Recall that the secret NASCAR welfare payment now under discussion started with the new convention center in 1995, the convention center that still sucks in a $11 million operating subsidy from the city each year.
The convention center’s construction was quickly followed by the push to get a new hotel to make the convention center attractive to actual conventions. In 2003 and $16 million in city dollars later, that push became the $143 million Westin, whose 45,000 square feet of meeting space compete with said convention center. Oops.
Worse, the city upfront money along with a 20-year $2.5 million per year tax credit nuked the city hotel-motel tax money, leaving no money to dole out to conventions who would use the convention center. The city did get a guarantee, though, that the Westin would set aside room blocks for any conventioneers who might appear. This is why the city is so gung-ho to hike the hotel-motel tax from 6 to 8 percent — for any reason whatsoever. If a NASCAR building is attached to the hike, all the better. The status quo, the original bad deal, cannot sustain itself.
Again we turn to the work of Jim Hobbs of the North Carolina Hotel and Lodging Association:
His data, which he noted was taken from Charlotte’s records, indicates that the revenues from the hotel tax, the prepared food and beverage tax and the car rental tax are about $12.9 million per year short of what is needed to cover the debt service on the convention center, the arena, the Westin Hotel subsidies, the CRVA budget and the sums to be distributed to the other Mecklenburg municipalities, etc. This despite the claim by Charlotte leaders that no subsidy of these projects from other Charlotte funds will ever be necessary. Jim then reported that the hotel organizations had voted to oppose the tax increase, because it violates the long-standing 6% cap on occupancy taxes, and because of the way Charlotte has managed existing occupancy taxes.
That last bit is a reference to the fact that $3.5 million in annual hotel-motel tax revenue helps pay for the $265 million Uptown arena, which was built to improve Charlotte’s struggling travel and tourism industry, or so city leaders told us in 2002.
And do not forget that the convention center’s supposed needs also helped drive the $40 million toy trolley line and a goodly chunk of the $450 million Mumford-McCrory light rail line which, some $14 million in city general fund money later, will run through the middle of the — convention center.
Now comes the $122.5 million (and counting) in public money to essentially expand the convention center and call that new part the NASCAR Hall of Fame, so long as our checks to the France family do not bounce.
Let’s be honest here. The revenue from the hotel-motel tax is already under strain. Likewise projections for the number of people who are going to attend the Hall and pay the combined 15.5 percent tax on Charlotte hotel rooms will be under pressure to be as optimistic as possible to make the numbers work, if and when the fine print of the deal with NASCAR becomes public.
So not only on corporate welfare grounds is the Hall a horrible idea, just in terms of a workable fiscal package it makes no sense. At all.
We’re dead, of course.
