Here’s what I learned from the Observer’s diligent excavation of the NASCAR Hall of Fame deal, that very early on City attorney Mac McCarley cut through the BS it see what NASCAR was up to:
In his notes on NASCAR’s initial proposal, McCarley wrote that “the agreement as drafted is so one-sided as to seemingly treat us as though we’re a common t-shirt licensee.”
McCarley explained this month that he was concerned NASCAR’s draft didn’t treat Charlotte like a partner. It was based on NASCAR’s standard licensing deals, giving Charlotte very limited rights to use the sport’s logo and related trademarks to promote the hall.
The final version negotiated by the city gives the hall of fame access to all of NASCAR’s logos — past, present and future — as well as video footage and other archival material that will be used in the development of the hall.
That gives Charlotte unprecedented access to the NASCAR brand, McCarley says, making the city an equal partner.
Nice try, Mac. An attorney is supposed to try to protect his client’s interests and not make them look bad and as the city was utterly fixed upon winning the NASCAR Hall no matter the terms, McCarley has done the best he could. But the simple fact remains that NASCAR is not a partner in the Hall of Fame. A partner would actually be risking something in this venture, NASCAR is risking nothing.
On top of a $150 million publicly-built and operated Hall, NASCAR gets a perpetual revenue machine from the city of Charlotte. To recap:
• Five percent of restaurant revenue; 7.5 percent of catering, special event, special admission and gift certificate revenue; 10 percent of all other revenues.
• A $100,000 annual payment, increasing by 3 percent per year, to the NASCAR Foundation charities.
• A 99-year ground lease (for $1 a year) and free parking spaces if NASCAR builds an office tower at its own expense.
• Option to purchase at fair market value a 3.5-acre tract of city-owned land across Caldwell Street from the hall of fame.
The parking for the NASCAR will be worth at least another $4 million when the city builds it and the option to buy the city land — well, that could be worth millions too in the coming years. And here’s the kicker, should lofty Hall attendence projections not be met — and they are several times that of the NFL Hall of Fame — the license payments to NASCAR still continue, just in reduced or deferred form. This means feast or famine, NASCAR gets its cut. That is not a partnership; it’s a stone cold stick-up.
Something approaching a true partnership would at least see NASCAR do without such payments should attendence fall short. After all, that would reflect the fact that the city is not, by definition, seeing a return on its $150 million “investment” via Hall activity. Besides, if this thing is such a sure-fire hit, what’s the harm? The harm would be introducing some risk for NASCAR into the deal, and NASCAR does not do risk — not on the business side, anyway.
McCarley saw that, but it did not matter. Charlotte was punked by NASCAR and evidently likes it that way.
