think about it overnight and I’ll call you tomorrow at 10:00. I called
him the next morning at 10:00 and I said Commissioner, do you have that visual and he said I
slept on it all night. He said what would you like me to do? I said well I would like for you to
make an announcement today at 2:00 that we move the opening date of the season from
Wednesday to Thursday [actually Thursday to Wednesday]. He said what occurred to me during
the night, the only time that has ever been done in the history of the NFL was World War II and
that is a big ask. I said well, we’ve got a big problem down in Charlotte. He said well that is
Charlotte, I’ve got to think about 31 other owners. I said no you don’t, don’t ask them, go ahead
and made a decision. As you know he did and that is what happened. I would like for Danny
Morrison to share some thoughts with you and then I will be more brief in my closing.
Mayor Foxx said let me say this Mr. Richardson, not only did you do an incredibly good turn to
the City with helping to move the opening game of the NFL but the DNC also would have
required the Panthers, instead of having a home game for the first game of the season, to have an
away game for the first game of the season which those opening days are prize, being the NFL,
so we appreciate your willingness to do that and I thank you.
Mr. Richardson said our fans don’t put any credence in that but I appreciate you mentioning it.
Danny Morrison, President said we have three quick slides and really they are updates from
some of our one-on-one conversations. We went to Dave Olsen, who is our CFO to get updated
numbers on the sketch that we did on the legal pad with the numbers. They are slightly different,
public investment $60 million; stadium construction $187 million; financing $108 million; the
capital improvements $50 million and the only really major change is that … about $10 million a
year was more than that. I think we’d used $170 million so it was about $189 million so the total
for cost of the construction, the infrastructure, capital improvements and all the operating and
maintenance since the inception of the Stadium was $594 million. The other interesting thing
we’d talked about was that the $60 million investment from the public has amounted to $188
million from property taxes, sales taxes at the Stadium, admission taxes and also State income
taxes. Since we finished 2012 we were able to recalculate that number and that number was
$215 million, so just an update on that slide.
The next slide talks about the economic impact. As you recall we talked about the study from
the University of South Carolina. We got the report back and I think we mentioned to you it was
an economic impact of about $630 million to $636 million. We heard from several of you, what
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is the impact in the City and Mecklenburg County. We went back to them about the City and
Mecklenburg County and they gave us Mecklenburg County so here are the numbers related to
Mecklenburg County which I thought was staggering. Mecklenburg County amounts were over
80% of that so it is $512 million as the final line item there. In Mecklenburg County, 3,500 jobs
so that would be this number here if you just look at Mecklenburg County and 3,500 jobs and it
would equate to about $118 million in salary and wages. It would be about $1,500 indirect and
then that number was $58 million so altogether about 5,000 jobs, $176 million in salaries and
wages. All that trickles down and I don’t understand all the economics, but the trickle down and
how that plays out in the economy in Mecklenburg County the number is $273 million and then
if you take out the Federal, the impact on the State and local is about $39 million. Altogether
that gets to $512 million. That was the best they could break it down was for the County and I
think the bottom line is you could cut it in half or cut it in two-thirds and it is still a very
substantial number. The other thing we talked about was the emotional side and just to recapture
some of that. We are one of 31 cities that have an NFL Team. If you look at just the exposure,
34 of the highest 35 rated television shows in the fall were NFL games. If you watched any of
the Denver, they just gave the report on this this morning. If you look at the Denver game and
the Ravens game on Saturday, 35 million people were watching that across the country. The
power of the NFL brand and the other thing about the power of the NFL brand is what it enables
us to do in the community. We don’t really pound the drum on this, but through our players and
Riley Fields, who does a fantastic job in the community relations. Here is what happens every
year in our community and across the Carolinas. We have 75 programs every year that reach
2,700 non-profit or schools and reach 300,000 young people. That is every year so those are
sustainable programs.
Finally, what it does just for the community, I think I mentioned to several of you that when I
first came in 2009 we were at a dinner party and what people said when they asked what your
favorite Panther moment was, the lady to my right said every Sunday because it brings our
family and friends together for the tailgating. A lady across the table said my favorite moment
was the Super Bowl ride of regular season 2003 and Super Bowl of 2004. She said I’ve never
seen Charlotte have more harmony, for all socio-economic classes, all races, everybody was on
the same page. I heard that from my friend who is the largest southern art dealer and you
wouldn’t think they would have as much impact on athletics. He was down in New Orleans right
after New Orleans won the Super Bowl and we were at a function and people were asking
questions and he stood up and said I don’t have a question, I just want to make a statement. He
said I could not believe what an NFL Team did as far as community relations until he
experienced it himself in New Orleans after New Orleans won the Super Bowl.
The third slide is just an update on the Master Plan. We got the report back from a populous and
it ranged from a low end and high end. The low end was $261 million and the high end was
$297million. We know the cap is $250 million and we know that anything over that we would
responsible for. We also know that if there is anything under that that stays in the hopper to keep
doing improvements over the course of the next 10 to15 years. Let me break this down just a
little bit more. The escalators $28 million; technology $84 million, just to give you a sense of
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our planning. That includes 2 sets of video boards because over a 15 year period the life span of
a video board is not 15 years. We just put in our last one in 2006 and we are going to have to put
in another one immediately. That is two sets of video boards, ribbon boards and all of that is
about $59 million. Then the other part $25 million is backbone, DOS, wi-fi, all the kind of
infrastructure you have to have for the backbone for the technology, indoor practice facility $27
million. What we are finding is competition wise people are building indoor practice facilities
all over colleges and universities now and it is happening in the pros and that is competitive
advantage/disadvantage situation. As far as the infrastructure concern I’ll give you a couple
items out of that $144 million. If you just take HVAC, back of the house, concrete coatings, all
the kinds of things that you never see, that is somewhere around $49 million. If you take the
ground floor and the concourses on the level 100 and all the improvements on the 500 upper
deck level, that is about $35 million. The 300 level which is the club level is about $29 million
and then about $16 million for the entry gates and the ticketing area, the teams store and security.
That is just a few of the items of the $144 and then at some point over the next 10 to 15 years
you have to replace all of the seats and that is about $15 million. That is just the buckets of some
of the Master Plan. I’ll stop there and turn it back over to Mr. Richardson.
Mr. Richardson said in 1987 I was 50 years old. And I was born in eastern North Carolina in a
farm house with no water. We got water from the well, no electricity and for the first time
Anthony, I owned a house. That was a big deal for me. I left the NFL because where I grew up
$10,000 a year was a big deal. I was the Colt rookie of the year and I went back for third year
they offered me a contract of $9,750 which is $250 short of $10,000. I didn’t give them why that
$10,000 was important to me, but it was. Fortunately, I stuck to my convictions. I left and had
no idea what I was going to do, wife, three children, went to Spartanburg, South Carolina had an
opportunity to invest the $2,000 we got from the championship and I was the third owner of a
company we formed, took to the New York Stock Exchange and it grew to the point where I was
the CEO. We had 130,000 employees within 48 states and three countries, so I’ve been to a lot
of different places. When I was Chairman of the Stadium Committee I met with, similar tonight,
I met with the Mayor of Denver, Seattle, and LA multiple times. The Mayor in San Diego, the
Mayor in Boston and I’ll give you an example of my impatience. I was talking to him and it was
like he wasn’t getting it and I turned his chair around and said do you understand, I picked the
appropriate words, what I’m saying. I do know what you are wrestling with. Our dilemma is,
we are sort of like you are, we don’t have much wiggle room and you don’t either and I clearly
understand it after the one on ones we’ve had. I would hope that this Council would consider the
$250 million, but I hope that we could partner for $125 million with the Panthers. The Panthers
would put up $62 million, the State hopefully would put up $62 million, I think that adds up to
$250 million and as Danny said we would assure there would be no overrides. I’ve been in
Charlotte long enough to know we’ve seen overrides before but we feel it is our responsibility if
we are able to form the partnership which I obviously hope we can, and I don’t know what we
will do if we don’t, but what I tell you we are going to do, which I have told you folks, I have no
intention of moving the team and I hope somehow someway it doesn’t come out of here that I
made a threat. I’m not making a threat and it would be helpful to me that you not even vaguely
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hint that because we’ve got fans out there that expect me to stay here and this is where we want
to stay.
Mr. Kimble said if you all have questions not would be the time because we would then ask them
to leave for us to have a more thorough conversation.
Mr. Cannon said where would the escalators be within the confines of the Stadium?
Mr. Morrison said the architectural plan would be that we want to keep the integrity of the look
of the Stadium, the classic Stadium, so we would pull out the three entrances and they would be
tucked in behind then so actually, visually, the Stadium would look the same on the outside, but
you would pull out the entrances and then come in and go up the escalators there.
Mr. Cannon said I would normally get a question about that whole thing of “but for” there being
any City participation. Have we seen all that we need to see in order to be comfortable with that,
this is natural need that you deserve? How does one respond to that?
