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Motion was made by Councilmember Dulin, 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 Friday,
February 8, 2013, at 11:15 a.m. at the Whitehead Manor Conference Center, 5901 Sardis Road,
Charlotte, NC, 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 City staff, City Attorney Bob Hagemann, Interim City Manager, Julie Burch,
Deputy City manager Ron Kimble and Assistant City Managers Eric Campbell and Ruffin Hall.
Motion was made by Councilmember Dulin, seconded by Councilmember Mayfield, to recuse
Councilmember Cannon from participating in this particular matter.
Mayor Foxx said I would like to know the purpose.
Councilmember Dulin said as far as I know Mayor there is a business relationship that he’s got
an economic involvement in.
Mayor Foxx said I would like to know the nature of it.
Mr. Dulin said parking.
Mayor Foxx said where.
Mr. Dulin said in Charlotte, near or around the Stadium. I’m sorry, I’ve already given you more
information than I know.
City Attorney Bob Hagemann said let me share what I know. Councilmember Cannon spoke
to me that his company, in which he has 50% ownership interest has a direct contract with the
Panthers related to parking.
Councilmember Autry said as I understand it through our ethics training that a conflict of
interest would indicate a direct opportunity to profit from action taken by the Council. Is that
your determination that it meets that threshold?
Mr. Hagemann said there are two basic rules that I used to analyze this particular situation. The
State Statute that says that Councilmembers shall vote, except matters involving their own
financial interest or official conduct and then you have your ethics policy that provides more of
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an aspirational goal of appearances of impropriety. It is not always a bright line for where there
is an absolute positively legally disqualifying conflict. As with any of you, I have discussed it
with Councilmember Cannon and he has concluded that based on his financial arrangement that
he believes that he does have a conflict. I don’t disagree with that and practice has been that
when a Councilmember has a business relationship with an entity before the Council there is
plenty of precedent for recusal.
The vote was taken on the motion to recuse Councilmember Cannon and was recorded as
unanimous.
Mr. Hagemann said you have microphones on your table, this is being recorded just like your
previous Closed Sessions on the Panthers were recorded. We expect that when this becomes
public, one way or the other, there will be requests for transcripts or copies of the recording. As
always I remind you of that.
Councilmember Howard said what constitute that point in time the vote in here today or the
vote at Council, which one triggers the release of the minutes?
Mr. Hagemann said the law speaks to a public announcement of an agreement and not to get
ahead of ourselves, but you may wind up in a place today where you have given tentative
indication but you will not have proof of final agreement or announcement of final agreement.
There are steps that have to take place down the road before you get there.
Mr. Howard said I’m not sure I’m against us moving forward as much as when the minutes are
made public. That is what I’m really talking about.
Mr. Hagemann said what I will tell you is I will expect that if there is some kind of
announcement after this closed session there will be pressure to release it. I don’t want to make
that hard call right now.
Mr. Howard said what I’m concerned about is the conversations taking on the life of their own
outside of what we speak about as a body. What they will do is say Dulin said so and so,
Mayfield said so and so as opposed to what we voted on as a body which is what you get a
majority on. That is what I’m concerned about.
Councilmember Kinsey said I’m assuming we have guests and to what extent will everything
be disclosed to Council today based on some of what I had a discussion with you about
yesterday. Is everything now out in the open, well within this room? It is not going out in the
open.
Deputy City Manager Ron Kimble said yes, that is correct and any question you want to ask
the team you are free to ask the team. The same process, we are going to bring them in, we are
going to report back to you on the assignment you gave to us, have a dialogue with the Panthers
and then dismiss the Panthers so you can have a meaningful dialogue amongst yourselves.
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Councilmember Barnes said I have an extreme concern about the fact that so much of almost
all of this has taken place in Closed Session. There has not been any public dialogue and we
should have had an opportunity to have these folks speak to us in that Chamber. People don’t
know what we are doing and they think we are being run by the Panthers, they are not
comfortable, in my opinion. Most of them are not comfortable with the fact that we keep making
these decisions behind closed doors. We are not having any public dialogue or debate about it
and that really bothers me. It reminds me a lot of the Hall of Fame deal which has gone down
the toilet. I don’t like this at all so if I leave, don’t be shocked.
Mr. Kimble said one of the things that Mr. Hagemann and I will share with you today is if you
get to a point today where you are comfortable voting on something and we hope that you will
vote on something today. It is very important and we will explain that, that we have a
mechanism for having the business terms that you would consider today to be able to go public
immediately after your meeting. It is not behind the scenes and we are going earlier than we
ever have before.
Mr. Barnes said there are reasons that we talked about regarding why they need a decision at a
particular time and all of the time of the essence issues. The public should know that and they
don’t. So what we are going to do is take a vote on something and then come out and say here is
what we we did, and here is why we had to do it because of X, Y, Z. That is bullshit. People
should have an idea of why we are doing what we are doing and know what we are doing. And
this closed door stuff is crazy. If you want that kind of money from us you should step up in
public and say here is what I need and here is why I need it, instead of asking me to sit in this
room with all these guys who I respect and appreciate, but I just don’t like the way we are doing
it. The whole CIP thing, that has been the most uncomfortable experience in my political life and
that was all in public. Look at what we went through yesterday, publically looking like a bunch
of clowns. So we sit through this experience today, we did it at the Government Center in CH14 and we are doing it again today. They need to step out in public with us and explain what
their problems are, why they have them and what they need us to do about it. You can see kind
of where I am.
Mr. Howard said I totally disagree with you.
Mr. Barnes said you frequently do.
Mr. Howard said all I want to do is be heard. You just dismissed me and that is not right. So if
you need a breath before I talk, I’ll wait a minute.
Mr. Barnes said I’m fine.
Mr. Howard said the way we approach economic development projects have always been the
exact same thing. With Chiquita we did all that and then went out front and voted on it because
negotiations needed to happen behind the scenes. If you approach this as an economic
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development project, since I’ve been on this Council, there has not been one economic
development project, Chiquita, Siemens or any of the rest of them that we did. We did that
behind closed doors. When they agreed to the other side of the terms, we voted out in the public.
Whether you agree with that way or not, this idea that we are doing something that is
underhanded and wrong is what I’m disagreeing with you on because if you are approaching it as
economic development that is exactly the way this is normally done.
Mr. Barnes said I said behind closed doors, I didn’t say underhanded or wrong.
Mr. Howard said even behind closed doors, that is the way those are done; because you don’t
negotiate in public. That is not the way you negotiate best.
Mr. Barnes said actually that is not true. We were trying to get Siemens to expand here and we
were trying to get Chiquita to come here. Here we are dealing with an entity that is already here.
Mr. Howard said Siemens were already here you just said that.
Mr. Barnes said yes, but they were expanding.
Mr. Howard said the Panthers are doing the same thing.
Mr. Barnes said no they are not.
Councilmember Mitchell said I do think we need to get creative. As Michael expressed the
same sentiments that my other colleagues are expressing and I’m not trying to put words in
Michael’s mouth but I think the big cloud over there is the frustration citizens have that we are
doing this in light of not passing the CIP. We need to give all of us some coverage that to
Michael’s point, we are not trying to hide, we are not doing any secret deals. I’m sensitive to the
fact that we talking about personal information but staff and Council we need to get to a point
that there is a public report out from this Council. Put it under ED under a dinner briefing, but
the public needs to hear, not in the newspaper, but at one of our meetings, here is the timeline,
here is what we are working with. If we can do that without exposing it and I think it would be
very helpful because Ron, you and I talked about there needs to be a tremendous PR campaign
because the reality of it is, as much as we would like to keep these projects separate, in the public
eyes ,they are not. We are spending money and we are spending money now when we didn’t
spend money to do what the citizens will say, basic needs. I know Michael is a no vote, but to
me it is not how we vote, but it’s about the Council protecting all of us because regardless when
we come out here and the newspaper goes out, Monday is going to be a whole new world for us.
City Manager, I’m just saying this and I’ve shared this with Ron, we need a true PR campaign,
more public, more importantly, a public report out of what we’ve done because Mr. Barnes is
right. I make no bones about it and everybody knows how I’m going to vote, I support it, but
I’m sensitive on what the citizens are saying out there and it is ruining our credibility. You’ve
got some that want to support it and saying you are doing the right things, but they say James just
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tell us the timeline, tell us the schedule. I’ve been mum because I knew we had some other
steps.
Councilmember Kinsey said David I feel your passion around this, but I don’t see it as a normal
economic development. To be honest with you, I think that if Jerry Richardson had come to us
on camera the public would have been just as charmed with him as we would have been. I think
that really probably should have taken place, to be honest with you. I know he doesn’t like that;
he doesn’t like the media and I understand that, but what he talked about in the last closed
session, he was funny and a charming person. I think most people, if they think about it, realize
that he is a real class act. There really was no reason for us to do this like this. It is just not our
normal economic development, it just isn’t. We are going to take some lumps on this one.
Councilmember Pickering said what are our options at this point?
Mr. Kimble said we are going to get into that.
Ms. Pickering said I mean as far as whether have this in a closed session right now or not.
Mayor Foxx said closed session or not closed session I think is what they are asking.
Ms. Pickering said that is what I’m asking.
Mr. Hagemann said you can go open but I don’t think there is anybody around that would come
in to hear it.
Ms. Mayfield said if we send out a Tweet, they’ll be here. Not to be funny, but it would be a
matter of minutes before there would be several people to come hear this conversation.
Mr. Mitchell said Ms. Pickering, if you are okay and Council is okay, since we are here in closed
session, let’s talk about how do we make this information public in a City Council setting
ASAP?
Mayor Foxx said let me throw out a couple things. I think people have made valid points and I
appreciate where Michael and others are coming from. We could conceivably go with a couple
of options. We could either do what we are doing which is continue in closed session, we could
do it in open session, have the conversation or we could make a decision for hearing information
in closed session and come right out of the closed session once we’ve decided and just have a
media availability and just say what we did.
Mr. Howard said you are trying to remember that we are being recorded. I’m going to say this as
gingerly as I can. There are other people other than the public looking at how we handle this too.
They are making decisions about other assets of ours based on the fact that we just cannot seem
to move anything forward. I’m not asking us to do it for that reason but just know that there are
things coming down the pike at us and the word is out that we have more on our plate than we
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know how to say grace over. At some point how do we move this forward? All I wanted us to
do was move it forward in a way that is respectful of all these different balls we have up in the
air. We tend lately to keep this one thing stands on its own, this one thing stands on its own, but
what I’ve heard more than one time now is that is all kind of looks like a mess. You are right,
we didn’t help that yesterday. A lot of this has to do with what we want to be known for and
moving something off our plates so we can move on to some of this other stuff.
Mr. Mitchell said I think that is a good questions, but I think Mayor you are right do we just go
into closed session and maybe invite them. Is the media still here? Here is where I have a little
problem, if we hear the information and then invite the media in, we are not prepared. I want to
make sure we have time to be prepared and I prefer, and I hear you say our next meeting is
February 18th, but maybe at 4:00, we have an update.
Mayor Foxx said once we are able to have some conversation about this and think you will get
what the timing issues which are very serious issues. I’m waiting to find out whether there is a
general comfort level with where we are or whether you guys want to go into open session,
whichever way you go.
Councilmember Dulin said I’d like to proceed Mayor. This is about as full a plate of porridge as
I’ve ever had to look at cold, but I would like to proceed.
Councilmember Fallon said Ron, what are you going to actually say to us that we couldn’t hear,
that we open the door and say come in? Is it anything that has to be that private?
Mr. Kimble said what we intend to do today is go through it. Initially with the Panthers in the
first part of the meeting like we did last time and then they are dismissed and you have every
opportunity then to go through the business terms one more time and if you are comfortable with
where you are at the end of that conversation, Mr. Hagemann and I have worked hard with Kim
McMillian and we are ready to share with you a possibility and a process for rolling out what
you are voting on.
Ms. Fallon said why does that have to be in private? Why couldn’t that be in the public, it is
going to be in the public after we vote anyway?
Mr. Hagemann said if open up to the public that means that the Panthers could be here too. We
think it is important for you, after hearing from them, to be able to talk about it and ask us
questions outside of their presence. It goes to negotiations and what we want to share with you
about our perception about what is going on with them, then I think we would prefer to do it
outside of their presence
Mr. Barnes said I think that is fair, let’s rock and roll.
