Man, be sure to keep all the hype in the Uptown paper of record about the Uptown arena. It’ll come in handy when Bobcat Johnson asks for a new arena deal or he’s leaving town. What? You mean the connection between the NBA team and the arena is not exactly clear from the inches-and-inches the increasingly skinny Uptown paper provides?
Contrary to the impression conveyed today, the arena was not primarily built to host the CIAA tourney, the NCAA regionals, or the ACC tourney — of the latter of which will probably never visit Charlotte again due to the small size of the arena. But we digress. First and foremost, the arena is home to Johnson’s NBA franchise — a franchise that is on pace to finish 20 games below .500 and with some of the lowest attendance figures in the league.
Unless Johnson wants to continue to subsidize the team via his other business ventures, something has got to give. And I predict here and now that that something will be the taxpayers of Charlotte. I can tell from dopey statements like this:
Many call the arena a catalyst for nearby residential towers, including one named Courtside. Construction of those buildings — with several hundred living units — and the arena has provided work for thousands of people and added to the city’s tax base.
“The cranes don’t lie,” said Mike Crum, chief operating officer for the Charlotte Regional Visitors Authority.
See? The arena caused development. Some numbers to keep handy:
Built for about $265 million, the arena ultimately will cost $426 million when the debt is paid off. So far, revenues from hotel occupancy and rental car taxes — the city’s two main funding sources for arena debt — are well ahead of projections.
Last year, hotel tax revenues were 56 percent higher than projected, while rental car tax revenues were 30 percent higher. Between those gains and others, the city pocketed about $2.9 million more than it owed in annual debt payments instead of taking an expected small loss. That money will go into the arena account’s reserves, officials said.
Of the 8 percent tax charged on hotel rooms, about 1.3 percentage points go toward paying off the arena. The rest of the tax pays debt for the NASCAR Hall of Fame and the Charlotte Convention Center and operating costs for the Charlotte Regional Visitors Authority, and goes to Mecklenburg County and other cities and towns in the county.
Not all arena-related costs are covered by hotel and rental car taxes. Money from the city’s general fund goes to overtime pay for police officers and traffic control at arena events. City officials budgeted about $758,000 for that each of the last two years, down from about $1.2 million in 2006.
And what of the property taxes that the city could have collected on the parcel were it not a city-owned arena? Shhh. Don’t talk about that.
As for other events, we went over this a couple weeks ago — there is no great pool of additional events that Charlotte is gonna land. This is about as good as it gets, give or take a few events. And it is down-right delusional for Bobcats execs to think that getting people into the building for a concert is gonna have any impact on making them come back for an NBA game.
As always, the central planners forget about income, personal income. You know the stuff that pays all the taxes and buys all the tickets. Income is not unlimited. Entertainment dollars are notoriously fickle to boot. Uptown Charlotte has hopped on the treadmill where it must constantly chase down new people with new unspent, disposable income in order to fund all the attractions.
Let’s cut to the end game: Either the Bobjohnsons win a ping-pong lotto soon and put a playoff team on the floor or it all comes crashing to a halt.