Mr. Richardson said it bugs me that we keep talking about my age, but I am 76 years old. I’ve
operated businesses since I was 25 years old. If you operate a business and you do not reinvest
in your business it will eventually fail. We have pushed this as far as we can push it. Now we
have a decision to make. We can stay like we are and there will be deterioration. We will run
the possibility of blacked out games. We don’t want to lose that, that is real important to every
one of you here. A blacked out game would mean that right now all of our games are shown on
TV throughout North and South Carolina and that is two million every Sunday for every time we
are on TV. We don’t want to give that up and I don’t know that we could guarantee that we
could continue to keep the Stadium sold out if the fans can see a deterioration. We could stop
changing out the flowers twice a year, we could stop pruning the trees twice a year, we could
stop cutting the grass twice a week. There are a lot of things we could do but we keep it pristine
and people and our fans expect it to be pristine. We spend substantial money on security. There
are a lot of things we could do, but what would happen, any of you folks who have ever run a
business, it would be a slow slide and that is not good.
Mr. Cannon said the State is actually looking at, I won’t say they have gotten totally away from
farming, but tobacco as we once knew it, is not at the level that it used to be. Instead it is the
tourism, it is pretty high on the radar screen, right? With that, do you feel that at some point you
would be looking to try to lure the Super Bowl here?
Mr. Richardson said we are asked that frequently. The reason we are at 74,000 seats is to
qualify. We use to have to have 72,000. After we got into it our shortfall would be two things
now. The Stadium we can’t qualify. We are not high tech enough so that is one and secondly
we don’t have enough hotel rooms. We’d have to go to Pinehurst, Greensboro, Winston Salem,
Hickory, Asheville, Greenville/Spartanburg and Columbia to get the hotel numbers. So two
things, the Stadium wouldn’t qualify currently and currently we don’t have the hotel rooms. The
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thing that is good and I don’t mean this in a self-serving way, you’ve got to get votes and I’ve
got a good history of getting votes; I can get votes.
Ms. Fallon said is the 10 to15 years written in stone, is that wiggle room?
Mr. Richardson said I don’t get involved in all of that. I’ve stayed out of that.
Ms. Fallon said who has been involved?
Mr. Richardson said our attorneys with the City.
Ms. Fallon said my question was is there wiggle room for the 10 to 15 years?
Richard Thigpen said we started out with a very small tether and we’ve come up to the 10 year
that I’m sure Ron will get to injunctive tether which is a complete tether and after that there is
another thing that wants in for the last five years. Where we are and where the Panthers are we
think that is very fair.
Mr. Richardson said there is a history and we have a history of the amount of money that cities
invest in stadiums and the tether. It really is not that complicated, but as I said I haven’t been
involved in it purposely.
Mr. Barnes said one thing I want to say to you is that when the Charlotte Knights wanted money
from us, the owner didn’t bother to come down here and ask for it. I appreciate you doing that.
Secondly, on that same topic we talked to Ron about the Knights’ ability to pay for their stadium
themselves and how much capacity they had and their ability to pay. You’ve said you can kick
in the $62.5 million. We don’t know whether you’ve got another $8 million behind that and I
haven’t had a chance to ask him that. I figured I would ask you since you are here as opposed to
asking him to talk about the limitations on your ability.
Mr. Richardson said we will start off; we’ve taken on debt from day one. The first year we
weren’t here because we were in Clemson. There was construction between here and Clemson.
We budgeted the first year to break even. We had a $50 million loss the first year. We had the
debt on the stadium. We have just crammed and crammed to pay debt and it just wouldn’t make
sense now for us to load up the business again with that kind of debt. There will be debt, but it
just wouldn’t be logical.
Mr. Barnes said so you are saying your capacity is the $62.5 million?
Mr. Richardson said well, I could load it up just like you could. You could use your credit card
up, that is an option but I’m not going to do that. I don’t think it is reasonable.
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Councilmember Dulin said I’ve got a lot of comments that we will do when we are private, but
I’m sitting here with my mouth closed and my ears open but on Michael’s point about the debt, it
seems to me and Danny you weren’t here when we cranked it up, but it seems to me that the club
level leases on those seats had something to do with, and my seats are not club level so I’m not
involved with that, but it seemed to me there was something to do with those leases when they
rolled every ten years and they’ve only rolled once. It is something to do with those monies
rolling back into debt capacity for debt of some sort.
Mr. Richardson said I don’t know about that.
Unidentified speaker – I can address that. With the original financing, the leases or license
agreements on the club seats and the larger suits are what is commonly referred to as
contractually obligated income. We have contractually obligated income coming into us and we
had to pledge that as securing for the loans that we took on to acquire the team to build the
Stadium. We still have loans at the team level. We are about out of our debt at the Stadium
level but that is the requirement I think you are talking about.
Mr. Dulin said so that money has been used for those purposes and in three years when those
contractual licenses roll back over, is that the pool you think you will use to go after the after the
$62.5 million?
Unidentified speaker – We use all the resources that we have to pay the debt down. We just had
to pledge those contracts as collateral for the loans that we had previously.
Mr. Morrison said I think the confusion is when those are up there is not another PSL, it just
continues.
Mr. Dulin said folks either stay in or they get out.
Mr. Morrison said that is right. If they stay in there is not another fee attached to the PSL.
Mr. Richardson said it is not a windfall if that what you are working towards.
Mr. Dulin said it’s been kicking around in my head for a couple of weeks, but I hadn’t had
anybody that I could talk to about it.
Councilmember Autry said everything that we see here on this list, everybody who goes to that
Stadium no matter what they paid for that ticket, will benefit from everything in that list there.
There is nothing there that is going to be only if you are at this level of the ticket holder will you
have any benefit?
Mr. Richardson said there will be a modest amount to freshen up the suites which are crucial for
the cash flow of the business, but not changing out marble, not reconfiguring. It would be like
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carpet, fresh paint and those sorts of things. The club areas somewhere along the line we are
going to have to do something because they are getting dated, but it wouldn’t be $20 million or
something like that. It is also the kind of thing if we don’t have those funds we wouldn’t do it.
Councilmember Cooksey said I’ve been thinking about this a lot since our conversation, but
when I mentioned I was at the Inaugural Game at the Stadium in August of 1996 because my
history in Charlotte tracks a lot with the history of the Carolina Panthers. I moved here in
November of 1995. What that ties into is I understand the history and appreciate the name
Carolina Panthers, however with this request the lions share, or half of it, is being requested from
the City of Charlotte itself. Is it possible to contemplate changing the name of the team to
Charlotte Panthers?
Mr. Richardson said anything is possible, but I think that is unlikely.
Councilmember Mitchell said Mr. Richardson can you share with us the timeline, when will you
do the renovations because you have pre-season games in August and it is a very tight window?
The season ends around January so that is like six months.
Mr. Richardson said we have six months windows which actually make the construction more
expensive. The idea was to go straight through. One of the things that I contemplated is that we
do it continuously and replay a season somewhere else. It could maybe Wake Forest or maybe
Raleigh or maybe Columbia, but at the end of the day I don’t think that is the best thing though
for Charlotte. I think what he is going to do we will try to do it in two, but it is unlikely we can
do it in two six months windows.
Mayor Foxx said you’ve been standing for a long time and I don’t want to keep you longer than
necessary.
Mr. Richardson said honestly I want to answer any questions you’ve got. I would hate to leave
here and you all say I should have asked him something. I’m here and I’ll answer anything.
Mr. Mitchell said Mr. Richardson, I missed the Chamber trip that some went to the New York
Giants, but there was a question if some reason we lose this great franchise would the NFL
award another franchise to the City of Charlotte again?
Mr. Richardson said what has got to happen, you’ve got to find somebody like me that will work
6 ½ years to spend $5.5 million of their own money and get a vote. That is an honest candied
answer. If you know somebody, you got it, but it takes a long time. It takes 24 votes to do
anything of any significance in the NFL. For example, just say hypothetically, and I’m not and I
want to keep emphasizing, I’m not moving the team, but if I were, I would have to get 24 votes.
Anybody that moves a team has got to get 24 votes. I know this is on record and probably going
to get me in trouble, but I can get votes and that is an important part. When we eliminated
expansion down to five cities, when they voted we were the long shot, but we were the first one
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selected. Here again it is somewhat self-serving, but it is an important decision that we’ve got to
make and I think it is to your benefit as a citizen of Charlotte to have me because I try to make
things better and I pay the price to try to make things better. Things haven’t been real smooth in
my life the last month I might add.
Mr. Cooksey said if the team is bought away from Charlotte, what happens to the Stadium?
Mr. Richardson said I don’t know what they would do, but here is what should happen. You
shouldn’t let it get like that.
Mr. Cooksey said I understand that, but I think in any negotiations you’ve got to find all the
cause and consequences. I was just curious as to what would happen to the Stadium if the team
departed.
Mr. Richardson said if I departed you would have a stadium, but I’m not going to do that.
Mr. Dulin said that comes to a good point though. The asset of the Stadium is part of the estate’s
sale. Upon your passing and the team is sold, the asset of the Stadium is part of that sales price.
If the team is worth $1.2 billion, is $250 million or $3 million of that $1.2 billion the Stadium
asset?
Mr. Richardson said no, it’s a detriment because somebody has got to put the money in. What we
don’t want to hear is the Stadium is at a state where we have to do something.
Mr. Cannon said at some point there will be somebody knocking on many of our doors about
equal opportunity. One of the things this Council and our Mayor has pushed very strong has
been entrepreneurial opportunities. We continue to deal with something in Chairman Mitchell’s
Committee of Economic Development regarding women and minority participation. With that
said and the list of things we see before us today, would you able to say there would be equal
opportunity for any and everybody when the time comes?
Mr. Richardson said yes. I think we have a history of that.