Ms. Fallon said are you comfortable? We have taken it so far, it is just going to be a little bit
more of the same.
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Mayor Foxx said I’m going to throw another idea out. Another idea is that we hear the
presentation; previously we’ve indicated intent to stay in closed session. If we indicate the
intent, go into open session and do a truncated version of the presentation and then vote.
Several Councilmembers said I like that idea.
Mr. Kimble said that would work as long as you’ve got the first vote in closed session.
Ms. Pickering said are the Panthers willing to do this in open session?
Mr. Kimble said I think might be a question and an issue, we haven’t asked them that question.
Councilmember Cooksey said I’m prepared to go forward as originally projected that we have
the presentation in closed session, the Council continues talking in closed session and that we
conclude the economic development activity with a tentative indication of intent that would
guide future activity on this. My concern with the notion of doing that and then going into open
session, having he media come in and we do a vote in public is that it does not provide the public
the opportunity to sign up to speak on an agenda item that Council is voting on. Until I know
what that vote would be in public, I don’t know whether it is the type of vote that is purely a
procedural matter or whether there will be another final vote by Council that the public could
speak on or if that vote is the determinant one and we will thus by coming into open session here
today, deprive the public of a chance to sign up to get their two-cents on the agenda item.
Mayor Foxx said my sense is that we’re not being asked today to sign an agreement, so there
would be future steps.
Ms. Mayfield said Ron, we had the conversation this morning so it will be helpful if you will
repeat what we discussed this morning where basically I asked the same question. Basically
when do we get in front of the public for them to have a hearing, for them to have their say,
because ultimately I think it is our responsibility to get out and talk to the community. If we are
doing our job well we should be able to go out to our districts and have our conversations from
both sides and be able to clearly say this is why I landed where I landed, but we really want to
make sure that your voice is heard. My understanding today, what we are doing is moving
forward, but this isn’t that final because I specifically said if the community says
overwhelmingly they do not want this, what are our options?
Mr. Kimble said the process for today, if you give a tentative vote; it is not your final vote, in
closed session to move forward, we are going to propose that we go public with the business
terms that you would be voting on. This then has to go to another partner, the State of North
Carolina. I do believe that there are other things that are in this and the request for the $62.5
million from the State of North Carolina has been made and the request for them to consider
introducing the legislation of a 1% food and beverage tax has been presented to the leadership in
both House and Senate and to the Governor. What they would have to do then, a local bill by
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our Mecklenburg County Delegation, we have to get them involved, have that bill go through the
Legislature to approve the authorization to levy a one-cent food and beverage tax in Charlotte. If
they approve that legislation and they come forward with the funds that we and the Panthers have
requested, then there will be likely a public hearing on that tax held here in Charlotte at a City
Council Chambers meeting where the public has every opportunity to come and talk about the
tax and talk about the agreement because the agreement at that time would be fully developed
and the public will have a chance to be weighing in after today when we announce the business
terms if that is where you go, but they will also have a formal opportunity, and any other formal
opportunities that you may wish to grant the public to have that view and that public input.
Ms. Pickering said how soon will be releasing the business terms?
Mr. Kimble said it is up to you, but we are going to suggest that you do it after today. If you
consider what we are suggesting today, you are going to start getting the calls tonight or this
afternoon because it is going to be that fast because the business terms would be out there.
Ms. Kinsey said Ron, I can’t tell you how many times I’ve heard this spiel. You will have one
more chance. The fact is, friends, when we vote today it’s a done deal, based on the timeline that
I’ve been told. Even though we say the public can come and speak to that increase in tax, it’s
done. It’s done and that is okay, if that is what we want that’s okay, but I think you need to
understand that and this is what we always do to these requests, and by the way we are going to
get some more requests coming down the pike, I can tell you that right now. It’s done, so
tricking ourselves into believing that if the public comes overwhelming and say we don’t want
the tax, we don’t want to do it, if it goes down like I think it is going to go down today, that we
are going to rescind that. We aren’t going to do it, friends. There is a time element there and
once we say yes today, which I think there is probably the votes to do that, it is done.
Mr. Barnes said a process question. What the majority of the Council voted to approve a few
weeks ago was you and Bob going to Raleigh to ask them for permission to proceed and consider
the 1% tax and to consider that $62.5 million. You just said that the proposal had been
presented to the leadership of the House and the Senate. It hasn’t been presented to the entire
General Assembly and they haven’t voted on it. If they decide not to allow us to implement the
tax and we vote today to try and move ahead we have another sphincter problem. We look bad
because we’d be saying oh yeah we are going to do this thing and they will say sorry, and then
we’ve got the whole Raleigh saying …(Inaudible). Even though that is not what we are trying to
set up, so what I’m questioning is whether or not we should have gotten the check-off up there
first and the approval from up there first before we do anything. It is almost like somebody
buying a house and I will take it out of an 8,000 square foot house in Eastover for $5 million and
I haven’t even qualified for a mortgage yet. That is what we are doing, which in my opinion
seems a little strange.
Mr. Kimble said I would contend if that were to happen, since we have talked to the leadership
of the House and Senate and to the Governor, specifically, we would like to give you that
feedback that we received from them and if they choose not to move forward on 1% food and
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beverage tax when you have requests that as a business term and they do that, then they are the
ones that killed the Panthers from moving forward in this community. Also you can’t expect
them to go in this short amount of time, and we’re going to explain why it is a short amount of
time, to have gone to every person in the General Assembly and gotten an unequivocal vote. If
we had time we could do that.
Mr. Barnes said can you appreciate that that is not my problem and also appreciate the fact that
some representative from Edenton that don’t care what happens here?
Mr. Kimble said I do understand that.
Mr. Barnes said what I’m saying there are Tea Party people up there and they don’t have any
more control over that crowd than we do over this crowd. I’m just throwing that out there as an
observation that it may not be as crystal clear as it seems.
Mr. Kimble said you are correct. Even if you vote on the business terms today that doesn’t mean
that this is absolutely going forward but it shifts to the State to be the next party to say yes to the
two things that you have asked them to do and the Panthers have asked them to do and if they
don’t, then they are the ones who are responsible for not allowing this.
Ms. Kinsey said we are pretty sure that they are going to say yes.
Mr. Kimble said that is the feedback we are going to give you. We are pretty sure and we can
never be totally sure, but we will give you the best information we got.
(11:52 a.m.- The Panthers Team of Jerry Richardson, Danny Morrison, Billy Moore and
Walter Price entered the room).
Mr. Kimble said thank you Mayor and Council for this opportunity today to come back and
report back to you on the assignment that you gave to the Panthers and City staff a couple weeks
ago. We are happy to bring this information to you. The format for today is to do very similarly
to what we did the last time we met. We will report back, invite the Panthers to be part of that
report back on what happened when we went and visited State leaders, and then we are going to
talk generally about a set of business terms that we covered last time in closed session. We’ve
refined those based on input that came from the Council, last time. We believe that we’ve made
some improvements from the City’s perspective to this agreement that you will find movement
by the Panthers, thank you Mr. Richardson, Danny, Billy and Walter for the conversations that
we’ve had. Then we will invite Mr. Richardson to come forward and make whatever comments
he would like to make, entertain any questions from any or all of you and then at that point in
time, when you are comfortable that all of your questions have been asked of the Panthers, to ask
them to leave again and then it would be just us having an opportunity to discuss the business
terms that we have put before you today. Does that sound like a good way to move forward,
similar to what we did last time? I will ask Bob and the Panthers to join in the response in the
report back to the Council and Mayor about our visits to the State officials. We went and
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specifically asked for their help in two ways. We asked them to consider the introduction of the
legislation, a local bill for City of Charlotte only on a 1% prepared food and beverage tax that the
State would have to authorize and then they would send that back to the City Council. City
Council would then have the opportunity to hold a public hearing, and we will tell you some
more things we talked about in terms of what that would be and then the Council would hold a
public hearing, the public would be invited to attend a City Council meeting in Charlotte, all
public invited to attend, make comments and at some point therefore adopt, if you are so
inclined, a 1% food and beverage tax. You already have a 1% food and beverage tax, it is
Mecklenburg County wide, this would be City of Charlotte only, as we described last time. The
agreement that would also come forward at that time, if you are comfortable today in moving
forward to the next step.
Secondly, we presented to you last time that we wanted this to be a partnership with the City, the
State and the Panthers. We specifically asked when we met with these folks, and I will tell you
who the folks were that we met with, $62.5 million paid for by the State of North Carolina,
contributed to the partnership of the City and the Panthers. I will tell you that I was impressed
with the favorable reaction and reception that we received when we met with the Governor, the
Speaker of the House, the Senate President Pro Tem, Senator Tart who was called in because he
was walking by at the time, Secretary Decker, we had a great meeting with her three days ago,
already thinking about how she can put forth creative solutions to provide the $62.5 million, then
back here in Charlotte we met with Senator Malcolm Graham, who is Chair of the Delegation
and Representative Ruth Samuelson and Senator Bob Rucho. We met with all of those folks and
I would say we received a very open mind, a very warm reception, a very willingness to help be
a partner in the three party partnership, the City, State and Panthers. Great conversation, talked
about the legislation and what it might look like and how they might be able to move forward
with this legislation and with the asks of the $62.5 million. We as a group were favorably
impressed with the response that we got.
Ms. Kinsey said actually if we go forward I see a fourth partner and that would be the citizens of
Charlotte.
Mr. Kimble said I believe that they are through your representation, but yes the Citizens of
Charlotte are a party to the agreement because you would be a party to the agreement on their
behalf. I would also report that the local hospitality and tourism industry, we’ve had dialogue
with them and we had great traction and great support emanating from the local hospitality and
tourism industry. That is a great thing because what we heard the State folks we met with was
one of the most important things you need to be is together back home and the hospitality and
tourism industry at the local level in their mind on a local bill is key to the success and key to
them wanting to move forward with this legislation. I believe that we have received great
support from the hospitality and tourism industry locally.
There is a State group of hospitality and tourism folks that the North Carolina Restaurant and
Lodging Association, we have a local Chapter here, the State Chapter predominantly is going to
be opposed to almost any hospitality and tourism tax that you would bring forward because they
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have a position that across the State of North Carolina, they need to be convinced that each one
of these is something that won’t reverberate and set a precedent and then they are overwhelmed
with projects all over the State and it creates in their mind a reaction and a ripple effect
throughout all of the State of North Carolina. They will be a harder group to convince because
of their long standing stance on hospitality taxes in the State of North Carolina. We reported that
to the State Legislators and they said make sure your local hospitality and tourism industry folks
are on board with you, that is who we will predominantly going to look to. Didn’t say they
weren’t going to consider the position of the State group, but they are looking to the local
hospitality and tourism industry groups to be on board with us if we are to move forward. That
was key in their mind.
Mr. Kimble said I will entertain any questions but I would also like to have anybody else that
was in attendance at the meetings comment now. Billy did not make the first trip but was able to
make the second trip, but Mr. Richardson, Danny, Walter, Bob and I were on both days that we
visited Raleigh. The first day we met with the Governor and the Speaker of the House, Tillis and
this past Tuesday when we met with the other persons. There were four on Tuesday and then
Malcolm Graham and Ruth Samuelson back home.
We have met with the Panthers at your direction to refine the business terms so I think what
would be best would be to distribute the business terms and then cover them briefly with the
Panthers in the room so you will know their position on the business terms and then get into a
more lengthy conversation with the Council only about the business terms in here. We have
framed this to try and put it in as succinct of terms as possible so that we know the exact terms
that we are agreeing with. What would happen from this point forward is that these terms would
then be the basis for forming a larger agreement with the Panthers that will take weeks to write.
You’ve seen past agreements like this with the Bobcats, you’ve seen it with the NASCAR Hall
of Fame and you’ve seen it with other major projects of the City. We would take these business
terms and we would scribe the larger agreement with all of the conditions and provisions that go
along with that. We wanted to make sure that you know this is the business terms outline and
later it results in a much longer and deeper and more descriptive agreement between the parties.
