If city spends millions on tennis, is there enough left for Panthers stadium upgrades?

Charlotte collects tens of millions of dollars in taxes every year for big projects like Bank of America Stadium renovations, but extra space in that budget is dwindling.

The Charlotte City Council on Monday approved spending $65 million to help entice the Western and Southern Open, a top-tier tennis tournament, to move to Charlotte and to build a massive stadium complex near the Catawba River. The same night, the council reserved $20 million for a development at the site of the former Eastland Mall.

Revenue for the tennis and Eastland projects will both come from the 1% countywide food and beverage tax — one of the taxes local legislators are pushing to extend and a lever officials already used to pay for projects such as Spectrum Center renovations. Both decisions received unanimous approval.

But the taxes expire in the 2030s, and unless the countywide 1% food and beverage and 2% hotel room taxes are extended to 2060, Charlotte could have a tough time paying for everything on its wish list, says Councilman Tariq Bokhari. That’s especially true when factoring in discussions about renovations to Bank of America Stadium, where the Carolina Panthers and Charlotte FC play.

Over the past five years, those so-called “prepared food” and hotel taxes have generated an average of $48.46 million annually for Mecklenburg County, according to data from the local tourism alliance. This average for both taxes combined is deflated thanks to lower revenue during the pandemic.

In fiscal year 2022, the two taxes brought in a combined $58.2 million for Mecklenburg, a sign Charlotte’s tourism economy was bouncing back.

If 2022 numbers persist, the tax on the sales of meals from restaurants could generate $340.8 million before it sunsets in 2031. The hotel occupancy tax expires in 2038 and could generate $234 million over the next 15 years, if it brings in the same amount of revenue as 2022.

Together, these revenues are just short of the $600 million that could be requested for Panthers stadium renovations, unless the sunset is extended. Subtracting the $85 million allocated by council members Monday, that budget gets even tighter.

“Under the current ‘affordability’ of the tax, there isn’t enough for all three,” Bokhari said. “In fact, there isn’t enough for the Panthers by itself.”

The city has not made any negotiations with the Panthers public.

But, “there’s one thing between what we ‘can’ afford in the tax and what we should fund,” said Bokhari, who emphasized a need for the hospitality industry to be included in city funding decisions.

Western and Southern Open

The Western and Southern Open is currently hosted near Cincinnati — in Mason, Ohio. Officials there hope to fund a $150 million project to keep the tournament and expand facilities. But its owner is South Carolina company Beemok Capital, led by businessman and philanthropist Ben Navarro, who unsuccessfully bid on the Carolina Panthers in 2018.

The Cincinnati Enquirer reported last month about widespread speculation the tournament will move to Charlotte. But no decision has been made. Charlotte leaders are working to meet a goal of having the 2026 tournament played here, said Councilman Malcolm Graham.

The city of Charlotte’s $65 million would be part of the total cost of up to $400 million. Beemok expects to receive financial support from the state and county, too.

“We’re creating jobs for people in this community that need those jobs and will have a place to live and will have the opportunity to participate in our economy,” Mayor Vi Lyles said Monday.

Mayor Pro Tem Braxton Winston says that the W&S Open project is exactly the kind of project the restaurant tax money should cover.

“This is what the hospitality tax buckets were created for, right,” Winston said Monday. “How do we invest in ways that brings more revenue that refills those buckets, provides more opportunities to the community and really serves as a catalyst for job growth.”

If moved to Charlotte, the W&S Open will be played in a tennis complex with multiple courts that seat up to 14,000 people. The facility will have outdoor and indoor tennis and pickleball courts in an area being branded the River District.

Eastland Yards

The city is considering two development options for Eastland Yards: a gaming, athletic and concert venue or an indoor sports facility with space for basketball, pickleball, soccer and volleyball.

It won’t be a sports venue holding thousands like the Western and Southern Open, but a future development could bring a place for the community to gather and play sports, Charlotte leaders say.

“This won’t be lost, I know we’re doing something amazing tonight, to make sure that we can protect the funds that would belong to the potential project for East Charlotte,” Majorie Molina said when discussing the Eastland project.

Early feedback from east Charlotte neighborhood groups show support for the indoor sports facility, CharlotteEAST Chair Greg Asciutto told The Charlotte Observer. Residents are mostly concerned about noise from music festivals on the site with the proposed joint athletic and concert venue.

The site being examined now includes 29 acres owned by the city off of Central Avenue. Tuesday’s resolution calls for $20 million to be reserved from the city’s tourism sales tax in addition to the $30 million already designated from a previous public-private partnership.

Developer Corsland Southeast has broken ground on dozens of homes and apartments on the other side of the Eastland property as part of a public-private partnership with the city. Plans for the area also include a Mecklenburg County-run park which could include an ice rink.

What’s needed for Panthers stadium?

City officials talked in a private Jan. 31 meeting about a total $1.2 billion project for Bank of America stadium improvements using $600 million in public money, the Observer’s news partner WSOC reported last month.

A bill sponsored by state Rep. John Bradford, a north Mecklenburg Republican, would extend the 1% food and beverage tax and a 2% hotel occupancy tax to 2060.

The food and beverage tax — which is expected to generate nearly $47 million next year — was enacted to fund the Charlotte Convention Center. By law, it sunsets in either 2031 or when the final debt payment is made on the building.

Revenue on the 2% hotel and motel room tax is paying off debt on the NASCAR Hall of Fame, which opened in 2010. It generated $66.7 million total in the last five years, data provided by Greater Charlotte Hospitality and Tourism Alliance President Mohammad Jenatian show, and is set to sunset in 2038.

The bill hasn’t passed the N.C. House, where it’s been stuck in the Rules committee since May 2.

“My major focus is the prepared food tax extension with it having a closer expiration date,” Bradford told the Observer Tuesday. “We are still in session and I am working to move a few of my bills - including this one.”

Mayor Lyles at a business lunch last week suggested this existing funding structure, if extended, could be used toward stadium renovations. Lyles said Wednesday she has no “threshold” for what the public funding amount should be, but that the city will continue to invest in sports.

Intern Terry Benjamin contributed to this report.