Mr. Cannon said I remember being on Beatties Ford Road back in the day when Sarah Stevenson
and Malachi Green and a bunch of our folk back in the day and it was thank you times three a
million times, but we found that people didn’t know a whole lot about what they were thanking
you for until they got further down the road, then questions came. I just want to ask that
question out front just to make sure that was something …
Mr. Richardson said that is a fair question, but I think my answer is yes.
Mayor Foxx said Mr. Richardson I know you have a strong commitment to the City and you’ve
demonstrated that to us many times and your presence here I think has been helpful. I want to
thank you for being with us and thank you for your commitment to our City.
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Mr. Kimble said they will leave now and we will cover other things. Is there any need to have
any part of the Panthers team stay in the other room in case we have questions for them or would
you like for all of them to leave?
The meeting was recessed at 9:15 p.m. and reconvened at 9:20 p.m.
Mr. Kimble said thank you all for taking this much time and thank you for asking the questions
you did of the Panthers while they were here. That is what was intended and I think it was
important. I want to walk you through where we are in the negotiations right now with the
column “Where We Started with the Panthers” and “Where we are Now”. I will say the
negotiating team for the City has been Curt Walton, before he left, me, Bob Hagemann, and Greg
Gaskins. We’ve been predominately the four that has spent the most time on this and you saw
the Panthers’ Team. Mr. Richardson is getting regular updates from his folks, but probably
Danny Morrison is getting more updates as he is talking to Mr. Richardson, but Walter Price,
Billy Moore, Richard Thigpen and Steve Luquire are the negotiators for the Panthers and who
we’ve been meeting with. We’ve had about 6 meetings, they been real fast over the last 3 to 4
weeks, we’ve tried to compress them and they keep telling us that there is a sense of urgency.
The last slide tonight we are going to talk about is next steps, but before we get there I want to
walk you through these and I’ve asked Bob and Greg to feel free to chime in as we go through
these.
The first is the Source of Public Funding. When they came to us they were silent. They said we
don’t know where you get your money, that’s for you to help figure out in a public/private
partnership what you believe would be the best revenue source. We came up with the 1 cent
Charlotte only food and beverage tax. We’ve done a scan and an analysis of all of the various
revenue sources and this is the only one with the horse power to get to anywhere near the type of
public/private partnership that the Panthers are asking for your participation in. You’ve tapped
out rental car tax, you’ve tapped out hotel/motel tax. They don’t even get close to the kind of
dollars that we are talking about.
Mr. Barnes said you talked about the hotel/motel tax being tapped out and the car rental tax
being tapped out. The food and beverage tax is currently what, 2 cents?
Mr. Kimble said 1 cent.
Mr. Barnes said at what point in your professional opinion would that be tapped out?
Mr. Kimble said right now. This 2% is on the high side, comparatively speaking, and it would
be the cap, the total, the top; You wouldn’t want to go any higher than this and only because it
can help fund amateur sports would the hospitality and tourism industry, who is going to weigh
in heavily on this; I don’t think they would go for this if it was only for the Panthers. They are
going to want to see more opportunity for other projects to be used with the funds.
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Mr. Barnes said what would my effective sales tax rate be in a restaurant with this added?
Mr. Kimble said seven and a quarter plus two cents in Charlotte.
Mr. Barnes said do you know where that ranks?
Mr. Kimble said you can compare that from state to state, you have to compare tax rates on
everything including property tax.
Mr. Barnes said within North Carolina.
Mr. Kimble said it would be the highest. It is generating a tax base job and other things that are
cascading from …
Ms. Mayfield said if we move forward than that would max us out. Other discussion that we still
need to get back to what are our funding options with the Capital Investment Plan if we are
already maxing out two of our main?
Mr. Kimble said you wouldn’t have to invade the property taxes at all for a public/private
partnership with the Panthers or with amateur sports if you chose to do it that way.
Ms. Mayfield said we are thinking about the fact that we just said we are just about maxed out in
both hotel and tourism and now food and beverage if we go up to 2 cents. We are still having the
conversation of different funding sources for this Capital Investment Plan. How is this going to
tie our hands for those discussions?
Mr. Kimble said I don’t think you would turn to the food and beverage tax for funding that. You
would have a war with the hospitality and tourism industry. We are talking about hospitality and
tourism industry related taxes but then relate to assets and facilities that get built and cause
economic return to the community in that fashion. That is an impression and feeling of mine.
Mr. Cooksey said how many more slides after this one?
Mr. Kimble said 4 or 5.
Mr. Cooksey said is your logic about protecting Charlotte only non-county wide with regard to
other municipalities based on instinct and history or have we put feelers out to the other towns to
say how would you react to 1 cent countywide prepared food and beverage tax to help keep the
Panthers in this county?
Mr. Kimble said we have not done that because we are fearful that you have to go through the
County Commissioners to go to the towns and right now our feeling is the County
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Commissioners are reeling and not in a situation where they would look favorably upon this right
now.
Ms. Fallon said I spoke to some of them and they said don’t even think about coming to us.
Mr. Cooksey said could we start with 1 cent in every municipality in the county and by-pass the
County Commissioners altogether?
Mr. Kimble said you could, and that could be a conversation that we have with the State. I think
they are going to want to look at solving the crisis of the Panthers more so than general items of
interest that each municipality might have. We can ask them.
Mr. Cannon said can that food and beverage tax only be used for certain things?
Mr. Kimble said this proposal would say it could be used for sports and the amateur sports,
nothing outside of that because I think that is the way to limit it enough so that you could
accomplish two important priorities in this community. One is keeping the Panthers and the
other is putting amateur sports facilities and programs in a greater way in this community to
drive week-end business to hotels and restaurants through amateur sports that we have capacity
to fill those businesses in a better way with amateur sports.
Councilmember Howard said I’ll be honest with you Ron, when you first said something about
amateur sports my first thought was why so I think I would like to hear some thought from you
about why that would even be a part of this.
Mr. Kimble said to gain the support of the Hospitality and Tourism Industry because they are
going to have to be fighting for this with you and it is a priority of the City Council for the last
four years in their Economic Development Focus Area Plan and there is a study that shows that
amateur sports currently is a $232 million economic impact to this community and it could grow
by significant amounts over and above that if you invest in facilities that causes that to happen.
Mr. Howard said I’ve supported and was a strong supporter of the CIP so it is not anything
against amateur sports at all. I just know that if we don’t include that, that penny could be less
than that. That is the first thing.
Mr. Kimble said this is strategic and I haven’t mentioned it yet. The short-term solution of the
Panthers and amateur sports for 15 years with a 1 cent Charlotte only food and beverage tax is
important but some day this Stadium is going to age out and it is going to need to be a new
Stadium to replace it. After you exhaust in debt and pay down the improvements in this
partnership then you’ve got a free and clear 1 cent Charlotte only food and beverage tax that
could become the public portion of a public/private partnership to build a new stadium in
Charlotte when this one ages out. This is both a short-term strategy and a long-term strategy
using the 1 cent Charlotte only food and beverage tax.
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Mr. Howard said where I was going with all of that is I’m having a hard time trying to figure out
why this is a hard one. The Mayor talked a little bit about what Charlotte was like and I guess
being a Charlottean, I just remember that it wasn’t until we got the Hornets and then we got the
Panthers, and anything significant as far as growth started happening around here and I think that
has a lot to do with the fact that Charlotte showed that we could support two professional teams.
I’m not certain why we need to incentivize the hospitality and tourism because they get a huge
chunk of that economic development and economic impact money that comes in. One of the
reasons why we don’t need to talk to the towns is that 80% of the money stays right here in
Charlotte. This is just one of those times, and you’ve heard me give this speech now for a year
because I gave the same one for the CIP. We are either a big city or we’re not. You know we
lost the Hornets and a lot of it had to do with whatever that situation was, but once we lose the
Wachovia. We are actually kind of teetering on whether or not we are at the next level or not.
This is not one of those messages that we want to send to recruiters. I’ll be honest with you, I’m
thankful he didn’t ask us to help him build a new stadium because I’m not sure we could have
told him no to that. It just means that much to the City. I’m telling you as a citizen of Charlotte
this is just not an option for the economy of this City, it is just not one. I don’t know what
Charlotte is if we are known not only for having gone through the NBA thing, having lost
Wachovia and now doing this, that would be devastating to this community.
Councilmember Kinsey said not getting the CIP passed.
Mr. Howard said one should have nothing to do with the other. If we are going to be a big time
City you got to be able to chew gum, scratch your head, walk and spit and do everything else.
Either we get it or we don’t and if we are scared to be big time then let’s say that, but what we
cannot do is keep playing with this. If he had asked for a dome stadium I would be raising my
hand. We cannot lose the NFL.
Mr. Autry said do we know where they want to build that practice facility?
Mr. Kimble said I think that the practice facility is not a core need right now, but we’ve
entertained building a bigger Ovens and Bojangles was one of our thoughts, but they wanted to
be adjacent to the current facility. Given that, I don’t think there is land because they don’t want
to take the practice field and put it in coverage and make it indoor. I don’t know where in close
proximity. That may be one of the things they are going to talk with the State about for funding
part of the State’s $62.5 million. We have not settled on the package, but it will be a $250
million package out of the $298 million they have put there and if they want to do anything over
and above that that would be on their nickel. The practice facility I don’t think is in the core
function of the things they want to do.
Mr. Autry said we are going to finance that for 15 years, but tether the team for 10 years? If they
walk in 11 years?