We took your feedback, you asked a lot of questions, we want to answer all of your questions
again that were asked last time, but I think maybe the best way would be to go through the
business terms as they exist. I’m going to ask at the conclusion of going through all of them,
maybe not to have the dialogue now unless you want to with the Panthers present, but after we
go through these terms I would then ask Mr. Richardson and Danny if they want to come
forward, make any remarks and talk about these business terms. I will tell you that we have
spent a lot of time together in the last two or three weeks. This is a very intense, but open set of
negotiations on what we believe the needs are that you, as a Council, have described to us, but
we also have a greater understanding of what the needs of the Panthers are. I will tell you that
this is a package proposal. One of the biggest movements that the Panthers made in the last
couple of days was getting closer to where you all said you wanted them to be on terms of a 15
year hard tether of the Panthers to Charlotte. They considered that long and hard and that was a
very difficult movement for them to make and they did so with the codicil that we will do that,
but we what to make sure of is that the Council knows that we are making that as a very serious
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indication that we hear you loud and clear, we know what your needs are, we are trying to meet
that and it winds up with a 15-year financing that we are going to talk about on the $125 million
capital. It also has an injunctive relief provision in it that says the Panthers must play their
games for 15 years in Charlotte and they also, if a North Carolina Judge were ever in their
wildest dreams to rule otherwise, you’ve got a secondary backstop that is the cascading of the
$125 million debt schedule over the entire 15 years. They agreed to that as well, thank you
Panthers for doing that and thank you Mr. Richardson. Then there was a third provision that said
after the 15 years if there is a new owner who then decides that they can’t negotiate a deal with
Charlotte at that time, in year 16 through 20 the City has the option of purchasing the Stadium
valued as it were without an NFL Franchise. So you’ve got an extra 5 years on the backside to
protect against somebody in the future, a new owner potentially, not being able to strike a deal
with Charlotte and the team leaving. We then have an opportunity for the Stadium not to go in
decay because we have an option right to purchase it valued at a lower value.
The Panthers have agreed to all of this understanding that this is a package proposal and I want
to walk you through all of the other terms and conditions that we have had great conversations
about and great dialogue and I think we’ve come to a place where this is the best package that we
can possibly put in front of you that the Panthers have agreed to, City staff is willing to
recommend and we will then have an opportunity, after the Panthers leave for you to debate that,
discuss that and decide if you feel like you are ready to move forward. We can walk through the
terms, I think you are probably reading as I am talking and that is fine because it is not that many
business terms that really gets to the heart of the matter and really structure the agreement that
will need to be put in place with the Panthers.
Number 1 - The General Assembly would authorize and then the City Council would levy an
additional 1% Charlotte prepared food and beverage tax. The intent would be to make it
effective July 1, 2013 because then the tax is in place and it is creating a reserve for our debt
financing at the earliest possible moment, which is healthy for us. Having it implemented as
early as possible is the way to have the debt perform the best by building healthy reserves early
in the debt model. The Legislation would include a 30-year sunset. One of the conversations
that we had with the Legislators was we didn’t want a sunset but they were saying it needs a
sunset. We are putting forth based on the response we got from the State folks a 30-year sunset.
Even though this is a 15-year financing, we want the ability to be able to negotiate the next deal
after this and having the tax go away puts us in a hole and in a disadvantage of being able to
keep the Panthers here longer than 15 years when we do the next iteration. Remember the
Stadium is 17 years old now, 15 years from now it will be 32 years and that is very old as far as
an NFL Franchise is concerned for an NFL City. We would either have to a major, major
upgrade to the Stadium again or we would be in negotiations to build a new stadium. This
Stadium has great bones, it is a classic design and it has great opportunity to become the Fenway
Park or the Wrigley Field of the NFL and that is something that we need to keep in mind because
you can do a major renovation or you can build a new stadium, both options are open to us and
the Panthers long-term into the future.
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Number 2 - We split number 2 and number 3 because we want to make it clear that the State
needs to be a partner in this deal and we are saying this is the ask, $62.5 million. The Panthers
would make up the $187.5 million for the Stadium over 15 years funded $125 million by the
City, $62.5 million by the Panthers, the same amount that we talked to you about a couple of
weeks ago. The City’s contribution would be funded through a 15-year debt financing. Why
would we want to do just a 15-year debt financing, instead of a 20 or 25 with 30-year debt
financing? Because we want the terms of this deal to line up with the length of the deal which is
a tether for 15 years and we want the debt schedule to be a more powerful schedule and we want
to make sure that we are in a position to line up the debt schedule with the liquidated damages
that are in for the ….piece of paper. It is a way in order to make the deal dovetail with the years
and the length of the contracted tether.
Mr. Howard said when you actually add the 15-year piece of this along with the 30-year sunset
what happens to the term, does each term go up or does that not affect that at all?
Mr. Kimble said you are talking about when we issue the debt? On this particular deal we
wouldn’t issue probably all of the debt in the first year. They are going to make improvements
in a paced way. They can’t do it all at once; they’ve got to do in in a paced way. Our debt when
it is issued would be issued at the going interest rates. When you issue the debt in tranches is
what they call that. Each tranche would have separate pegged interest rate based upon when the
issue of that debt occurred.
Mr. Howard said I think what I heard you say is normally you want to do 20 or 25 years and you
probably get a better rate when you do that number one, and then you have a 30-year sunset that
means that you have now put a limit on that source. I was wondering if those two things change
the interest rate or any of the terms to the deal at all.
Mr. Kimble said a longer term may have a different interest rate, but in today’s market I’m not
sure which way it works. It used to work one way, but in the downed economy that Greg
Gaskins has come in and talked about exactly what interest rates we are getting at 20 and 25-year
debt and 30-year debt versus what interest rates we are getting at 15 and 20-year. It kind of
works like home mortgages, the shorter the term the better the interest rate. That is the kind of
thing we are talking about. But it is important that that is not the driver. What is the driver is
lining up the debt term with more powerful take downs of the debt with the 15-year...(Inaudible).
Mayor Foxx said just to clarify so we are crystal clear, the debt will be discharged by the 15-year
period?
Mr. Kimble said yes it will. The debt is $125 for capital, but as you will see we are also using 1%
tax to cover the $1 million maintenance that goes into the maintenance fund and we are using it
to cover the $250,000 of traffic control expenses up to, but after the Panthers leave I’m going to
show you another document which talks about how much we are really putting in overall, but
also how much the Panthers are putting in because it is more than $62.5 million that the
Panthers are putting in. They are putting in a million dollars in the maintenance fund and they
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are also giving us five free rent days per year in the Stadium and that has to be recognized as a
contribution. We will go through that at a later point in the closed session.
Ms. Mayfield said even though we haven’t gotten into it yet, when we look at what you just
mentioned that the Panthers are going to be putting in a million in the maintenance fund, it also
says we are going to be contributing a million to the maintenance fund, so does that really say
that ours in not $125 million, but it is $140 million if you add that $15 million that is going to the
maintenance fund or is it really a total of $140 million or is it the $125 million?
Mr. Kimble said it is $143.75 million because we are putting in the $125 million, the million
dollars for 15 years and up to $250,000 in traffic control costs for 15 years and if you add all
three of those up it is $143.75 million. That is the all in number, but the 1% tax will cover if
passed by the General Assembly, authorizing you and you levy the tax. The legislation would
include financing, acquisition, construction, maintenance, repair, operating; it would cover those
so it should pay for the maintenance and the traffic control costs that are in the structured
proposal with the Carolina Panthers. But I will also say that the Panthers’ then, contribution isn’t
$62.5 million and we will walk you through that and some other documents that we have to share
with you later today.
The State’s request that we made to them was $62.5 million. It is reflected here. When we
talked with State officials it is fair to say that they did not say we are going to give you a check
for $62.5 million, but what we said was it would be very important that if you cannot give us an
appropriation because they are dealing with a very difficult budget situation, can you give us a
revenue stream that is equivalent to $62.5 million and we said that would work as long as we
could structure in a way that is good for the partnership and we could find a way for it to work.
That is why it says the “Panthers and City request the State of North Carolina invest $62.5
million into this partnership or provide an equivalent revenue stream which the state deems
appropriate” because we need to give them an opportunity to help solve this equation in a way
that is creative and I believe from what we heard they are trying to be very creative in how they
join the partnership with the Carolina Panthers. They believe in the Panthers as an economic
engine, an asset, a civic leader and a civic contributor to North Carolina. We heard that time and
time again from the State Legislators that we met with.
Mr. Howard said when you say funding source, that’s another tax?
Mr. Kimble said they have to figure out from their budget or from their programs and policies
how they will flow $62.5 million to this deal.
Mr. Howard said but if we said we will give you a penny and a half, and it is another source, I’m
not sure I understand what you mean by that.
Mr. Kimble said we’ve asked them for $62.5 million. They can’t tell us today, yes, we are going
to give you $62.5 million. It is a request and we also put in here the City acknowledges that the
receipt of these state funds is an essential element of the partnership with the Panthers. We can’t
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make them vote ahead of the time they are ready to vote but this is the best we can do with the
State of North Carolina.
Mr. Hagemann said they’re not suggesting that they give us additional authority were we fill that
$62.5 million. What Ron is talking about is they might not be able to accommodate in this
budget a lump sum of $62.5 million so they are looking at other creative ways to flow the
equivalent in maybe over a period of time.
Mr. Kimble said I understand your question was, it doesn’t come out of the 1% food and
beverage tax.
Mr. Howard said or they don’t give us more capacity.
Mr. Kimble said that is an excellent clarification that we will make sure we cover it more
specifically in the future.
Ms. Fallon said it won’t be something I hope that affects Charlotte with more taxes.
Mr. Kimble said that is not the form of the request that we made in front of all the Legislators
that this is from the coffers of the State of North Carolina that they need to pay $62.5 million to
this project. I want to say this again, the Secretary of Commerce was already thinking about
ways in which she could recommend or choose to solve this equation. Some things might be
under her control and some other things might not be under her control so she has to work with
the Legislature and also figuring out what those creative mechanisms are. We were warmly
received because they recognized the value of the Panthers in the State of North Carolina.
Mr. Autry said I have a question on number one, “exempts expenditure of public funds on the
Stadium from bid statutes.” I’m not an attorney, what does that mean?
Mr. Hagemann said here is what that means. Right now except for certain exceptions which
wouldn’t apply here, any public money that is spent has to go through the formal bid process.
This is consistent with what we did with Cultural Arts Facilities. We turned our money over to,
in that case, Wachovia and then Wells and they constructed and managed the projects the way
the private sector would do it without being subjected to the bid statutes and process that we are
subjected to. Since the Panthers will be managing the improvements and letting the contracts,
the idea is to let them use our money and contract the way the private sector would, like Wells
and Wachovia did, as opposed to subjecting them to the public bid statutes which they never had
to deal with in their world. The exception that let us do it with Wells is only our money is less
than 50%. Here they will be constructing certain things with some mix of money, some of which
will include more than 50% as ours and therefore the existing exemption wouldn’t apply.
Mr. Kimble said it also results in greater spending power when they are coordinated to one
contractor let by the private sector under this case. It will have more horsepower the way that
this is bid and the integrated contracts are arranged.
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Mr. Autry said they will still respect the SMWBE?
Mr. Kimble said absolutely and we didn’t choose to negotiate that. We believe that is something
that we are going to negotiate together and it has to be something that we mutually agree upon.
It is a very important concept. We have a new program being rolled out too, so we’ve got to be
respective of the new program and we are not done with the new program yet so we have some
decisions to make.
Mr. Hagemann said we have shared with them on some of those agreements dealing with other
public/private partnerships where the private sector has agreed to a program so they have an idea
of what the Council’s expectations has been in the past and they indicated that they are
comfortable with what has been required and requested in the past.
Mr. Howard said what range would that be in? I don’t think it is fair to leave that up in the air to
them, because all of us could have different opinions about what that is. I think I would be more
comfortable with how we normally would do the project so you don’t wind up with 11 or 12
different opinions about what that should be.
Mr. Kimble said we have looked at other public/private type deals and what they were able to
achieve and we have shared that the Panthers and they understand what it has been in the past
and we also said there is a heightened awareness and a heightened feeling about the MW
component now because we can also those with the program that is coming up. It is going to be
a timing issue isn’t it Bob?
