Expanding the tourism tax in Mecklenburg County will help keep professional sports teams in the Queen City, the leader of the Charlotte Tourism Alliance says.
Greater Charlotte Hospitality and Tourism Alliance President Mohammad Jennatian and other tourism leaders are lobbying on behalf of the city for NC House Bill 408, which would eliminate sunsets on two taxes that have brought nearly $250 million in tax revenue to Charlotte over the past five years. sports and events.
The state-sponsored bill Congressman John Bradford, Republican of North Mecklenburg, proposes extending the 1 percent food and beverage tax and the 2 percent hotel occupancy tax through 2060. The state allows Charlotte to borrow against the tax for up to 30 years. Officials have used this tactic to build the Convention Center and the NASCAR Hall of Fame, and have eyed Bank of America Stadium as a potential future use.
“Leaders in the hospitality industry came to me with the need to expand the financial tools that have created tremendous growth throughout the Charlotte region and allow our hoteliers, restaurateurs and businesses in the region to continue their success,” Bradford told The Charlotte Observer.
Spectrum Center and Bank of America Stadium
Charlotte was vulnerable to losing the Hornets until the City Council approved a lease extension for the Hornets through 2022, Jenatian said. Both Las Vegas and Seattle would “give anything to get an NBA team,” he said.
Seattle was the longtime home of the NBA’s SuperSonics, who moved to Oklahoma City in the late 2000s, and the city is hoping to get the team back. Las Vegas does not have an NBA team, but is part of the league’s expansion talks.
The Charlotte City Council voted to allocate $215 million in tourism tax revenue last year in a deal extending the Hornets’ lease at the Spectrum Center through 2045, renovating the arena and building an uptown practice facility.
“We don’t want to get to a point where we’re worried we’re going to lose something,” Jenatian said.
Now Jenatian said there is a consensus in the travel industry. Charlotte must be proactive to keep the Panthers at Queen’s. Eliminating the tax sunset would generate revenue for something he says is a necessity: renovating the 27-year-old Bank of America Stadium before 2060. The city’s Major League Soccer team also plays at the stadium.
“The question is how do we improve an asset to generate more revenue, more tourism for our communities,” he said.
A Hornets spokesman declined to comment on the bill. A Carolina Panthers spokesman referred a reporter to City Hall.
“One in nine people in our community work in the hospitality and tourism industry, and the Panthers and Charlotte FC are an important part of that industry,” Mayor Vi Lyles said in a statement. “It’s also important to have venues for games, concerts and other events that create a vibrant city that grows and provides services to our residents.”
The last NFL team to move cities was the Raiders franchise, which moved from Oakland to Las Vegas in 2020. A few years before that, Los Angeles acquired the Chargers and Rams from San Diego and St. Louis, respectively.
Newly renovated Bank of America Stadium?
The food and beverage tax, expected to generate nearly $47 million next year, was introduced to fund the Charlotte Convention Center. By law, it disappears either in 2031 or when the final payment on the building’s debt is made.
In the past decade, the legislature changed the tax to allow the proceeds to also be used for amateur sports and a football-sized stadium. The city used that money to pay $75 million in improvements to Bank of America Stadium, including soccer-friendly improvements when Charlotte FC debuted its inaugural season last year.
But there is more work to do, Jenatian said.
“Our beautiful brand new stadium is old by the standards people put there,” he said. “People need to understand that these facilities need to be updated.”
He expects the Spectrum Center renovations to lead to another NBA All-Star Game coming to Charlotte, and wants to see Bank of America Stadium lead to similar events.
“I absolutely want to have an NFL draft here. I absolutely want us to have an all-star event (from Major League Soccer),” Jenatian said. “I would absolutely love to one day be able to have a Super Bowl in Charlotte. The global exposure that many of these events put on us, you can appreciate that.”
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House Bill 408 details
The extension of the 1 percent food and beverage tax and the 2 percent hotel occupancy tax through 2060 were added to House Bill 408 last week, which originally included only the creation of a special Charlotte FC license plate for use in North Carolina. It has generated $175.6 million since the 2018-2019 fiscal year, according to Jenatian.
Revenue from a 2 percent hotel and motel room tax pays off the debt on the NASCAR Hall of Fame, which opened in 2010. It has generated $66.7 million over the past five years, data provided by Jenatian show.
HB 408 is currently sitting in the House Rules Committee after being amended and still has a chance to become law this legislative session. The bill is not subject to the legislative deadline — when some bills must pass either the House or the Senate to have a chance at becoming law.
Among the sponsors of the bipartisan bill are Democrats Mary Belk, Terry Brown Jr., Carolyn Logan and Becky Carney, and Republicans Chris Humphrey and Jason Sain.
The travel industry is taking the lead in lobbying
The task of lobbying has fallen to the tourism industry, not the city government, Jenatian said. Instead, Charlotte city leaders are focusing on another tax proposal.
“We would love for them to take the ball and run with it, but as you know,” Jenatian began, “they’ve decided they want to focus on just one thing and that thing is the transit fee. And so they didn’t want to do anything else. Many of us could not sit and wait another two years.”
But the council is already talking about potential renewal options.
In closed session on Jan. 31, the City Council discussed a potential framework for a $1.2 billion project with $600 million in public funds, Observer news partner WSOC reported last week. Tthe city has not begun formal negotiations, but also met in closed session on Feb. 27 to discuss the possibility of expanding the city’s tourism tax, WSOC reported.
The tourist tax extension has not been publicly discussed by the Charlotte City Council. Mecklenburg Commissioner Susan Rodriguez-McDowell told WFAE she’s surprised the city isn’t talking about the proposal because county residents pay the tax.
Lyles called it “unfortunate” when a closed-door conversation became public, but said he would not confirm whether the news was true.
“Without confirming any information, I will say that it is unfortunate that the discussions that take place in closed session are being shared publicly because it undermines our ability to deliver the best deal for our community.” It is important to keep every business in our city,” Mayor Lyles said in a statement when asked about the closed session.