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Mr. Kimble said that is on the next slide, but you are reading our minds.
Mayor Foxx said we can let Ron kind of explain the deal or we can continue. I’ve got the list so
I know where people are in terms of wanting to speak.
Ms. Fallon said I’m not happy with 10 or 15 years because 15 years pays him back and has $25
million left over for sports or whatever, or fixing up Bojangles and Ovens. Twenty years gives
you that plus money to keep going and by then they will need a new stadium and we’ll be all out
of it. Ten years is not enough for what he is asking.
Mr. Kimble said we’ll show you that it is ten years injunctive relief but then there is another way
that you get assets or money. You get an asset in years 11 – 15 and we will walk you through
that.
Ms. Fallon said I really like 20 years or at least 18. I spoke to Walter. More than the 15 Ron.
Mr. Kimble said that is something for the Council to say tonight to cause us to go back and
negotiate more if that is the way you feel. The best we could get is what I’m going to show you
here and it was real tough because of where we started out and where we are. That is why we are
in front of you to get your feedback so we can then go have another conversation.
Mayor Foxx said why don’t you just go ahead and go through the next slide.
Mr. Kimble said we started out with this, just so you know, and this is where we are right now.
The length of financing, they first talked about 20 years with us, but I’ll show you what they said
and the tether would be for 20 years and we did not like that. So then we came back with
shortening the length of the financing to create more capacity and the tax sooner for the next
iteration which is a new stadium and trying to get them locked in for 15 years, lined up with the
15 financing.
Ms. Kinsey said but we are not locking ourselves in to finance a new stadium are we?
Mr. Kimble said no, that will be a discussion with the new owner. Once Jerry Richardson
passes, they will sell to a new owner and one of the first things a new owner will come to you
saying is let’s talk about building a new stadium because this one is going to be exhausted in 15
more years.
Ms. Kinsey said if they know we’ve got that kind of money, of course they will. I’m going to be
dead and gone probably by then.
Mr. Kimble said that was the tethering on the legal and on the next page is the relocation
payment. They first started out with no injunctive relief, no specific performance that says they
cannot leave. Then they responded with five years, but we were able to get them to ten years.
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That was the best we were able to do and what that means is if Mr. Richardson or a new owner
tries to leave Charlotte within that ten years we can sue them for a specific performance in a
North Carolina Court and it is highly, highly, highly likely that a judge, if you have this in here,
is going to support the City’s position, that they cannot leave, they must play their games in
Charlotte for 10 years. We tried to get higher, we worked on it and we got them from zero, they
went up to five; we eventually got them to ten and that is where we are today. What they are
saying is with the amount of money that goes into these renovations is directly related to the
tether that you are going to get. You heard them say that in this room. Because our renovations
are on the lower side of what is going on in the NFL they have been very unwilling to give a
longer injunctive relief specific performance longer than 10 years. The next page is the
relocation penalty. What happens if they do leave, the judge in the highly, highly unlikely case
that a judge does let them leave, we further backstop this with, they’ve got to convey the
Stadium and improvements to the City at no cost or we get to choose the Panthers pay to the City
the liquidated damages of the debt financing declining by $8.33 million per year. What they first
had was silent by relocation payment, then they responded in a 20-year financing declined by
$10 million per year for the first ten years, a flat $25 million if they leave in years 11 through 15
and a flat $10 million if they leave in year 16 through 20. That wouldn’t even cover our debt
financing if they bolted in that time than we had more debt and outstanding than what the
payment of relocation was made to us.
Mayor Foxx said let me ask you to translate those options that you just described. If the Stadium
coming into our hands is what it is, I don’t know if I’m crazy about that, but the other option of
the declining amount by $8.33 million. Just translate this for me. If they decide to move in year
12, will we get back the amount of financing that is left on our meter?
Mr. Kimble said no, but let me go back and explain it. If they leave in the first 10 years, you
have injunctive relief. If a judge says they can leave, then we get to choose; we either get the
Stadium given to us at no cost or we can choose to take liquidated damages declining by $8.33
million per year. The debt starts out at $125 million and it decreases over 15 years by $8.33
million.
Mayor Foxx said in my experience when you say the remedy is injunctive relief, the remedy is
injunctive relief. When I start laying out other options, the judge says well why did they put
injunctive relief in and then put these other options in. Can you tell me how that would be
crafted?
Mr. Hagemann said when we went into this one thing Ron and I did was, we took out the deal
that we did with the Bobcats and used that as a framework. We have with the Bobcats a 25-year
commitment, 25-year injunctive relief back stopped by liquidated damages on a declining scale,
so we don’t think you would ever get to it and we think the injunctive relief is so strong that you
would never get to these. We wanted some back stop just in case we get into some kind of crazy
court ruling.
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Mayor Foxx said I hope that whatever you would craft would say this is only here in case we get
some kind of crazy ruling.
Mr. Hagemann said we’ve got great language in the deal with the Bobcats that we’ll replicate.
Why might we want to own the Stadium, we thought about this. Let’s say a successor owner
figures out a way to bolt in the first ten years or by the writing a check after that and it’s
acrimonious. They have left Charlotte and they turn around and say oh by the way City of
Charlotte, that land you own has a stadium on it that we own, we are going to let it rot, unless
you want to buy it from us. We did not like the idea of potentially having lost the team and then
on top of it being forced into writing a check to buy the stadium so that we have control of it and
maybe can redevelop it.
Mayor Foxx said let’s say that some future Council; let’s say that happens. We got the stadium
and we decided well maybe there won’t be a football team here and we will demolish it. The
demolition cost alone has got to be astronomical for that.
Mr. Hagemann said that is not a great situation to be in. We called it an option, we don’t have to
do it, we figured we would be in a better position as a City than having it be privately owned
with the unlikelihood that they would spend their money to demolish it because the only thing
they could use the land for that it sits on, which we own, is a football stadium. We saw that as an
opportunity for a spiteful owner who is taking his team away to stick it to us once last time and
say basically it can sit here like Eastland was and rot unless you want to buy it from us.
Mayor Foxx said I get what is happening in the first 10 years. I’m talking about years 11
through 15.
Mr. Kimble said because we couldn’t get the injunctive relief longer than 10 years, I think we’ve
got the best that we can get after that, which is if a new owner, and it won’t be Jerry Richardson,
it will be a new owner, tries to leave in years 11 through 15, that if they won’t give us the
injunctive relief, we need to get the Stadium and the improvements and the Stadium we didn’t
pay for, they paid for the initial Stadium with their nickel, $187 million and they’ve put in $50
million over time so it has probably got $300 million in it and we put in $250 million more of
improvements over the first 10 years so the Stadium has value if a team bolts and we need and
try another team. We have a stadium that is still able to be played in, it is not an antique and an
archaic stadium, it still can be played in until you’ve got a new team here and negotiated a new
stadium deal.
Mayor Foxx said in years 11 through 15, if a new ownership group comes in and they decide to
go someplace else, would we get stuck holding debt beyond what the payback is?
Mr. Kimble said no. The debt would have a 15-year life on it, it would be paid down up through
15 years and you would own an entire stadium, not just the improvements.
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Mayor Foxx said that is not what I’m asking. I’m asking would the team pay us the portion of
debt outstanding.
Mr. Kimble said no, they would just give you the Stadium and the improvements.
Mayor Foxx said that is a clarification I think that is important for everybody to understand.
Mr. Kimble said that was the best we could negotiate is what you see screen, but that is from a
bond council and from a bond perspective, we own an asset now that we are paying just the debt
on the improvements and that is looked at favorably in the market place.
Finance Director, Greg Gaskins said this is the way we thought of it from the financing side
for the 15-year period. Yes, 11 through 15 there is some exposure. You have the revenue
sources paying it back. The issue is you have put nearly $250 million into that stadium and your
value is going to be pretty high and you’ve now provided the land with the building so you
control it. Even if you don’t do anything, the amount of debt remaining versus the asset you
bought is to your advantage so much so that a new buyer is going to be very reluctant to leave in
years 11 through 15 because they would be leaving more money on the table than otherwise
would be. So value wise they would have a real decision to make about giving up that value.
That stadium would be worth more than the debt that is outstanding.
Mr. Kimble said Mr. Richardson’s point is a valid one, 24 owners have to vote to allow a new
owner to leave a community, leave Charlotte, and if the Stadium is kept in pretty tip top shape
and the fan base is still there, there are not going to be 24 owners who are going to let a new
owner bolt from this community if it is a good stadium and the fan base and attendance is still
up.
Councilmember Pickering said if we lose the team, the City moves backward and the budget
and this matter are two separate things.
Mr. Barnes said Mr. Kimble I want to ask you some questions and please don’t leave me until
I’m done. Regarding the issue the Mayor raised about timing, I have a related issue on the food
and beverage tax which relates to the past sales tax which went through some trouble during the
(inaudible). If food and beverage tax sales tax revenues drop off how will that impact our ability
to fund the Stadium?
Mr. Kimble said excellent question. To most of you the hospitality tax fluctuation in the market
place is the food and beverage tax. If you look at its volatility over the life of the food and
beverage tax it‘s only gone below a zero percent increase one time in its history. It is the one
that is most stable of all the taxes. That makes it even better.
Mr. Barnes said initially I did not press very rigorously as I should have regarding visibility to
pay more of this. You mentioned a credit card issue as I understand. It left an impression that
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there is no profit in that business and I cannot believe that is true. What did you do to confirm
their ability to pay more than $62.5 million of this obligation?