Mr. Hagemann said technically the program we are developing would not dictate the
public/private partnership. They have looked at the percentages in other agreements and
indicated that they are comfortable with that.
Mr. Howard said that is why I ask about the range because I think if you leave that up to us.
Mr. Kimble said NASCAR Hall of Fame was 16% goal on SBE. That is one benchmark. Wells
Fargo was able to achieve 40% MBE but they did a national use of minority contractors for that
program.
Mr. Howard said we would like to see more local people get the contracts. Mr. Richardson and
Danny, I know when the Stadium was built you guys did a really good job of the MWB to begin
with. Do you remember what that percentage was?
Mr. Richardson said I don’t, but I remember that we exceeded it.
Mr. Dulin said oddly enough I was with F. N. Thompson at the time. Carol Willey handled the
minority participation down there and she had Ron Leeper working with her and I think it was in
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the double digits. It was way above what we had asked her to perform. She would have those
numbers right on top of her head.
Mr. Howard said I want to say you guys …(Inaudible) if you could find a way to just say this is
the way we came up with that.
Mr. Kimble said we did send them some of the prior public/partnership data so they would have
kind of a feeling about where we might want that. We haven’t had a final discussion about what
the number would be. That is something we need to entertain with you. We need to make a
suggestion and recommendation and the foundation will lobby for that.
Mr. Howard said can we just ask staff to give us a recommendation by a head nod?
Mr. Kimble said very good, we will be glad to do that.
Mr. Kimble said number 4 is the biggie. I think Bob you might be in the best position, it is the
A, B and C, lots of conversation with Council last time, great conversation, and this is the
injunctive relief tether first, a backstop on liquidated damages second and third the ability to
have an option to purchase the Stadium and again this has some mirroring to the Bobcats Arena
as well.
Mr. Hagemann said I will start with the reminder of where we are today and that is we have no
contractual commitment from the Panthers that would keep them in Charlotte. The City cannot
influence from a legal standpoint, any decision from the owner, current or future, versus a new
location. We viewed, as we entered these negotiations the most critical issue to the City is what
we are bargaining for, and what we are bargaining for is the certainty that the Carolina Panthers
will be here in this community playing football for as long as we possibly could get. We started
out initially in the 5-year range and we came to you in closed session last time, we had a blended
tether, a hard tender for 10 and a soft tether for 5. We listened to feedback from you and that
was one of the strongest points that you made to us and then we took that to the Panthers and as
Ron indicated, within the last couple of days, it is part of the package agreement, they have
moved to a hard tether of 15 years. What does that mean? It is modeled after what we have with
the Charlotte Bobcats and it is a two-pronged structure. One it is a contractual commitment. It is
a legal pledge in a binding legal document from the ownership that will be binding to any
successor owners to play their games in Charlotte at this Stadium for 15 years. They’ve
specifically acknowledged that if an owner attempts to relocate the team that we have the right to
go into state court before a local judge and ask for the remedy that they had agreed to in the
document, which was a court order, saying no you cannot leave and you must play the games in
Charlotte, North Carolina. Second, if for some strange way that I can’t imagine, a judge all the
way up to the State Supreme Court presumably, let them break that commitment and move, we
would be entitled to a payment of liquidated damages on a declining scale that basically reflects
that we would be paying $115 million of our capital contribution each year for each year they are
here. If they played 10 years, 5 of the 10 years we would have not gotten the benefit of our
bargain and we get a third of our money back as a remedy. Finally, as a practical matter, I’ve
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thought a lot about this, and I think that they would agree, I don’t think there is a snowballs
chance that the NFL would approve relocation that breaks the binding commitment like that
because that would send a message to every city in the country that the League and the owners in
the League don’t stand behind their word. I think we have negotiated the absolute strongest
tether we possible can for 15 years. The current Stadium as you know is not owned by the City.
It is owned by the Panthers on land that we own that would be a ground lease to that. If the team
were to leave under the current arrangements, we would be faced with three situations regarding
the physical facility that is out there. One, that owner who owns an NFL team playing in another
city owns that building presumably and might want to operate it in some way that we really don’t
see happening. Without an NFL Team, why is somebody going to invest the money to get
operating costs and maintenance costs to run that facility. Option #2 is to mothball. Option #3 is
offer to the City the opportunity to buy. We would have no negotiating leverage. We don’t right
now and we wouldn’t then, so, what we have built in is at the back end of this 15-year term if the
City is not successful in structuring a new deal to keep the Panthers here for another 15, 20 or 30
years, we have a 5-year window if we do lose the team where we can buy the Stadium at an
appraised fair market value and the appraisal assumption would be it is a stadium without an
NFL Team. I can’t tell you what that number is but it is a heck of a lot better than what I would
expect an owner to demand in exchange for not mothballing it and the City suffering the
consequences. That is the tether piece of it.
Mr. Howard said I wanted to precede this question by first saying thank you for agreeing to go
along with the terms of 15 years. I’m really trying to figure out and tell me where I’m wrong.
The idea of taking it down $8.3 million every year until you get to the 15 years, I’m wondering if
we could deal with it and I’ll tell you why. I would dare to say that the first few years of a
renovated stadium is not when we need to worry. It is towards the end. Did you explore at all
some type of balloon at the end so it is not in year 13 $16 million to get out of it? Some kind of
way to make it harder at the end. How would you do that? I guess the Panthers would want to
get it forgiven faster, but some kind of way it would be nice if it were harder for whoever
succeeds Mr. Richardson to move. If I’m wrong on that tell me where I’m wrong but I want to
make it harder for the next guy is what I’m saying.
Mr. Hagemann said I will offer two responses. One, again that is just a back stop. We think a
real tether is the acknowledgement that a North Carolina Judge can say we don’t care about how
much you’d be willing to pay, you are staying. That is the first and foremost. This is really a
one in 1000% chance that somehow if they try to, number one, escape within the period that we
agreed to. If the league is willing to let them move and send a message to all other cities about
the word of the NFL, and then the last thing I will tell you is that declining schedule is exactly
what we have with the Bobcats. It was really hard for us to suggest something different than
what the Council had previously agreed as a model agreement.
Mr. Howard said the last couple years of George Shinn owning the Hornets, they put a sub-par
team on the floor, fans stopped coming and it was a really bad situation because everybody knew
it was going to end. That is really what I’m wondering, how do we make this harder at the end
and if it is not possible, I’m good and it is really more of a question.
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Mr. Kimble said we achieved together what both parties coming to you could agree to and I
believe Mr. Hagemann answered it. We have the Bobcats agreement and a lot of that agreement
has been used as the basis for this and it was good enough for them and it seems like it was good
enough here. This is a renovation; this is 15 years, the same declining schedule, and the same
injunctive relief with that agreement. That became the basis of our negotiations.
Ms. Kinsey said if in year 16 through 20 we opt to buy the Stadium, we’re talking about the
structure only because we already own the land.
Mr. Kimble said that is correct.
Mr. Hagemann said we wanted to exercise an option where we would own everything and be
able to do with it what the City wants to do at that time.
Mr. Dulin said along those lines the City purchases this Stadium, I don’t want to own it and you
all don’t want to own it ether, but number one I don’t know if we can afford to buy it in the next
five years. Did you guys have some conversation with the Panthers about, market value scares
me and you mentioned that without an NFL Team market goes down. But it is still worrisome to
me.
Mr. Kimble said let me tell you how you’re protected. This option is in year 16 through 20 after
the 15-year period that has injunctive relief and liquidated damages. Even if you had to purchase
it because it says it is an option, it doesn’t mean you have to in year 16 through 20, it is an option
which makes that new owner pay attention to what is going on and you would still have the 1%
food and beverage tax in place with a 30-year sunset so you have a funding source if you had to
purchase that Stadium.
Mr. Dulin said assuming that it was a 30-year sunset and assuming that this debt service is still
capable.
Mr. Kimble said the debt service is going down to zero after 15.
Mr. Hagemann said the goal would not be to own the stadium or buy it, we would be working on
what is it going to take in the then current climate of the NFL, the economy and the life of the
city to continue to have an NFL team for the next 15 or 20 years. This just protects us in case we
can’t put something together, that we are not left with a building that is now 32 years old with an
absentee landlord and us having another Eastland Mall. We are thinking about what the role
might look like with 32-year old stadium if at that point we don’t have an NFL Team and we’ve
got a building that we don’t own that is of that magnitude in downtown Charlotte. It gives us an
option, a choice.
Mr. Hagemann said Number 5 gets into a little bit of tax complexity that I won’t bore you with.
We will own the things that we pay for, rather than giving it to them because then the IRS would
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consider our contribution as income to them and tax it. We will own it and we will have to lease
to them at fair market value and they will pay rent to us. We will in turn, come to an agreement
for compensation to them for maintaining an asset we own. The bottom line is, the way this is
structured; this will be at worse, a break even for this Stadium. At best a slight positive for the
city. It would not be a negative. What we would pay them in maintenance cannot exceed what
they pay us in rent. It is a structured design to deal with a tax issue that we understand and that
we are willing to accommodate because it doesn’t harm the City.
Mr. Kimble said number 6, in order to continue to maintain this Stadium in the grand way that
the Panthers for 17 years have maintained the Stadium, almost every NFL structured deal, if we
are partnering now with the Panthers and we are partnering on this, and this is a 50/50
proposition where we put in a million dollars, the Panthers put in a million dollars and that is a
maintenance fund, a way to maintain the Stadium. That is what goes into the negotiations
between the Panthers and the City.
Ms. Kinsey said does that run with the 15-year tethering?
Mr. Kimble said yes it does, it says for 15 years. Any funds remaining after 15 years or upon
relocation of the team would pay for the city.
Mr. Dulin said the $2 million the two parties are putting in doesn’t come close to maintaining the
place, so are the Panthers going to continue to fund the overage.
Mr. Kimble said they have anything over and above that. I will contend that they will maintain it
in its great shape.
Mr. Dulin said how did you come up with the $1 million City kitty amount?
Mr. Kimble said negotiating. A lot of these are 50/50 partnership. I think if we are saying we
are putting in more now towards these improvements but they have put in more when the
Stadium was constructed. We feel that we are at or near a 50/05 partnership if you look at what
has happened in the beginning and what has happened now. Fifty/fifty appeared to be a good
mark.
Mr. Dulin said how are you going to fund your million dollars?
Mr. Kimble said out of the 1% food and beverage tax. Remember I showed it wasn’t coming out
of property taxes or other revenue sources. It is coming out of the new revenue source.
Mr. Dulin said everything is covered then and that is important. It won’t dip into starter line
maintenance fees. I’m concerned about the starter line James.
Mr. Kimble said here is another point. The media has been out there saying there is going to all
kinds of extra money if you put a 1% Charlotte only food tax in it. That is not the case. There
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won’t be a whole lot of extra money, which there might be a little bit, but we are talking about is
funding a 15-year debt model which is a more aggressive use of funds, aligning up with the 15year tether and also to capture the $1 million in maintenance per year and to capture the up to
$250,000 per year for documented traffic control. All of that is rolled into coverage under the
1% food and beverage tax and that is 15 years, $250,000, that is $3.75 million that will be rolled
under the umbrella of the 1% food and beverage tax.
Mr. Barnes said repeat that.
Mr. Kimble said look at number 8. That also would be captured as an eligible expense in the 1%
food and beverage tax each and every year.
Mr. Barnes said the $250,000 is that the same as Bobcats?
Mr. Kimble said I believe the Bobcats paid less than that. When you think of the Panthers on a
game day their cascade of traffic to has to be handled is huge.
Mr. Barnes said I have a few questions for you, most of which don’t concern them and as I told
you earlier I’m not really comfortable with them watching this proliferation when other people
can see aren’t here. The 30-year sunset I don’t care for. I think the tax should sunset in June of
2028 at the end of 15 years. It is rare that government imposes taxes for a special purpose and
then allows those taxes to sunset. We almost never do that. People create special taxes and they
exist ad infinitum, and I don’t really care for that. Who is going to insure the lease-hold
improvements? For example a kid loses a finger on the escalator, who is insuring that loss, them
or the City?
Mr. Richardson said we are. To give you a better example, suppose somebody jumps out of the
window, which has happened.
