by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Bad legislative ideas never die, they just get tucked in other bills.
So it is with a tax subsidy for the Knights and Panthers. Most sports venues in North Carolina are owned by a local government, university, or other public entity that charges something more like a market rate to the professional teams using the facility, but the Knights and Panthers own their buildings on land they have for free or nearly free from the local governments, in addition to receiving government money for construction and renovations. The teams owe an intangible tax on their leasehold interests; the market value of the rent they would otherwise pay for that land.
To give an example of the value of the leasehold, Mecklenburg County “owns the land under the [Knights’] ballpark and leases it to the Knights for $1 a year for 49 years, with two 25-year extension options.” The surrounding land is worth a bit more…
When Charlotte Center City Partners, an economic development group, first proposed the land swap, it projected the ballpark and park would bring $300 million to $400 million in new office, residential and retail development over 10 years. Now the organization estimates new development will exceed $692 million and be complete in three years.
That is bringing in more property tax revenue. Before the park and ballpark were built, the combined county tax bill for that area was $537,800, Center City said. Now, after current and announced projects are completed, the group estimates the combined bill will be nearly $7 million.