Mr. Kimble said we have not looked at their books. We have not gone and had the opportunity
for them to open up their books to us. I believe that what you are going to find is that each
negotiation in an NFL city is going to be dictated by how you are going to reach consensus and if
you want us to have somebody go in and look at those books, I think we are in for a very rocky
road.
Mr. Barnes said it is a private business, they are asking for public money, they got to be willing
to open themselves up to some scrutiny from us because the fact of the matter is they could have
a half billion dollars in cash and we are going to give them $125 million of City money and be
essentially, in my opinion, taken advantage of.
Mr. Kimble said I will not dispute your comments. We have not looked at it and it will open up
a war.
Mr. Barnes said I’m putting it out there as a concern. Also when I met with them, I talked about
the idea of this region benefiting from that team and the State of South Carolina benefiting from
the team because the training camp is in South Carolina and I asked about whether the State of
South Carolina might be willing to help. Obviously, they didn’t try. It really bothers me that we
went from not only Mecklenburg County but excluding the Charlotte Regional Partnership…
(Inaudible) not in Mecklenburg County, but literally now in Charlotte paying for this and to the
point Mr. Cooksey raised, perhaps it should be the Charlotte Panthers at this point, because the
only people kicking in apparently is the people of Charlotte from the public perspective and the
State and I don’t know where the State is going to get its money from. Most likely that is
coming from me too as a state taxpayer.
Mr. Kimble said if we are not careful a new owner could come in and want to work with the
State of South Carolina and they could build a stadium just on the other side of the State line.
Mr. Barnes said that wouldn’t surprise me. Everything is so cut-throat now. It is extremely
difficult for me, even though I heard what Mr. Howard said support doing this when we can’t
even pass the CIP. I recognize the two are different pots but the idea of saying this is going to
raise your food and beverage tax to pay for this but we can’t do sidewalks and pave roads, it is
problematic. Again, expressing my concerns, it bothers me that you weren’t given an
opportunity to deal with the Knights, which was to dig into their numbers.
Mr. Kimble said what we know is where they rank on a scale of 1 through 32 in terms of value
for the team, they are 16th. They are dead in the middle of the value of the team and this is a
smaller market and there is going to be, I think, because of those variables there will be a
public/private partnership that has to be right for this community, and based upon your policy
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positions. If we go and ask for the right to examine their books I don’t know where that is going
to go.
Mr. Barnes said I don’t know that what you just set yours on, that it is right. Do you see what
I’m saying? That is the problem I have. I don’t know that them not letting you look at their
information puts you in a position where you can give us truthful information.
Mr. Kimble said I think probably what you would have to do is hire consultants to go in and look
at those books and then the consultants who are experienced in this kind of looking at sports
franchise information, so you are going to have to spend some money.
Mr. Gaskins said I did check just to see if this question came up, and obviously there are people
who do that type of thing and with some of the deals, and not all of them, that has been done.
Obviously, there are very reluctant people to know where that is so they are generally trying to
find a way for somebody to look at it to disclose only capacity or something but not their real
books. They are very secretive about it. Just in talking to somebody who does that, I would say
in my opinion that they probably do not want to do more than having to do with the value of the
team and what is going to happen afterwards. They are probably basing what they are willing to
do on what the other deals have been that Ron went for.
Mr. Kimble said Mr. Richardson was head of the Stadium Committee for the NFL. He knows
inside and out every deal made, which he is very shrewd and we have to be careful about the
deal.
Mr. Barnes said we should be equally shrewd because you were shrewd on the Knights coming,
you were shrew on the cultural facilities for Wachovia and there is no reason for us not be
equally shrewd on this, in my opinion.
Mr. Kimble said with the Knights we looked at summery data but we did not look at the actual
books.
Mayor Foxx said is that your last slide?
Mr. Kimble said no, I’ve got two more, the Stadium Ownership. First they wanted to have us
buy the Stadium for $100 because they retain the right to repurchase it after ten years for the
same $100. Then they wanted to lease the Stadium plus the improvements under this scenario at
fair market value, then they wanted a management fee that was approximate to that in the
negotiation. The bottom line is they wanted to be relieved from property taxes. The only thing
then that would be left when they leased would be intangibles property taxes and there is a
movement in the General Assembly to eliminate intangible property taxes so we believe it was a
move to avoid the payment of property taxes altogether with General Assembly action. What we
did was the Stadium to remain owned by the Panthers, the Panthers to lease the City
improvements valued at $125 million of fair market value, we pay a management fee back to the
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Panthers for operating these improvements and thereby the real property taxes, business,
personal and intangible property taxes continue to be paid by the Panthers. Still subject to
whatever the General Assembly might do with tax reform because there may be a movement to
adjust real, business, personal and intangible property taxes in some form or fashion by the
Legislature. This at least causes them to continue to pay what they’ve been paying until the
General Assembly takes some action. We wanted them to continue to paying property taxes.
Mayor Foxx said what is the Management Fee?
Mr. Kimble said it would be for managing the improvements that we’ve built and leased to them,
but they would be managing it.
Mr. Hagemann said it is a Federal Tax driven issue. If we were to just give them the
improvements, the IRS would come in and treat that as income and they would pay tax on it.
They believe that if we lease what we pay for at fair market value, they don’t have to pay income
tax on it. They think we can pay them back with something that approximates what they are
paying us in rent and the IRS will be fine with that. That is their risk and they are taking it and
we are not opining, but the structure is driven by their desire to avoid paying income tax on $125
million.
Mr. Gaskins said they will pay income tax though on that revenue that comes back to them.
Ms. Kinsey said is it a wash?
Mr. Hagemann said yes, it is a wash to us. They will pay us rent and we will turn around and
pay them about the same thing to manage the assets, so it is a wash to us. It would be a wash to
them and they are taking the risk if the IRS disapproves that. They claim to be confident that it
passes muster. We don’t know.
Mr. Kimble said the Panthers pay $1 million per year and the City pays $1 million. All of these
renovation deals have now talked about how you jointly put money into a maintenance fund. We
did the same thing with the Bobcats. This is a similar model where you both are responsible for
putting maintenance monies for the next 15 years into the stake.
Ms. Kinsey said where does that money come from?
Mr. Kimble said the food and beverage tax. The beauty of the food and beverage tax is the
capacity of the food and beverage covers the things in this deal plus the things I’ve talked about
with amateur sports. That is what we’ve been trying to craft strategically is handling two of your
priorities in this one negotiation with the Panthers. Because we’d be putting in this million, I
said I want something back for it. They didn’t like the fact that I was going to ask for City and
CRVA free rent of the Stadium because every time the ACC Football Championship, the Belk
Bowl and the Labor Day Football Game is held in the Stadium, whosever booking that pays
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$250,000 rent each day for using the Stadium. If we are putting in this money, I wanted
something back for it and what we were able to negotiate, they reluctantly, and we hounded them
pretty well on this, they are going to give us Belk Bowl rent free. That is important because we
are trying to elevate the status of the Belk Bowl to get an SEC in here. Don’t breathe a word of
that. We are trying to make sure we can put together the right package that we can make sure
that we get a better Belk Bowl for the future. We also get four new events between January and
June rent free as well. If a concert and a major international soccer game get those other dates
we want to book between January and June.
Mr. Dulin said on the rent free there is still costs, who pays for the electricity?
Mr. Kimble said you pay the Panthers’ operating costs, but you do not pay rent which is
$250,000 each day that the facility is used.
Parking Revenues – They wanted to receive all game day parking revenues at a designated site
provided by the City. In other words they wanted us to build them a parking deck. We said no.
We said we are willing to consider a 50/50 split on net revenues from the NASCAR Hall of
Fame excess parking deck spaces that we get use of over the weekend and if we can drive more
parking to that 400 weekend office parking spaces and we can all get better revenue, we would
be willing to split that on a 50/50 net revenue, after costs are paid. They said they are willing to
talk about that and I think that is a good solution to it because we’ve both earned extra revenue
that way.
Game Day Traffic Control Expenses – it has stuck in their craw for the last 8 years that the State
and the City used to, I think, jointly provide game day traffic control and the Highway Patrol
pulled out and we pulled out and it is all now handled at costs for the Panthers and they are
reimbursing us for our off-duty Police Officers I believe as we conduct periphery game day
traffic control for the Panthers. They have wanted us to negotiate; they wanted an unlimited
amount as incurred by them. We looked at it and we are looking at a $250,000 per year for
Panther game day documented costs and that can be covered inside the food and beverage tax as
well. What we’ve done is that anything negotiated in this deal, we’ve walled it off from the
property tax and we’ve found a way to include it in the capacity of the food and beverage tax in
the language that we would propose for the Stadium.
Ms. Kinsey said what are they paying now?
Mr. Kimble said I think they are probably paying somewhere just north of this, probably
$300,000 to $325,000.
Ms. Kinsey – comment inaudible.
Mr. Kimble said this is us paying $$250,000, you want to pay less.
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Ms. Kinsey said I don’t want to pay anything.
Mr. Kimble said I know, but they are negotiating this.
Ms. Kinsey said they ought to pay something.
Mr. Kimble said they are paying something, probably $75,000.
Ms. Kinsey said I would like for them to pay more.