Mr. Barnes said that is contributory negligence, too, and you shouldn’t be responsible for it. I
want to know what the 1% generates over 15 years, over 30 years. I want to know the current
market value of the building. I think you said you were not quite sure, but if you have a little
clue, that would be great.
Mr. Autry said any funds remaining after 15 years or upon the relocation are paid to the city. Are
there any limits on what those revenues would be used for or is it already determined that it
would have to be used in the Stadium?
Mr. Kimble said if it was paid for from the 1% tax.
Mr. Hagemann said if it was their money, a portion of any that was theirs would be unlimited.
The portion that was put in through our food and beverage tax would be limited to purchases
authorized by that tax.
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Mr. Autry said if both parties are contributing to one bucket of money, how do we determine
who’s is what?
Mr. Hageman said it is 50/50 and again we put this in here, it is extremely unlikely that they will
leave so we would get to this clause within 15 years, but given that we fully understand that the
annual maintenance costs exceed $2 million, there is not likely to be a lot of money in there
anyway. We just want to protect against the public thinking that somehow they could walk away,
if they walk away, they walk away with some City money with them.
Mr. Kimble said number seven. There’s always been a desire by the hospitality and tourism
industry in Charlotte to have availability of Bank of America Stadium, Panther Stadium for other
types of events and since we were putting in the contribution of $1 million per year for
maintenance and we were putting in the $250,000 for traffic control, I worked with the Panthers
and with the local hospitality and tourism industry to find a way to get an equivalent value back
for the dollars that we put forward. I will applaud the Panthers greatly. They saw that as an
ability to grow the economy in Charlotte, they are very civic minded as well as a great corporate
leader. After some conversation they agreed that they would allow the Belk Bowl to have free
rent. The organizations that will hold events here still have to pay the expenses of the Stadium,
but they will get free rent for the period of time, for that event and the Panthers have also
allowed up to four additional events held predominately in the off football season because it is
very hard to hold events on the football field and do things that harm the football field in their
football season, to be requested by City/CRVA, wanted to leave this open by us, approved by the
Panthers, approval not unreasonably withheld may use the Stadium rent free on those other four
dates in addition to the Bowl. It was a negotiation and I feel very good that the Panthers allowed
this to be inserted into the draft business terms.
Ms. Mayfield said how does that actually benefit the City or the citizens because for the Belk
Bowl a good majority of the people, like a lot of our other games, come from outside the City of
Charlotte so how is this contract of letting them have this space for free really going to benefit
the citizens. What I’m waiting to hear is the give-back.
Mr. Kimble said the more times you can fill 73,000 seats in that Stadium with people that stay
overnight and spend money in restaurants and do things, the better the return for this community
is on all the things that we are trying to do.
Mr. Mitchell said Ron, I think she is talking about events, there is a big international soccer event
and I think we held three years ago and I think if we could make that a permanent fixture it
would be a perfect example of a win/win for everybody.
Mr. Dulin said what was the event?
Mr. Mitchell said International Soccer.
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Mr. Kimble said the organization, the event planner or event organizer is the one who normally
pays the rent. They will still have to pay the expenses of the Stadium and it won’t be the City
paying those. If you have the events you will raise corporate sponsors to cover the expenses and
that is how you still have to pay for the expenses, but you get free rent. The rent per event day is
significant.
Mr. Barnes said what’s the value?
Mr. Kimble said it is in the $250,000 range. It is a very significant give on the part of the
Panthers.
Mr. Richardson said it escalates each year.
Mr. Kimble said and we have it for 15 years.
Mr. Howard said it is another recruitment tool for the business bureau to recruit games here.
That is how we can say we can help you with the costs. That is the way I would look at that.
Ms. Fallon said do the expenses pay for clean up?
Mr. Kimble said they have expenses that they incur that are covered by the event organizer and
the cleanup gets the Stadium back into the shape for the next season or the next event day.
Mr. Dulin said on this subject, does that mean that the ACC continues to pay rent for their
games?
Mr. Kimble said yes.
Mr. Dulin said other than the ACC but now we are talking about the Belk Bowl and possible four
others. There might be a great soccer game. I’d like to see the Rolling Stones once a year at the
Stadium. But insurance when it is not a Panther related event, does the City’s insurance kick in?
Mr. Kimble said it is the Event Organizer.
Mr. Dulin said they have to cover all of that and then they have to put the Stadium back as they
found it.
Mr. Kimble said either they do or the Panthers have to do it and then they would charge them for
that.
Mr. Dulin said the citizens are covered on that.
Mr. Kimble said that is correct. The City would pay up to $250,000 per year for documented
traffic control costs for Panther game days, not other events but for Panther game days.
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Mr. Dulin said do we do that now?
Mr. Kimble said here is what happened. Many years ago the State Highway Patrol provided
some level of traffic control. When Flood Floyd happened in Eastern North Carolina the
Panthers said those Highway Patrol people would be better served in the state to go help the
flood victims in Eastern North Carolina. They never came back and there are lots of reasons, but
the Panthers have been paying this since 1999.
Mr. Richardson said that is almost shocking to think that you were trying to do a good deed and
it would be just blown away.
Mr. Kimble said Number 9 – Options for sharing revenues for Panthers’ game day parking could
be explored. We have several ideas and some of them involve the State of North Carolina.
We’ve talked to the State of North Carolina about several creative ways in which their money
could come into play. One of those would create a situation where the State of North Carolina,
who is very accustomed to doing infrastructure could provide some of this in concert with
another thing that they might be able or willing to fund which is the indoor practice facility. I
just want you to know that we didn’t put in here what the options were. Remember the last time
we talked about the NASCAR Hall of Fame parking deck that there is 1,060 spaces in it. I talked
to the CRVA and the Hall of Fame and there could be as many as 400 spaces in the NASCAR
Hall of Fame parking deck made available. The bottom line is we didn’t want to throw all of the
ideas out there. There are good ideas, there are things that we can do to structure this well where
new parking revenue comes to folks on non-game days and parking revenue can go to the
Panthers on game days. It is a win/win/win for everybody on the ideas we’ve got, but we’ve got
to figure out which one it starts to surface as the right solution for the Panthers and the City. We
didn’t want to say it could be this or it could be this. We are exploring it and we believe we can
come back with some pretty powerful solutions that would benefit everybody. It needs to be
heard and explored based upon how the state’s money comes into the deal. The state is aware of
one of those ideas. One of those ideas was that the indoor practice facility and parking could be
funded by the State of North Carolina. The City could potentially lease it, we could allow the
Panthers to be a user in the indoor practice facility on days that they need it and all other days of
the year it could be used for an indoor amateur sports facility that benefits the community in
other ways as a supplement to Ovens/Bojangles, not as a replacement for Ovens/ Bojangles.
We’ve got lots of good ideas that the State of North Carolina is privy to the ideas and it is giving
them some great food for thought on how we can really create an even larger economic engine
through an indoor practice facility as one example. But we are not trying to say to the State
you’ve got to do it this way, we’ve made the request and the State is researching the ways in
which they can make their $62.5 million work for them, but also we’ve suggested some ideas on
how it could work for us. One needs to get real creative when you try and problem solve these
issues and I believe that we are getting very creative with the State of North Carolina, the
Panthers and the City of Charlotte. That is how you try to create the winning partnerships
because it does more than what is on the table. It does extra things as well and that is what we
are trying to do with the partnerships.
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Mayor, I think that Mr. Richardson wanted an opportunity to address the group with your
permission.
Mayor Foxx said absolutely. Mr. Richardson we are grateful to have you here today and the
floor is yours sir.
Mr. Richardson said first I would like to thank you for your patience that you’ve given us and I
think Michael, we have responded to every question you had in your mind in a positive way, if
you will go through all of the material that we’ve given you. I’m grateful for the assistance of
the people that have advised me. One of the first times Anthony and I talked about this, the big
issue with him was the tether. I know what tether means, but tethering never entered my mind
when I brought the team to Charlotte. That was not something I had in my mind, but as time
goes by, as you get older, that is probably the stage I am in my life has driven this more than
anything else. I’ve been running businesses since I was 25 years old, fortunately and profitably
since I was 25 years old. We are a proven cash flow for your City. With this agreement we are
going to continue to be a proven cash flow. We call it the practice facility, which decide if that is
the word we want to use, but really that is not the real deal. The real deal is the amateur sports
opportunity but that sort of gets dumped on us as a practice facility for the Panthers. The odds
are we will use the practice facility 20 days a year are rare. It is the opportunity that I’ve been
hearing about amateur sports so my point is it sort of gets dumped on me, but it isn’t me. I’m
part of it, but it is the city and if we are the source that can help us acquire financial assistance
from the State, I’m good with that. When we met over in Raleigh our format was similar to what
we had when we met with each of you and at the end I visited one on one just like I did Patsy
with you, and John and everybody else. I left with a strong sense that every one of the people I
talked to were appreciative of the fact that the NFL was in the Carolinas. They were appreciative
of the fact they thought that I was a good citizen. One of them said to me what would I do if I
was recruiting a company to North Carolina and the NFL had left our City and gone with
somebody else. They said to me, tell me why you lost the most popular sport in America, how
did that happen? They said I would be dead in my tracks. I had no answer or the only answer I
had would be bad. You know that the tether, the legal advisors that advised me not to do the 15
years, all of them advised me not to do it. As you know I’ve been Chairman of the Stadium
Committee. There is no other agreement in the NFL that would do what I’m doing and you can
research the hell out of it, and no more that would do it.
When I started in business and I hoped that someday even though time is critical to us, since we
are going to be partners, I used a felt pen and I used to write first “teamwork” since I came out of
sports, but what I write first after a couple of years in business is “hard work”. I used to have
“teamwork” first, because I had just come out of sports. “Teamwork” doesn’t do it alone. You
can’t get the “teamwork” unless you have these first two. My hands aren’t shaking because I’m
nervous; my hands are shaking because of the medicine I take. You all don’t make me nervous.
“Hard work” and “Harmony”, if you don’t have those two ,you can’t get to where we all need to
get and if we are going to be in a partnership and as I’ve been preaching this for 50 years, I will
say the odds are I’m going to keep doing it. Then that is your third one “teamwork”. You’ve got
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to have the first three. Then when I was real young I used to have “listen” and they kept telling
me we couldn’t be listed on the New York Stock Change by 1976 so I took that out. I didn’t
want to hear it. It showed itself again when I started trying to get the team. All I heard is you
can’t do it. So I took it out again. So this comes and goes. This has been going on for years and
I listen sometimes and sometimes I don’t. This is the last one that we never make an exception
to, “respect”. It bothers me to live in this City and I’m looking at Claire and when I came in
today she didn’t look happy which is unusual and that didn’t make me feel good. I hope you will
do what you think is right.
Mayor Foxx said let me say this Mr. Richardson, we could all read your notes because your
formula for success has absolutely been key to your life and to the things you’ve brought to this
community. I think this Council has been moved by the experience and having time with you.
We do have deliberations to make, but let me say this. Mr. Richardson asked me way back, what
I thought losing the Panthers would be for the City of Charlotte and I said it would be the
psychological equivalent of losing Bank of America and I think that is right. I wanted to say that
in front of my colleagues. I want to thank you for what you have meant to this city. I look
forward to many years of having you in our city.
The meeting was recessed at 1:00 p.m. and reconvened at 1:16 p.m.
Mr. Kimble said Bob and I want to go through the business terms because we feel if you have
questions we want to answer any and all questions, but we have some additional information we
want to share with you and it is in the Carolina Panthers’ Fact Sheet. It is not all on the fact sheet
because at the end of the day, if you are so inclined to move forward with your vote in closed
session, we would like to release this fact sheet along with the business terms that you have been
going through along with a press release on top of it says even more, but I know you are upset
about the urgency. You are wondering why there is urgency. I believe that Bob and I have been
in conversations with them for a while and they have shared with us things that they wouldn’t
even share with us direct answers, but Bob has had a lot of conversations with one of the
attorneys representing Mr. Richardson and I believe Bob is probably in the best position to
describe the dialogue and the information and the way in which you approach the conversation,
why the urgency.