Mr. Kimble said okay, we will carry that message back to them. We want to make sure that
they are doing exterior improvements with the escalators. There is an urban mixed use
development review of the improvements to be sure that the Planning Department signs off on
and they acknowledged it and we said they must receive UMUD approval and then Mr. Cannon
mentioned the question about SMWBE. They acknowledge it and we need your help in
negotiating what we feel is the right SMWBE goals based on your new program and what we
want them to accomplish. They have acknowledged that.
Next Steps – What we need to do is we have to approach the State and we need to approach the
State sooner rather than later so what we are going to be asking for tonight is your permission to
approach the State to start talking about food and beverage and $62.5 million put in by the State.
What the next steps might look like is the State response would then come back to you in a
Closed Session in early February. Then when or if the City Council concurs with any business
terms thereafter, you would then instruct us to go off and write the full development agreement
between the Panthers and the City. The state of North Carolina would have to authorize the City
of Charlotte to be able to levy a food and beverage tax. We would have to approve the
agreement with the Panthers and that is a public hearing and a vote on the levy of the Charlotte
only food and beverage tax and then the food and beverage tax would be implemented on July 1,
2013. That is what would have to happen to put all of this into place.
Mayor Foxx said when would the second vote on the State’s response come back….(inadubible)
Mr. Kimble said are they open to having a food and beverage tax passed on our behalf and are
they willing to put in $62.5 million for the Panthers?
Mayor Foxx said so at some point between now and July 1st, the State would actually have to
pass a bill and give us the authority. Do you have a sense of when the timeframe for that might
be?
Mr. Kimble said I think the earliest you are going to get that from the State is April. There is a
local bill deadline, and they might be able to finesse something that we don’t know about if the
leadership of the General Assembly is interested in this, but I think you are probably looking at
April at the earliest.
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Mayor Foxx said but you would be working before then to develop a full agreement?
Mr. Kimble said no, we are asking for your permission to go talk to them.
Mayor Foxx said I understand what you are asking for; I’m just trying to understand the
sequence. We say yes, go to Raleigh and find out. You get an early signal from them as to
whether they are open to it or not. You start negotiating an agreement, but you do that before we
have a bill and action approved by the Legislature?
Mr. Kimble said the development agreement that we are putting together would say that it is
conditioned upon the passage of a food and beverage tax by the State of North Carolina.
Mayor Foxx said I’m not arguing the point, I’m just saying is that what you are telling us. You
are negotiating before the State approves anything?
Mr. Kimble said yes, but there is one thing that you’ve got to concur with business terms. We
are not going to go any further toward that until you concur with that.
Mayor Foxx said I understand, I’m not fussing with you, I’m just trying to understand what you
are saying.
Mr. Cooksey said could we do a nod now to see who wants to be involved with negotiating?
Mr. Howard said before Patsy leaves how does that work? Does she have to be officially
excused?
Ms. Kinsey said the Mayor just asked and he said I could be excused.
Ms. Mayfield said I did that one time and my vote still counted as a yes.
Ms. Kinsey said I’m a no.
Mr. Hagemann said just in case you proceed to take a vote, she counts as yes on any motion
unless the Council votes to excuse her.
Motion was made by Councilmember Cooksey, seconded by Councilmember Kinsey and
carried unanimously, to excuse Councilmember Kinsey at 10:08 p.m.
Mr. Cooksey said I was thinking about Mr. Howard’s passionate speech earlier to try to say let’s
go ahead and vote now and see if keeping them here at any costs is a deal. We don’t need to go
through hearing the next steps.
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Ms. Fallon comments inaudible.
Mr. Cooksey said I understand and I appreciate that but I wanted that clarification. It disturbs
me when the idea exists that this city rises or falls on one thing. Whether that was your intent or
not I was interpreting his speech is this will be one thing that demolishes this city. Portland gets
along fine without a professional football team. Los Angeles desperately wants a professional
football team but if we are defining ourselves, particularly after we vote investments basketball
that you also help with minor league hockey. We’ve done arts facilities and NASCAR Hall of
Fame and that is pretty much a lot of it there. If one thing is going to lead to growth in Charlotte
becoming inclined, then we’ve got a bigger problem than this one thing. I also think about the
fact that when negotiating one man who was offered $9,750 for which in today’s money is
$75,000 to play in his third season of professional football which clearly was his dream and he
walked away over $250 which today is about $2,000 in the equivalent. This is a guy who
understands principle about what his life is and what he stands for. I’ve looked at this and my
temptation is to just say a no to it, but I look at this list and I don’t think we are getting enough
for the money we are putting into it. Essentially I appreciate the four free events and the Belk
Bowl free and a couple of other things, but to me in the space of $125 million those are small
potatoes. We are not getting much but the status quo out of this. I want the team’s name to
change to Charlotte Panthers.
Mayor Foxx said just on the general concept of we are not getting as much out of this as we are
putting into it, how many feel that way. This is not a vote.
Mr. Cooksey said I don’t think we are getting $125 million worth out of this deal, that’s what my
hand is up for.
Councilmember Mitchell said I hope we can support this and this is really about advancing and
letting the State do their due diligence about finding the resources because I want the heat to be
away from this City Council and now let it focus on the General Assembly. We have so much
on our plate that we just need time to breathe. Ron mentioned this might come back to us in
April. I think then Council we have another time to really kill it, get more information, negotiate
more so you feel comfortable getting the value. I think tonight if we vote to just kill it we are
sending the wrong message almost like we don’t want to review it or to study it anymore. If you
think they bring somebody to the community and to this city what is wrong with allowing the
process to take place. You are not losing anything. We are not spending any resources and
Andy you love to say we are tying up resources, but we are not even tying up resources. The
State is doing everything. Our Governor has said that there is no money right now. I think the
State has a bigger problem than we do. I think tonight is easy for us, say yes and let the media
run to Raleigh and say how are you going to get this deal done and let us move on and do the
things that we can control locally. I think if we say no tonight then we are going to have the
media on our doorsteps interviewing each and every one of us saying why did you stop this, you
don’t think competence at the state. I think it is tough for us separating the CIP from this. I tried
and Raleigh tried and we just got CIP lingering effect. But ladies and gentlemen let’s be honest
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in this room, this is isn’t about Jerry Richardson. The CIP fell on the 12 of us in this room, so
don’t put this on Jerry Richardson that the CIP has failed and it is Richardson’s fault. We’ve got
to look at each other, the way we voted and the decisions we made. I have no problem when we
go out of this room, I hope there are speaking points Kim that you have prepared for us that
clearly we are all on the same page in what we say because the media is going to do a good job
of trying to find out how the votes went down in this room. I think we ought to protect one
another and just say either we supported going to Raleigh or we didn’t.
Motion was made by Councilmember Mitchell, seconded by Councilmember Fallon to
approach the State General Assembly to make an official ask of the State on Point #1.
Mr. Cannon said I wanted for the record to raise a red flag on where I am and in having some
conversations with the City Attorney. I’m going to have to have further dialogue with the City
Attorney. He thinks it is worth us having further dialogue in terms of making sure there is no
conflict of interest on my behalf as we move forward. In terms of what Mr. Mitchell has laid out
in terms of taking the next steps, it will give us some time also to continue to work through if
there are any real issues that would prohibit my level of participation. With that said, tonight I
guess it is probably best that I not vote at least for this first piece until we get more information
to determine what the status actually is.
Mayor Foxx said can you state further the nature of your conflict.
Mr. Cannon said obviously I’m in the parking business and I do some level of parking for the
organization so I want to be careful I’m not stepping in a pot of water that possibly could cause
some area of concern.
Mayor Foxx said there is a request I think to recuse Mr. Cannon from this vote and he and the
City Attorney will have further conversation.
Mr. Hagemann said we have not made a determination if he has a conflict and we need to
explore deeper, so this is not forecast future action.
Motion was made by Councilmember Dulin, seconded by Councilmember Mitchell and
carried unanimously, to recuse Councilmember Cannon from voting until such time as
opinion from the City Attorney’s Office that no conflict exists.
Mr. Howard said I think we have to think about the long vision of this community and I also
wanted to try to convey that having lived here all my life, I know what the sports teams did for
this community. When I say do whatever we can, I mean do whatever we can, I don’t mean do
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everything. I think it is naive to ask this owner of an NFL Team to do anything different than
what other cities have asked of their NFL Team Owner. We sit here and talk about stuff Warren,
I hear you on the whole Charlotte thing, but you know it is not that simple. There is a whole
bunch of stuff that goes into that and I’m think it is also naïve to sit here as a body and not even
acknowledge that every time we are on national TV, every time we are part of this national thing
called NFL we are not getting something from that. I will guarantee you if Bob Morgan was
here tonight, he would tell you that his idea of one recruitment of a company to this city, it didn’t
include us bragging about being a two professional sports town. There has not been one that has
happened since they got here that didn’t include that as a main thing. I think I’m a little irritated
that we are sitting here talking about this one thing in a vacuum knowing good and damn well
that we’ve had a sweetheart deal with this team for years because they have never really asked us
for anything. We’ve got to take all of that into consideration and that is what I’m saying. To
have had a sweetheart deal like we’ve had, to be asked to participate in something. A lot of
teams and the guy down in Atlanta is asking for a new stadium and it is far enough to understand
that their economy could go either way and that is not one of the things they are going to take off
the table. They are going to do it. They’re going to figure it out. We are blessed that he didn’t
come and ask for that. This is a guy who has actually been really good to this community in a lot
of ways. Even now he could be asking for more, but he’s not. That is what I’m trying to say
when I say, I don’t see how we don’t do this. Now if he was asking for something above and
beyond any other NFL owner and he was trying to take advantage of us and had taken advantage
of us, I’d probably be with you. That is what happened with George Shinn and you can look at
George Shinn and see how that turned out for the City. That didn’t turn out well for us and we
still got that black mark. Let’s be clear. All I’m talking about is the fact that we need to be
clear. We are sitting here as 11 people, that are here for two years, we will go on and do
something else and what we are doing here tonight has an effect on this community for a lot of
years beyond any of us being elected or being re-elected. Michael, I respect you, we have to do
what is best for the taxpayers that elect us, but it is not just these, it is the future ones as well.