Mr. Hagemann said let me say at the outset that Ron’s and my relationship with their negotiating
team evolved in a very positive way as we went through this for the last 3 or 4 months. I truly
believe, and they have said things directly to us, that they have gained a lot of respect for us as
your representatives through this process in helping them understand your needs, your
expectations and it has got to the point to where, as Ron indicated, they were sharing information
with us tha,t if they really wanted to play hard ball they probably wouldn’t. I’m not saying they
are not playing hard ball but they didn’t have to do it. There was a piece in Sports Illustrated in
the middle of December; Peter King who writes a Monday morning quarterback column and it
caught my attention to that in December. He wrote about the possibility of a team going to Los
Angeles next season. He did not list Charlotte; he listed San Diego and Oakland as possible
teams going to Los Angeles. He said that the NFL had a marker of February 15th for any team to
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seek permission to relocate for this upcoming football season; a team had to show three things.
One, failure in their home market and failure is not in the football field; it is failure to having
accepted the Stadium arrangement. Two, that they would have to have made arrangements to
play in either the Rose Bowl or the LA Coliseum and three, that they had firm plans to build a
permanent stadium at one of four out of five locations. I asked Danny Morrison in front of our
whole group one time whether that was an accurate reporting of the NFL’s requirement and he
indicated that it was. As we started to really sense the urgency of today, Ron and I asked for
some backup plans in case you were not ready to make a decision on other things. I want you to
know that they have gone to great lengths over and over again to communicate to us and ask
them to communicate to you. I’ve seen them directly communicate with every state official that
they are not threating anything, but Mr. Richardson is at a point in his life where he needs to
make some decisions and he has serious suitor or more than one, knocking on the door offering
large amounts of money to buy a football team and those suitors are not interested in staying in
Charlotte. I talked with Billy Moore, the attorney this morning and I said Billy, Council has a
meeting on the 18th. He has said they can’t wait that long. I said does that have anything to do
with the February 15th date the NFL has set. Billy laughed and said I can’t confirm that but it is
very perceptive. Ron and I can’t tell you that it is true, but we think it is a distinct possibility that
if you are not comfortable moving forward with this, they may move very quickly in another
direction.
Ms. Kinsey said is that direction to sell the team?
Mr. Hagemann said Mr. Richardson has said repeatedly, and I’ve heard him say that he will not
move the team out of the Carolinas. Actually I’m convinced that he cares about his legacy and
he would love for his legacy to continue with the Carolina Panthers that he created and brought
here, staying here forever. At one point I tried something out on Billy and said am I reading
correctly that you wouldn’t sell the team because the capital gains tax that he would have to pay
takes a huge hit before the inheritance tax kicks in. I assumed that he would sit on it because if
you just get an inheritance tax the basis of that asset is reset and there wouldn’t have been capital
gains on the appreciation for the life of the franchise. Billy said to me Bob, I have really grown
to care about you and Ron and I don’t want you to get hurt by saying something that turns out
not to be true. I tested it and what he was telling me was please don’t say that Mr. Richardson
won’t sell the team, please don’t say that. I’m convinced he will not move the team, but I know,
that as late as yesterday afternoon, their lawyers were in conversation on conference calls with
lawyers for prospective purchaser.
Mr. Autry said has there ever been an instance in the Stadium game with an NFL franchise
where a city called the team’s bluff and the team ended up staying in the city?
Mr. Kimble said we can’t think of any.
Mr. Mitchell said I’m just reminded of the opposite. Indianapolis, Cleveland, Baltimore and it
happened to us. George Shinn took the Hornets.
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Mr. Autry said but has there been an instance where the city called that team’s bluff and the team
backed down and ended up staying in the city?
Mr. Barnes said let me share something with you all. In my conversations with them on the
phone I said are we dealing with a Jack Kent Cook, former owner of the Red Skins. As you
recall, the deal there was, he died, and his family couldn’t pay the inheritance tax and they had to
sell the Skins. To be clear with you all, essentially what I’m hearing is, my boys are out of this
thing and I don’t want to leave by wife to deal with this, so if I can deal with this now I’d rather
do it and not leave her in a situation of having to divest everything I’ve got to pay the taxes. Is
that the kind of feeling you’ve got, and let’s assume that you both going to say yes it is. That is
the story to me that if he said it publically, I think a lot of people would be, “I get that.” Because
in other words there seems to be a level of l'affaire esness to this process that really doesn’t exist.
The stories he has told, if he told publicly, people would go I get the fact they went from from
$200 million to a billion, they may be a little high and so forth, but they will say, I understand
and having done some research, which I frequently do on these things, this is a fairly good deal
if measured across the 32 franchises. I think there is a human element to it that they are not
letting come out and they should. That is what is complicating our job, you just explained to
people what we all know privately.
Mr. Howard said I think that is kind of the conversation we were having earlier about Raleigh.
Right now we’ve been extremely unpredictable. If I were on the outside looking in, I would
want them…and I want to say this the right way. It seems like the public has a lot more to do
with the e-mails to change our minds and this is going to be a hard one. If I were them I would
want to get much of that as I could behind the closed doors so you didn’t have all of this stuff
happening like they have seen us do with other things we’ve had to deal with. I think I
understand why they’ve done it this way, but I agree with you; I think the story needs to be told
100%. I just think I understand why with us right now, everybody is kind of timid about not
knowing how it would go and would rather do this behind closed doors. Even the Knights were
not the most fluid situation that we’ve ever had.
Mr. Dulin said what I think I’m seeing is that Mr. Richardson said he will not move the team.
He didn’t say he wouldn’t sell the team. We’ve heard that his will says sell it two years after his
death. It sounds to me like he would like to go ahead and sell this team and then the new owner
will be tethered to Charlotte for 15 years, which 15 years is as good as we are going to get. It is
better than we started with so I’m pleased with the 15 years. What the community is going to see
from that and I go along with Mr. Barnes, is that the City Council rolled over, gave Richardson
his sweetheart deal and now he sells the team, which actually is true. But that is not true to those
of us listening.
Mr. Kimble said we don’t know that that is what he is going to do. He said he wouldn’t move
the team is what you are saying.
Mr. Dulin said he said he wouldn’t move the team and I believe that.
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Mr. Kimble said so this is what he said; he’s brought the team to Charlotte, he’s worked it in
Charlotte and I think he wants the team to stay here but he needs a reasonable stadium
partnership in order to do that. We are not sitting here saying after this deal is consummated all
the way through June … (Inaudible), we’ve not heard that.
Mr. Hagemann said I asked that question of Billy this morning. I said is this thing set up so that
if there is a deal or if there isn’t a deal he will immediately sell it. The impression I was left
with, if there is not a deal he’s likely to move quickly into a sell. If there is a deal, when he sells
will depend on his health over the next period of time. Billy did say that he has understandably
an interest in tying things up for his survivors and his wife. We are not saying if you do this deal
he is going to turn around and sell it. I can’t tell you that he won’t, but the message sent to me
was, he may look to do it before his health goes into serious decline.
Mr. Cooksey said I don’t think we’ve really fleshed this through, together. Why do we need a
new tax revenue stream rather than seek the legislative permission to reallocate what is currently
tied up in the Convention Center fund, given that from what we understand, there is going to be
some capacity in the Convention Center fund if some of that debt gets paid off.
Mr. Kimble said good question because there has been a lot of media attention on that. The
Convention Center is a 20-year old facility also. We are talking about a 17-year old stadium and
a 20-year old Convention Center. The debt modeling for the Convention Center is performing
the way it should because it takes care of the operations, the subsidy, the annual maintenance, the
debt on the Convention Center and then major upgrades and major improvements and additions
to it later. The debt has been rising, the principal payments and now it is starting to fall and
starting to create that capacity at the perfect time in the history of the past, such that then we can
use it to help an aging and a tired looking Convention Center to keep us stable in the market,
competitive in the market place from a Convention Center standpoint. If Greg Gaskins were
here he would tell you that that debt modeling for that future protection and preservation of the
Convention Center is working the way it was supposed to. If you “rob” that to do it for another
project you could harm the Convention Center’s ability to sustain itself.
Mr. Cooksey said about the prepared food and beverage tax proposal, on the proposal #2 about
the interest may help to the $187.5 million over 15 years by the City’s interest rate. Remind me
again about what in the first year, the estimated revenue of 1% will be.
Mr. Kimble said $19 million to $20 million, Charlotte only.
Mr. Cooksey said rather than this 15 year timeframe with a 30-year sunset and the like that it is
going to be funding debt, why not simply if the commitment from the Panthers is to be worked
on these improvements over 15 years why not simply transfer the cash to them and not incur debt
or debt costs?
Mr. Hagemann said we don’t know exactly what they are going to spend the money on and when
they are going to do it. We talked with Greg and he said we will have to deal with them when
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they have needs for our money. We are not going to go out in the market and borrow $125
million and put it in a pool. If fact we can’t do that under existing State law, so we need to
identify projects within that and then Greg and his team will look at what is the most intelligent
way to raise that money. It may be PAYGO as we build up some capacity. Some of it may be
linking it to other commercial paper type so it gives us the flexibility using Finance’s expertise to
figure how best within that $125 million to generate it so it is available for the specific pieces
they need to do, over the 10 to 15 year period. We simplify for conceptual reasons to think about
it as a 15-year financing.
Mr. Cooksey said if I recall and understand that the Knights’ deal accurately, that is essentially a
cash flow to them that they are incorporated in their sources of funds for paying off the debt that
they are going to be incorporated with. Again it is an issue of cash going over not creating any
new debt for us to be managing with the hotel/motel tax that we are using for the Knights
Stadium. Why not something like that, but this is set up as a cash flow to the Panthers and they
manage the debt with our revenue as a source of funds.
Mr. Kimble said taxes; we’ve heard a lot about that and we listened. I don’t know if you know,
but, the original deal was give the Stadium to us and it will be publicly owned Stadium and it
won’t pay property taxes. We said time out, we’re not going down this path and we called time
out and said we’ve got to talk real seriously about what the City’s goals are versus what your
goals are and we had the conversation about us getting property taxes and them avoiding income
taxes and finding the right partnership that can win for both parties. Partnerships are about
understanding each other’s needs and finding the common ground where it works for everybody.
Mr. Cooksey said and what are we getting in property taxes a year out of that?
Mr. Kimble said $2.4 million a year County and City combined.
Mr. Cooksey said ours is roughly $800,000 or $900,000?
Mr. Kimble said the County is getting about $1.5 million and we had to protect the County’s
interest in this even though they’re not a party because they will go bonkers if we knock
something out from underneath them. The County is a player even though they are not a player.
Mr. Hagemann said that was one of the toughest points because they were hell bent from the
beginning to get out from paying ad valorem taxes and tangible taxes on the leasehold interest
and we just drew a hard line saying, in our view, that is a political non-starter because if you take
a whole lot of the general fund from the reduction of property taxes, that falls to the other
property taxpayers.
Mr. Cooksey said I asked them for three things. If we are going to do a local support, I was
interested in a broader local support at the very least countywide, preferably a consortium of
regional counties to lower the tax burden on Charlotteans and the response I got was, well we
don’t have time to do that. I was interested in changing the name of the team from the Carolina
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Panthers to the Charlotte Panthers. Most NFL teams have a city name, not a regional name and
the City is being asked to do half of this so we’ve got the biggest interest in this proposal and if I
recall correctly, the biggest tax beneficiary is more the State than it is us, and the response I got
back on a rename, oh that is not going to happen. I was interested in turning the $125 million
into a limited ownership interest and the response I got from a man who expounded upon his
skill at getting votes from NFL owners, said no, the NFL won’t go for that. So to speak
metaphorically out of a biographical incident, I think that the annual salary should be $10,000.
I’ve been offered $9,750 and so I’m willing to walk away, so I’m a no on this deal.
Ms. Mayfield said the statement that you made earlier, was that the perception in the community
would be that this ask opposed to reality of Jerry Richardson going out and having that
conversation, we saw that no he’s not necessarily talking about is let’s make this deal and then
he’s going to sell it as quick as he can. But, the perception in the community would seem like
that…
Mr. Dulin said I think the perception in the community is going to be that we know different,
although it is a good deal, but we’ve given behind closed doors the Panthers a very good deal on
the backs of the prepared food and beverage suppliers. Then if he does indeed have suitors that
will be tied. If he said he was not going to move it I will take him at his word, but we need to
tether for whoever he sells the team to. I think the perception is going to be that we’ve given him
a good deal and now that he has got his good deal he is going to sell it. We are adding value to
his part of the business.