Actually what I was trying to say is doing whatever we can do and not asking to do anything
above what other people have done to keep the team in this city.
Ms. Fallon said I’m going to vote to retain them. I think they are very important to Charlotte. I
think they brand us. I think Charlotte is the Panthers and the Panthers is Charlotte. They are
known way. He has done an awful lot for the city and paid taxes for 20 years. We are getting
something back. The only thing I do think if we could negotiate a longer time and I think he
would be willing to talk about it. That would make me happier, but I will vote to retain them and
explain it to people because they will not understand why after my baseball vote why I would do
it. This is an established business who has paid taxes for all these years, he is good to the city,
he’s good for the city and I don’t see what the problem is going to be. We spend money on a lot
of things that lose us money. This is a necessity.
Mr. Barnes said with respect to the General Assembly. One of the concerns I have is that they
will say yes we will grant Charlotte the authority to raise its food and beverage tax and yes we
will also grant Charlotte or Mecklenburg County the authority to raise some other fee in
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Mecklenburg County only to pay for the $62.5 million that you want from us because we don’t
have any money. Pat has said it and Thom Tillis has said it, but they’ve all said it. Guys we
don’t have any money. So I’m worried about them saying you can have your penny for the food
and beverage and then there is also another penny or some other fee or tax that we will be
assessed on Mecklenburg County or Charlotte residents only. What I’m wondering Mr.
Attorney, Mr. Deputy Manager is what sort of language you can put into our authority if it would
grant us and it will, to go to Raleigh that says that if the State’s option for its $62.5 million is
something that rests solely on the residents of Charlotte, that we are out.
Mr. Kimble said my answer would be that the same discussion that you are having about the
importance of the Panthers to the community and to the State is a conversation that has been had
once or twice already with that General Assembly leadership by the Panthers themselves. The
Panthers are pretty persuasive when they go to the State and if you look around the NFL in a lot
of the communities, not only do the communities participate, but the state contributes as well.
We have to depend on the Panthers also creating a persuasive argument to the State of North
Carolina, but we need to be in the room with them so that we all know what is going on when the
response comes back and we can all be receiving it and hearing it, but the Panthers are going to
be there making sure that they put the pitch forward to the State General Assembly leadership.
Mr. Barnes said but you just said you shared my concern. If in fact that happens Mr. Kimble
what would be your recommendation to this Council and Mayor?
Mr. Kimble said then you would have to determine if you want to move forward on a smaller
package that just includes the Panthers and the City. That is an option and we’ve talked about
that among ourselves, but we don’t want to go any further with that because we want the State to
participate because they are the bigger public winner than the City or the County. So they
rightfully should be paying into this equation , as well. We do not want the State to be taken off
the table. We want them at the table and we’d like for them to give us the authorization for the
food and beverage and we’d like for them to participate with cash at $62.5 million. The Panthers
believe that, too.
Ms. Mayfield said since we have unfortunately a history of closed session meetings and other
meetings miraculously making their way to the media, we have these talking points here but is
there anything that is actually in place to insure that we stick to the talking points. It defeats the
purpose if we go through all this process because we already look so completely dysfunctional
that it is ridiculous. I was just wondering, having those talking points are great, but is anything
to put in place to actually insure that we have some level of respect to the process and keeping
the conversation in the room to just give time to go do whatever they are going to do up in
Raleigh?
Mr. Hagemann said only commitment and trust amongst yourselves.
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Mr. Kimble said we were asked by several of you to have some talking points as you leave
tonight and Kim and Bob and I worked on those and we are ready to give those to you when you
are ready. We also have the University of South Carolina report that the Panthers left for each of
you to have copy.
Mr. Dulin said I wanted to touch base on this smaller number. They made up the $125 million
for us. What is to say we don’t offer them $80 million or $90 million?
Mr. Kimble said we’ve already gone there.
Mr. Dulin said my kid asked me for $20, I usually give him $10. They might not necessarily
work, but we can tell them what the deal is. While I have the floor, we had our very good
meeting this morning with our Raleigh Delegation. What is the time schedule for you or
whoever to go Raleigh and start working on this?
Mr. Kimble said probably this week; the sooner the better. You need an answer and you need to
give them the chance to absorb the request. They are not going to give you an immediate answer
on the spot when you walk into the offices so it is matter of suiting it up this week.
Mr. Dulin said who is going?
Mr. Kimble said we haven’t gotten to that yet, but I assume that I’m going, members of the
Panthers are going, don’t know if it will be Bob or Greg, but I think somebody else should go. I
don’t know if anybody else should go. We are trying to put that together, awaiting the outcome
tonight. We didn’t want to prejudge tonight.
Mr. Cooksey said I appreciate the clarifications that were offered and it made me realize that I
hadn’t risk, how long did you say we were waiting on this? I’m torn on this. My part about the
frustration about what we are getting for this comes from having to come up with several other
ideas that in other conversations have all been told, oh, forget that. I wondered could we perhaps
through the private/non-profit we’ve got, the one Charlotte or something like that, could we even
change for our contribution get an equity stake in the Team. The Carolina Panthers have not
maxed out on their ownership structure based on NFL rules, so there is room for more owners. I
asked about that but so NFL rules prohibit that. I was hopeful that perhaps the hospitality
industry in general and the restaurant industry in particular would be part of this request for a
greater sense of beginning, but no, the timing just doesn’t work out for that. I was hopeful that
we could talk about a more regional approach to a food and beverage tax rather than just the City
of Charlotte and again the answer I got back was that we don’t have time for that; that will
require a lot of work so it is just going to be concentrated in Charlotte. That is the nature of my
frustration about this, is I have tied to come up with other things to get for the people of
Charlotte being asked to pay 9.25% on prepared food and beverages if we make that choice and I
don’t get anything out of this. We have a history of helping businesses get started and
particularly sports. The Uptown arena helped get the Bobcats, the original arena helped get the
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Hornets started, not the original, but the one on Tyvola helped get the Hornets started. We are
kind of helping the Knights get a fresh start with something new and bringing them into the City.
As far as I’m concerned public investment in the Panthers was $60 million at the start and that is
what we’ve done and we’ve gotten a good return out of it and we should be happy about that.
This feels awkward to talk about this one particular business that yes, does have a great impact,
but there are a lot of people running restaurants out there that have a good impact on this city too.
There are a lot of businesses employing a lot of people that have a good impact on this city too
and they are not coming to us, and to Ms. Fallon’s point about they are good for us they haven’t
ask for much, they pay a lot of taxes, why not give it to them. Well, how do you not say that to
Harper’s Restaurant Group, so that is the message here, that big matters. If you make a big
impact we will tax everybody to keep you here, but we are going to judge that and that is a good
part of my frustration on this. I’ve tried to come up with other things that we get for this
participation and at each turn I’ve been told no, you can’t do that, can’t do that.
Mr. Kimble said I will say this that the hospitality industry leaders have said to me in the past,
not yesterday or today, but in the recent past, if you are going to do something for the Panthers
with hospitality and tourism taxes, please help us with amateur sports at the same time. It is not
that we haven’t heard it and we’ve not gone and asked them, they are coming to us and saying if
you have any hope of getting a new hospitality tax and gaining our support, you will need to do
more than just the Panthers.
Mr. Cooksey said that is good to know. It is just when I asked the Panthers have you reached out
to get the restaurants in the area on your side, they said no, we haven’t done that yet.
Mr. Kimble said we told the Panthers not to go there because we first needed to come to you.
Mayor Foxx said I think everyone has had a chance to say what they want to say and I would like
to take a second to say some things that I want to say about this since we have a motion to move
forward. What is really hard about being a member of this Council is that the only way this
Council speaks is by a vote and by collective action. Everything else is a constellation of
individuals having opinions, but until this Council actually votes, there is no action for anyone to
take. Now what is being suggested here is a step to go to the General Assembly and to let the
General Assembly kick around the idea of making this financing framework happen. I would
suggest that rather than committing ourselves to other aspects of this deal, because there is a lot
of little lanyard up in there so to speak, things like the tethering, and I would suggest that we
continue having that dialogue with them and frankly, if the Council has a deal that the Council
wants to see happen, in terms of actual terms, then we can’t do this. Mr. Mitchell can’t go and
give his idea and Ms. Fallon give her idea and Ms. Pickering give her idea. This group has to
speak as a whole in order for the staff to be empowered to go back and say this is the Council’s
position on the tether. This is the Council’s position on the parking. This is the Council’s
position on this and I don’t feel that, based on the conversation we are having today, we’re going
to be very well positioned to lay out a counter position to any of those particular terms. Even if
we go forward with this piece on the top line numbers so to speak, we need to figure out a way to
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have another conversation about the other terms of the deal and to try to figure out how to get to
a better place with those.