Mr. Kimble said potentially we are going to tell you that the tethering devalues the team.
Mr. Barnes said only because they can’t move it.
Mr. Hagemann said correct. To a perspective purchaser, the team is more valuable with what one
of their people describes as a passport; a right to get out of town. That Mr. Richardson hadn’t
tied it to Charlotte; actually they told us if this was just about the money, he wouldn’t be
spending time here. He would sell the team and let it go and he would get more in a sale without
the tether than he is with the tether.
Mr. Dulin said I get that. I think the perception is going to be, even in my household, and I will
have to explain it to Cathy and I have told her nothing about what is going on. Even in my
household, she is going to think that we’ve given him a pretty good deal.
Ms. Mayfield said what I’m thinking about is strictly the economics of it. What would the
impact be for the numerous employees that work in the Stadium, security as well as all the
vendors, the cleaning crews, the hotels, the restaurants outside, the vendors that hop up on the
weekend? I’ve had a couple people say why are you all considering it? During the Super Bowl
when we were all hanging out together for the Super Bowl, they were saying I think I should pay
for it as a PSL, why would we not invest as a PSL. I think the responsibility still falls on us to
get out into the community once we know where we land today and say this is why I landed
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where I landed, but that idea that we are giving him something. It is up to us to tell that full story
as far as the City made this $60 million investment back 17 years ago and this has been the
impact for that investment. For me that is what I’m thinking about as what would the impact be
if they weren’t here when we just experienced this with our NBA team and still really have not
gotten back on track with that whole fiasco. I did not think about what you mentioned earlier as
far as that perception of us moving forward, saying we don’t have a tether and then him
immediately selling the organization. From everything that I’ve read and we just look at history
and not speculate, we see that there is this long commitment, but at the end of the day he is at an
age, he’s had some health issues and he does need to think about what happens next. Any
responsible adult, if they are married, is going to think about how do I protect my family when
I’m gone. I think we have a responsibility of looking at what information we are going to get out
there, making sure we give accurate information and not partial information because we didn’t
do the research on our own to figure it out. I hear the three options that you gave Warren. I
personally agree with the idea that since Charlotte is footing the bill of it, then it should be the
Charlotte Panthers. That whole process of the rebranding and everything that it costs, I said
because I asked if it is the Carolina Panthers, then why isn’t the State of Carolina helping to
offset this cost instead of the City? With the Carolina Panthers why not hit South Carolina
because they come over here, as well.
Mr. Kimble said we will address that when you would like us to.
Ms. Mayfield said I would like for you to address that right now.
Mr. Kimble said as much as we tried to say why don’t you move your training camp to North
Carolina, we entertained as many things as we could to try to bring as much here as we could. I
believe that they are in conversations with South Carolina about how they can help them in their
training camp in Spartanburg, South Carolina, so the State of South Carolina is being asked for
another piece of the Panthers and that is another reason why I think it is not the Charlotte
Panthers right now, it is the Carolina Panthers and because he is a great civic corporate leader,
but he also has that route in Spartanburg and that is another thing that we asked.
Mr. Hagemann said two other things about South Carolina. We asked what kind of tax revenue
South Carolina gets out of the Panthers. The way the NFL salaries are structured their bonuses
are paid and a lot of the money is in form of bonuses in North Carolina.
Mr. Kimble said it is all on record. Are you okay with this being in front of the public?
Mr. Hagemann said the salaries are paid over the 17 game NFL season and what is paid in the
training camp period is a very nominal amount, what they describe as per diem. South Carolina
is not getting income tax, like we are. South Carolina can’t spend money for improvements in
North Carolina. And if you think about it, the residents of South Carolina who come to games
are putting money into our economy.
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Mr. Kimble said that level of conversation we have had with them because we need to survey
this as well as we can and we put the things on the table that Mr. Cooksey asked us to. We put
all the things on there that you asked us to do and got answers to all of them.
Ms. Kinsey said this deadline that you mentioned, was it the 15th of this month, will the State
have a decision before that deadline?
Mr. Kimble said no, but that is another part of the urgency of what we are doing and it does get
down to who goes first. They want to know what the City is going to do and the City wants to
know what they are going to do. How do you blend that and there is a sense of urgency on the
part of the State of North Carolina General Assembly to move this quickly.
Ms. Kinsey said if the decision is no, if the State says no before the deadline, he wants our
decision so he can go ahead and sell the team before that deadline?
Mr. Hagemann said no, first of all I’m not telling you that they have told me that that will
happen. When I brought up the February 15th and what I read in Sports Illustrated, Billy told me
you are astute. There was a signal, but they didn’t tell me flat out what would happen, so I’m not
saying that we know exactly what will happen if you say no. I think that Mr. Richardson, based
on the conversation that he had with the Governor and the leaders in the State and House, was
sufficiently reassured and has a sufficient degree of confidence that the State will likely do their
part. He knows he is not going to get a bill through in three days or a week, but he is sufficiently
confident from those conversations that he is going to go down that road with us, knowing that
there are still some risks before he finally has a deal.
Ms. Kinsey said so why did they even mention that deadline?
Mr. Hagemann said I brought it up. If your decision is going to be no, they want to know that
now.
Ms. Kinsey said let’s assume that we are going to okay the $125 million, just assume, is there
any way we can tie that to improvements that benefit everyone who uses that stadium and not to
the club level or suite?
Mr. Kimble said you could try that, but I don’t think you would have a deal. I think that has been
discussed at your last meeting.
Ms. Kinsey said okay, but how much do the escalators cost or the scoreboard, anything that is
beneficial to everyone that uses that Stadium?
Mr. Hagemann said no, what they have told us is the vast majority of the money that we spend
on improvements will be in the areas that are available to everybody.
Ms. Kinsey said can we have some kind of, is it $125 million?
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Mr. Howard said would that change your vote?
Ms. Kinsey said I’m not saying. I just want to know and the reason I want to know when I talk
with people about funding this, they have said well I might be okay with it if it goes for
everybody who uses that Stadium and not to the people who have the suites and the club level.
We know that they are going to have to do some things to the suites because Jerry said they
were.
Mr. Kimble said I think he said that would be freshened up, it would be limited, let’s talk about
it.
Ms. Kinsey said he said the suites, Ron. And if this happens, we’ve got to go back out and talk to
our people.
Mr. Kimble said I’m just trying to answer your question.
Mr. Hagemann said for tax purposes to avoid our contribution being treated as income; we need
to own what we pay for. They need to be discrete pieces of equipment that can be described. I
don’t know that you could do that with floor treatment and wall covering, I’m not saying you
can’t, but it strikes me as very, very difficult. Our money is going to go to big things that can be
identified, and I don’t know if there are even possibilities of having big things in the suites that
we would own.
Ms. Kinsey said I know the escalators are expensive, but I would think those big honking
scoreboards are, too. If there is any way we can say look this is what the public money is being
spent for, I think that makes it a little more palatable.
Mr. Kimble said I hear you and I will take a stab at this and have a dialogue. Much of the things
that you are believing are not fan friendly and for the average fan, a fan would claim that they
are; to have a giant scoreboard like that.
Ms. Kinsey said I’m saying that is, it is just the suites and club level.
Mr. Kimble said there was a very low number on the $250 million that they were looking for.
They are going to improve the internet and the wanding area where you come in.
Ms. Kinsey said if everybody can use it, I think it makes it a little bit easier. One more quick
one. When we talked about the $62.5 million from the State, and you mentioned some of it
would go to amateur sports, how does that fulfill the State’s commitment to the Panthers of $62.5
million? It sounds to me like it is giving us more than the Panthers and maybe I shouldn’t be
upset about that, but I want to make sure that it is truly $62.5 million from the State and not
prorated to what the Panthers use. I didn’t quite follow you on that.
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Mr. Kimble said it could be that an indoor practice facility with the land and a parking lot or
parking structure next to that indoor practice facility could cost $62.5 million. The Panthers
believe that the indoor practice facility is a great amenity and it also locks them into Charlotte for
even the 15 years and longer thereafter. They believe that an indoor practice facility is important
to their being in Charlotte.
Ms. Kinsey said is that a part of the original $250 million?
Mr. Kimble said yes, it was a part of that. And the State of North Carolina, if you look at Speaker
Tillis’ comments, said we are not looking to put $62.5 million directly into the Stadium. They
are trying to find creative ways to participate in this partnership, real important to the Panthers
and real important to us. They are being very careful about their word choices right now.
Mr. Howard said who would own it?
Mr. Kimble said we talked creatively, we put a proposal on the table that said the State could
own the asset and then you could lease it to the City and the City could operate it and the
Panthers would be a user. There are ways to work that I think we can all advantage out of that
kind of creativity and partnership. We are trying our best to work with the State in harmony, so
when we are done, the three parties, the citizens of Charlotte, the Panthers and the State will be
happy.
Ms. Kinsey said when I said the fourth owner would be the citizens, I didn’t mean us. I meant
the people who really pay that extra tax.
Mr. Kimble said I’m sorry I missed that. I also apologize, Ms. Kinsey, last time when I said the
food and beverage tax was a choice. I have some better language and I was scolded on it and
appropriately so, and so I’ve come back with some new ideas. The part of what we are talking
about; tell us what we’ve done wrong and maybe it will make it better.
Motion was made by Councilmember Mitchell that we give staff the authorization to move
forward with our support on the Panthers’ renovation with one caveat, the authorization based
on the General Assembly approval. Councilmember Mayfield seconded the motion.
Mr. Mitchell said to get to Mr. Barnes’ point, let’s do this in a way of building a relationship
with Raleigh so Raleigh don’t get bent out of shape. I hope we can make that language reflect
that we want to move forward, but we understand the General Assembly has to approve the 1%
levy.
Mr. Barnes said I don’t understand the motion and I think it is pretty premature, and it might
shift me, actually. I want to ask some questions that I’ve been trying to figure out and make a
couple statements. Ron, I had asked a question about what the 1% tax would generate over 15 to
30 years, obviously it will generate $143.75 million over 15 years and what would it generate
over the next 15 years?
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Mr. Kimble said it would generate more than the $143.75 million. You do the 15-year debt
amortization schedule; you can probably get up to a little over $200 million in the early years of
capacity. One of the things we want to preserve is the opportunity to work with the State of
North Carolina on the concept of an indoor practice facility and amateur sports facility.
Mr. Barnes said you are about to hit the wall on number 4. I like direct answers to some of these
questions because if you answer the question directly, I can pretty much get to where I want to
get to, quickly.
Mr. Kimble said a little over $200 million.
Mr. Barnes said if you could also help me understand, you explained why you guys put the 30year sunset in here and as I indicated to you, if I understood Mr. Mitchell’s motion, I would
move to amend it to say there would be a 15-year sunset because I don’t think the tax should last
any longer than it takes to finance the improvements. If you explain what you explained earlier
perhaps I might look at that differently, but I would like for you to speak to that and then I’ve got
a couple more.
Mr. Kimble said I’ll go directly into the answer. If we don’t reserve the opportunity at this
moment in time for an amateur sports small component here, you may lose the support of the
hospitality and tourism industry and we are trying to work very hard with the State of North
Carolina to come forward with a great package that has the opportunity to support some things
that you talked about in your ED Focus Area Plan today, which is amateur sports and trying to
find a way for the partnership to be even greater with than just the Panthers.
Mr. Barnes said let’s speak about that for a moment, the amateur sports. We had talked about
basketball at Metrolina and now we are talking about that over at Bojangles. We’ve got soccer
coming in Matthews that the County is doing. I had talked to some of the hospitality folks about
a tennis facility near UNCC and it had also been some talk about a softball-baseball type
complex. What it is the scope of the amateur sports facilities that you contemplate us working
on over the next five years?
Mr. Kimble said the hospitality and tourism industry would say go faster rather than slower, but I
think we need to be realistic and you are the ones who would levy the tax and you are the ones
who are in charge. So it is the pace that you are comfortable with, but there are discussions along
the lines you described, tennis and there are other types of indoor amateur sport facilities. I think
it is as much as you want or as little as you and it is a dialogue that the Council needs to have.
There are over $100 million worth of improvements that they would want to see in terms of
amateur sports, but I think we need to be more reasonable about how we go about that and
strategic about who our partners are. There are ways to leverage that dollars with the private
sector and enter into public/private partnerships, so I don’t want to lead to an answer and say this
amount, but if we leverage the private we can double our assets.
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Mr. Barnes said if that particular constituency is rushing us to do this, help me connect what 25
years from now has to do with our ability to do softball, baseball, volley ball, basketball, tennis.
Mr. Kimble said because to make those dollars go further, you don’t use them as “pay-as-yougo” dollars, you use them as financing dollars and if the task doesn’t throw off capacity for other
things, because you’ve got to create your significant reserves to fund the Panthers improvements,
that a model wouldn’t throw off some of this little extra money for amateur sports until later
years. If you have to issue 20-year debt for that partnership arrangement you need the ability for
it to go longer than 15 years to capture the debt period that you can enter into on an amateur
sports facility.
Mr. Barnes said we chose to sunset the tax in 15 years, literally put into this motion and the
agreement, clarify the downside.
Mr. Kimble said you would hamstring your ability to issue longer term debt for those
partnerships.
Mr. Hagemann said I heard Greg say you would not be able to issue debt. If you went out in five
years to finance an amateur sports facility and your revenue stream only went 10 years, unless
you had 10 years amortization schedule, you won’t be able to borrow money.
Mr. Kimble said right, it leverages greater capacity when you have the ability to issue longer.
Mr. Barnes said this amateur sports piece is a quarter of a penny?
Mr. Kimble said it depends on how the state money comes in because if their money funds the
indoor practice facility, then you would want this tax to be able to cover anything having to do
with that facility when it is being used as amateur sports facility, so I can’t give you a straight up
answer that I would like to give because it matters on how the State’s money comes into the deal.
If we didn’t have to worry about the indoor practice facility involved with the State and didn’t
have to carve any of this off, I am told by Greg Gaskins that .75 to .8 of a cent could be for that.
Mr. Barnes said of the $143.75 million in the first 15 years, is that the full penny going to the
state or is that the .75 or .8?
Mr. Kimble said it is the .75 to .8.
Mr. Barnes said so what is the balance, is it $57 million?
Mr. Kimble said $50 million to $60 million in debt capacity.
Mr. Barnes said my point is, that we will have about $200 million in capacity the first 15 years
and about $200 million in capacity the second 15 years.
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Mr. Kimble said you will have more capacity than that because as the tax grows, and I didn’t
mean to say in the second 15 years, you are going to have much more than that in the second 15
years, because of the capacity of the tax and the revenue stream.
Mr. Barnes said my question is how much money would the penny tax generate in the second 15
years?
Mr. Kimble said I don’t know if Greg has run the debt model out that far, but it would be much
more than $200 million.
Mr. Hagemann said what you have to do is project inflation and growth of spending in food and
beverage.
Mr. Barnes said has Greg done that? Now you’re getting me into the political thing because you
are establishing a kitty of tax money. You’ve done it with the Convention Center. I’m trying to
be supportive and you are making it…
Mr. Kimble said the uncertainty in debt issued in the 16th year for 20 to 25 years, the longer your
debt term, the more capacity it creates, but it is greater than $200 million in that second 15 years.
Mr. Barnes said so what I’m saying to you is help us determine through that model what the
value of the second 15 years could be. To Patsy’s question, I think Patsy, if I can speak for you,
what she is concerned about seeing in that Stadium is what we saw in New York. The oak panel,
Giant’s club level, the Tiffany motif in used in the Jet’s Club Level and I don’t think that is
going to happen, but what I’m saying is, if that is what they did with it, that would be a problem.
What I’m hearing you say is that is not we envision them doing with that money.
Ms. Kinsey said what I’m saying is if it could be used by everybody that goes in that Stadium,
then that’s a lot more palatable.
Mr. Barnes said the practice facility would be in Charlotte, not Rock Hill and that should be
included, somewhere.
Mr. Kimble said yes, the indoor practice field, nearby the Stadium.
Mr. Hagemann said it has to be, because of the logistics of moving the players and the equipment
for practice on a short notice because a thunderstorm comes through.
Mr. Kimble said again the 30 years is for more than amateur sports because there is going to be
another evolution of Stadium major mega improvements for a new Stadium after this 15 years
and this also creates the ongoing revenue source for the public’s participation, our share, of those
public/private partnerships. The reason it is 30 is for more than one reason; it’s for multiple
reasons in order to sustain the debt issuances for future improvements to Bank of America
Stadium.
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Ms. Fallon said the only thing that extra 15 years would be a pot for when we had to improve or
rebuild that Stadium so we wouldn’t have to go borrow. The other thing is what happens if lose
the Panthers?
Mr. Kimble said $636 million in annual income impact and nearly 5,000 jobs.
Mr. Fallon said and something else; the branding of Charlotte, the lost publicity of what it could
mean for Charlotte to lose an NFL Team. What has happened in other states, other cities, where
they’ve lost it?
Mr. Kimble said the branding is significant. Also the civic mindedness of the Panthers which is
philanthropic and fuels a lot of nonprofit engines in our community, so you would lose that. If
people measure the branding by number of hits and number of exposures, if you went there it
would be.
Ms. Fallon said it would take Charlotte down a notch in publicity and in revenue.
Mr. Hagemann said I want to remind you we have no rights to that Stadium and we would
immediately be facing what do we do about the Stadium. It is an additional consideration if you
lose it.
Ms. Fallon said I’m aware of that. I’m just taking it from another point of view other than
economic, which we know would be a tremendous impact.
Mr. Kimble said one last consideration in any proposed legislation we wanted to let you know
what we are thinking about. The Convention Center in 2001 had a Legislator who was pretty
angry at the time, imposed a sunset on the existing Convention Center tax. In 2001 it read as
follows: “From here forward if the Convention Center doesn’t do an expansion of at least
100,000 square feet by 2011, then the tax would sunset.” When we did the NASCAR Hall of
Fame and the Ballroom, we met that requirement so we did an expansion and so it didn’t sunset
and it said if that doesn’t sunset the tax, the tax is only good for 30 years from this date in 2001.
Our Convention Center tax is only good now until 2031. That is only 17 years from when we
might try and issue any debt on the Convention Center to make improvements for it so we
couldn’t issue long-term debt because we don’t have the adequate time period that we would
want to leverage as much capacity as we could. We would like to include that as a provision to
extend the sunset to the same 30 years. It is refreshing it to the same 30 years that this legislation
would be. We don’t know what might happen there, but we’d like to push it because it is very
important to leverage the City’s funding and the City’s assets, but we would have to listen to
what our State Legislators said. It is an idea and what we are saying, it advantages the City of
Charlotte.
Ms. Pickering said the 1% food and beverage tax generates how much over the first 15 years?
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Mr. Kimble said $19 million per year and if you grow it by a certain percentage each year you
would have to add up all that revenue flow increase over each year. It starts out at around $19.5
million.
Ms. Pickering said how much is that going to generate over 15 years?
Mr. Kimble said it is probably $300 million. You are issuing debt so you would have interest
carried on that principle amount and you shorten it to a 15-year debt schedule, the capacity of the
tax is somewhere around $200 million.
Ms. Pickering said what I’m trying to get to is the extra over the $143.75 million.
Mr. Kimble said $60 million of capacity.
Ms. Pickering said in other words, extra over what.
Mr. Kimble said you could issue debt of $60 million more in the first years of the tax in order to
fund other things.
Ms. Pickering said it sounds like the hospitality industry is not on board unless there is this extra
money.
Mr. Kimble said that is what they have said. We want to help the Panthers and we also want to
grow amateur sports and we are supporting this under those requests. That is what they would
like to support and that is what we have their support for.
Ms. Pickering said once we put this out to the media and the public and we start getting
hammered, which we will, and they are picking it apart and questioning it, and we’d say maybe
that could be changed a little bit. Is this tweakable?
Mr. Kimble said he business terms are not tweakable at this point, if you are going forward with
them unless in the final agreement there are some things that come out and we discussed it with
the Panthers and they are okay with those. I think if you are nodding to go forward with these,
these are pretty much the business terms that we are going to negotiate in the agreement. We
have talking points and we also have a suggested press release today if you are going forward
because we heard you loud and clear, you need to be saying what this gets for you. We’ve tried
to do everything to get out ahead of this, on your behalf.
Ms. Pickering said but this is what the problem is going to be; it really is a done deal; even
though we are saying there will be a public hearing.
Mr. Hagemann said point of clarification, so that we know when we write this up it can
accurately describe the Council’s action, if you were to make a motion to tentatively approve the
business terms, which includes everything about approaching the State of North Carolina, then
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we can put out a document and say this is what the Council tentatively approved. To construct a
suggestion to the wording of the motion that makes it clean and clear to what is it.
Ms. Mayfield said does the motion need to be amended or resubmitted for that clarification?
Mr. Hagemann said I’m just offering a suggestion for the maker of the motion.
Mr. Mitchell said I trust your language to say, tentatively approve, with conditions upon the
State’s approval. I think that gets back to Mr. Barnes and Ms. Fallon’s point.
Mr. Barnes said could you restate the motion because I’m still not sure what the motion is?
Mayor Foxx said to tentatively approve the business terms on the condition that the
State of North Carolina participates as requested.
Mr. Barnes said are those the business terms indicated on this sheet?
Mr. Hageman said yes. Actually, I’m looking at something different; the “City/Panthers/State
Partnership Proposal.” The other is intended as a fact sheet for you but also an aid for the public
in explaining what are the facts in the context of the decision and what are the choices and what
are the consequences of the choices.
Mayor Fox said I have not said a word since the Panthers left because I wanted everybody else to
have a chance to say their words. The first thing is, I do think this is an important issue. What is
hard about this is if we approve this people aren’t going to know what could have gone wrong.
If we don’t approve it everyone will know what went wrong, but it will be too late to fix it. This
is one of those decisions that is not set up for everybody to feel great about at the end because of
that. On the other hand because this is an important issue, but is not necessarily to me, the most
important issue. I won’t beat a dead horse too much. The Capital Improvement Plan to me is a
far more important issue for this Council to get figured out. By taking this action I’m going to
feel a lot more strongly that we have to do that in this term on Council. I just don’t think we can
do something like this and not figure out police stations, sidewalks, infrastructure etc. The other
point is that I think you saw today and you’ve heard, I guess it started yesterday with the Mayor
of Atlanta, if I weren’t here hearing what I know, and what I’ve heard, I wouldn’t get this. Most
people can’t figure this out, because there are a lot of zeros involved in professional sports and
you look at what the comparison is to what we are gaining as to what other cities have to do and
it is actually very well, but then you look at those numbers versus the way the average person
looks at the millions and millions of dollars, it is whole different ballgame. The hard thing for
this Council is we are in the middle of coming out of the worst recession in 80 years, people
won’t feel very good and yet we are making decisions that in this case 15-year decisions and in
other cases 20 and 30-year decisions. It is impossible for us to not make a decision today that
doesn’t have massive consequences. That is also true in just about every other thing we do. I
would ask you to think about if we do this today, there are no excuses for not doing the other
stuff.
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The vote was taken on the motion and was recorded as follows:
YEAS: Councilmembers Autry, Barnes, Dulin, Fallon, Howard, Kinsey, Mayfield, Mitchell
and Pickering.
NAYS: Councilmember Cooksey.
Councilmember Cannon was recused.
Mr. Kimble said we have talking points for the Council and hope they will find them helpful.
We think that we want to discuss with you about how to release this.
Mayor Foxx said I suggest that we immediately roll over into our other Closed Session and that
we not release that until we walk out. I think what would make a lot of sense, because you are
going to be asked by the media anyway, is to maybe have some availability after this is over.
Mr. Kimble said these are called City Council talking points, but we also have the business terms
and we have the fact sheet that we wanted to distribute.
Mr. Autry said I would like to have electronic versions of all of those.
The meeting was adjourned at 2:17 p.m.
Stephanie C. Kelly, MMC NCCMC
City Clerk
Length of Meeting: 2 hours, 46minutes
Minutes Completed: April 3, 2013
Public Inspection Status
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(A)
Must Remain Confidential
(B)
Confidential Pending Release
(C)
Release for Public Inspection
February 8, 2013
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Release Authorized by:
City Attorney/City Council
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Date