The second thing is the CIP doesn’t have anything to do with this, but I will say to you, based on
my experience, and I think Mr. Barnes said this and others have as well, we are going to go out
into the community and we are going to say we did baseball, we move forward on the Stadium
but we can’t quite decide how to do Police Stations, we can’t quite decide how to build roads, we
can’t quite decide how to do some of these other things and quite frankly folks I think that this
deal, in order for it to be received the right way by the community, we’ve got to figure out this
capital budget issue. It is not to say that these things are tied together sequentially or anything
else, but I do think this puts more , it heightens the ratchets up, the urgency of figuring that out
because if you can do baseball, you can do football, you better be able to do Police Stations,
roads and other things. I think we need to really bear down on that in order to do right by this
community.
The third thing that occurs to me is why it is so easy for us to do these types of things and it is
hard for us to do the other stuff. The reason is because there is a whole industry pushing for
tourism stuff, there is dedicated revenues; there’s all kinds of stuff. And I think one of the things
that Mr. Barnes and others have said this before, if we can be creative on this, for God’s sake be
creative on the other stuff too. I am getting cranky and cantankerous in my old age. I’m the
youngest one of you here, but momentum where momentum exists is a much different issue than
were momentum where momentum does not exists. It is harder for us to figure out East
Independence, it is harder for us to figure out Tryon Street, Beatties Ford Road and other places
but folks if we don’t figure it out, we are building a living room with no bedrooms. The
bedrooms are going to be out in the hinterlands and I just don’t think that is right for this
community. So I’m saying to you that I think part of the reason why this conversation is flowing
a little easier than some of the others we’ve had, is because the City has set up an infrastructure
for business and visitor ship, we need to set up an infrastructure for living room.
The last one and I’ll stop. I do think this is an important decision for us and I think we’ve had
more than our share of important decisions. But my sense is that Mr. Richardson is true to his
word. He is not going to sell the team but he will not be here forever and there are not a lot of
things that I would equate this way, but I will say, if pressed to say, what I think losing this team
would mean to this City, from a psychology perspective, leaving aside there will be another Cam
Newton ten years down the road, there will be other stuff that will come and go, but
psychologically, I think it comes pretty close to losing Bank of America. One can agree or
disagree with that, but that is just real. Bottom line, I think we can move forward with getting
the top line structure moving. I think we can take a little more time to settle on a Council position
on other aspects of this deal, speak with one voice, hopefully, and give the staff the opportunity
to go back and have further conversation with the Panthers. I think we can continue working on
the other aspects of our work that we have yet to do, but we need to finish it. We also need to
understand the risks of action and the risks of inaction. I think we’ve had fairly good
conversation on those topics.
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Mr. Howard said on tethering, I would like to just throw this out to the body because that is my
number one issue for sure. I think on the principle along the line of we will not tether longer
than we finance. What we can’t do is have a team not here and we are still paying for it. I
wonder if that is just a principle that we can just agree on about tethering or do we need to keep
talking about it.
Mayor Foxx said a couple of things. In reality there are others that will be courted at some point
once this thing is wrapped up so, I’ll take the lead for it. In reality, as much of a big deal this is,
it is a lot of money that is going into a huge stadium that we don’t want to be sitting up here like
some of our other facilities that have aged and not been kept up well, but in reality this Stadium
is eventually going to be replaced. I’m not talking like 20 years; it is probably like 12 or so. It is
not going to be that long. The tethering over a period of whether it is 10 or 15 years, the longer
we can get great, but we still going to have an issue with trying to keep this team here at some
point in the not too distant future. I kind of hate that what is precipitating this conversation is
succession issues as opposed to sort of a wanting to transfer a business from one person to the
next but that is kind of the reality. From the Panthers’ perspective I think the lesser the tether
they have the more it frees them up to have options later. From our perspective the tethering is
really the only reason we are talking about this because we are basically trying to keep the team
in Charlotte.
Mr. Howard said what I can’t see if for some reason we lost the team in the future, we would still
pay. That is the principle that I’m just having...
Mayor Foxx said I don’t mind if that is what you guys want to say, at least provisionally, but I do
think we need to come back to other aspects of this deal because I think you need to really digest
what is being asked for and we need to have a position as to whether we agree or disagree with
those things. I think what is most immediate right now is the General Assembly needs to have
an idea of what the structure is. We can let that structure move forward at least in conversation
while we are still dealing with these other aspects.
Mr. Howard said staff did you actually look at deals that other cities have put together?
Mr. Kimble said we have and it is directly tied to the money side and the length of the tether.
There is some rationale for that.
Mr. Howard said not only in participation in renovations is what I’m talking about. Are we in the
same ballpark?
Mr. Kimble said this is more moderate, this is not as robust as what some other stadiums have
done and the dollars drive that and show that. Those dollars in 2003 were 2003 dollars for the
Bears. That $500 + million in today’s dollars that would be like $800 million or $900 million, so
this is on the light side of renovations.
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Charlotte City Council
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Mayor Foxx said this is the lightest one. There is actually a sports and tourism group of Mayors
and they talk about these things all the time. This is actually the lowest one I’ve heard of in the
last 10 years.
Mr. Howard said it is relative to this conversation, if we could see that in some table.
Mr. Kimble said I’ve got a table on all 31 teams when they were last built or renovated.
Mr. Barnes said I think you make some very salient and interesting points about our situation. It
strikes me as odd that we always talk about the value of keeping Bank of America or bringing
the Knights here or keeping the Panthers and we almost react from a position of paranoia despite
the fact that we are constantly told about how people are moving to Charlotte and the growth of
Charlotte in the next 20 years. This is a happening place, this is where the TV market is growing
and where fan base is growing, yet every time something like this comes up it is, “Oh My God,”
the sky is falling if you don’t do this the world is going to end. I just don’t react that was to
things. David and I had a good conversation and I think you understand that I can’t react that
way, but I do want to hear clarification on the motion.
Mr. Mitchell said that the City Council Point Bullet #1.
Mr. Barnes said does that include us saying that we are okay with the 1 cent or just simply saying
you guys go to Raleigh and talk to them about retaining and talk to them about the $62.5
million?
Mr. Kimble said I would say that the direction of that motion says to us, to go Raleigh, talk to the
State General Assembly Leadership about a 1% Charlotte only food and beverage tax and the
State participating at $62.5 million.
Mr. Barnes said without all the other bonuses attached, for the moment.
Mr. Kimble said they are probably going to ask us questions, but I would say the City Council
hasn’t settled on all these deal points yet, but they are focused on the most important one right
now, is the State wanting to play ball with us as we try and keep the Panthers in Charlotte and
North Carolina.
Mr. Cannon said why couldn’t I vote for that? I’m just asking because it is a more direct vote
that has to occur bottom line. I’m just wondering is it playing it safer just to not do that at this
junction.
Mr. Hagemann said all the conversation was that you wanted to be safe and we would figure it
out. There is no regret by sitting this out.
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Mayor Foxx said I think what you are asking is there is no direct agreement or binding contract
that relates to the business of going to the General Assembly and asking for capacity, so I think
that is what the nature of your question is.
Mr. Cooksey said I think it is worth picking up a point. Ron, I think I heard you say, that the
State benefits more from the Panthers than the City does.
Mr. Kimble said I think because of the income tax.
Mr. Cooksey said and that is one of those levels of frustration I forgot to go through my laundry
list earlier, in that the structure is 25% Panthers, 25% State and 50% City when it is the State that
is gaining the greater advantage. Why not 25% Panthers, 25% City and 50% State? I understand
the response is that the State is not going to go that high, but it just adds to my frustration about
attempting to come up with negotiation points that always get shot down.
Mr. Kimble said the way I would answer that that is a good observation, that in a Dillon’s Rule
State they will say that it takes them authorizing you to levy the tax so they should get credit for
that $125 million, too. And they may be in a tougher spot to have to dip into the State’s general
fund to find that $62.5 million, where if they agree to this, they are empowering you to do that
through a user fee known as the food and beverage tax. There is rationale, but it is squishy.
Mayor Foxx let me make sure that the motion preserves our ability to weigh in on other deal
terms at a later point.
Mr. Kimble said that is what I heard from the motion.
Mayor Foxx said and it is direction to the staff to reconvene us at an opportune time to go
through those new points and to weigh in. I think that is the request. Is that okay?
The vote was taken on the motion and was recorded as follows:
YEAS: Councilmembers Autry, Dulin, Fallon, Howard, Mayfield, Mitchell and Pickering
NAYS: Councilmembers Barnes and Cooksey.
Mayor Foxx said one person who goes out and starts going through the details of this meeting
opens up everybody else to refer questions about it. I want to ask you all to take special care to
be respectful of the confidentially of this. It is not that we are trying to hide information from the
public.
Mr. Cooksey said to that point all of you have heard me, you saw how I voted, but I will tell you
this. If you see me quoted in the paper at all on this topic, the only quote you will see is I am not
going to discuss what was discussed in the closed session.
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Charlotte City Council
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The meeting was adjourned at 10:50 p.m.
Stephanie C. Kelly, MMC NCCMC
City Clerk
Length of Meeting: 2 hours, 40 minutes
Minutes Completed: February 15, 2013
Public Inspection Status
(A)
Must Remain Confidential
(B)
Confidential Pending Release
(C)
Release for Public Inspection
Release Authorized by:
City Attorney/City Council
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Date