Knights Tap Underpants Gnomes Business Plan
In their latest effort to secure a minor league baseball stadium for uptown, city staff has tossed out a major league curveball with enough taxing twists to apparently sucker a majority of city councilmembers into taking a swing at a bad pitch.
City staff claims its latest proposal strips any property tax loot from an $8 million bounty being offered to the Charlotte Knights, versus a previous deal that would have doled out $8.5 million to include a $2.5 million property tax rebate for the team and $6 million from hotel/motel tax money.
The latest scheme instead pulls $7.25 million from hotel/motel tax revenues and skims $750,000 from the uptown booster group, Charlotte Center City Partners. The knuckleball pitch conveniently ignores the fact that about 75 percent of CCCP’s budget comes from – wait for it – property taxes generated by special taxing districts.
It’s wholly fungible money, which CCCP will undoubtedly see funneled back into its coffers when some future council decides to either hike the tax that funds the uptown cheerleading outfit or use a generous portion of general property tax revenue to pay for future uptown improvements that would have otherwise been funded by CPCC’s special district tax. Bet on it.
Here’s an idea: if Center City Partners crime boss CEO Michael Smith thinks an uptown baseball stadium is such a great return on investment, let him fork over a sliver of his $300,000-a-year salary to help cover the tab, instead of milking uptown property owners for nearly $1 million.
On the other side of the ledger, city staff takes great pains to make clear that the $7.25 million yanked from hotel/motel tax revenue can’t be used for anything but tourism-related initiatives. That’s true, but only to a certain degree. The only reason the tax money can’t be used to pay for basic government expenditures – you know, silly things like roads and public safety – is because local politicians tied into the uptown lunch bunch lobbied long and hard for legislation that restricted the funds.
Revenue sources notwithstanding, the inescapable bottom line is that public subsidy will cover more than half of the stadium’s $74 million price tag if city council approves the latest pitch. That includes the $8 million being pondered by the city and $8 million already committed by Mecklenburg County, which is also tossing in a prime tract of taxpayer-purchased land worth upwards of $24 million.
More to the point, the deal would represent yet another example of politicians and government bureaucrats using taxpayer money to roll the dice on picking winners and losers, giving the inside track to favored businesses with the right connections to compete with other businesses that somehow make do without public subsidy.
The city council is slated to vote June 11 on the stadium package. If early indications from councilmembers stand pat, with a majority now favoring the largess, the Knights will soon become the latest in a long line of favored uptown interests to successfully solve the key to a business plan that gained renown in the fictional town of South Park, where the Underpants Gnomes showcased their unique brand of entrepreneurial acumen in three easy steps:
Collect underpants
??
Profit
Substitute the Knights’ grand plans for the gnomes’ underpants, replace the ?? with a fat public subsidy, profit. For everyone but the taxpayers.
The braintrust at City Hall insists that the Knights deal will be a homerun for Charlotte, with an uptown minor league stadium providing a major league boost for economic development. Why do they think this? Because alleged economist and UNCC professor John Connaughton – the same guru consultant who concocted studies that forecast huge success for the NASCAR Hall of Fame and the US National Whitewater Center, a duo of taxpayer-funded boondoggles last seen wallowing in debt and abysmal attendance – predicts huge success for an uptown stadium.
Connaughton cooked up a study that predicts the Knights would double their attendance by moving from their home in Fort Mill, S.C., to an uptown stadium, zooming from 300,000 or so fans a year to 600,000. Never mind that the Knights drew only 279,107 at the gate last year and ranked second to last in AAA attendance, where only four teams out of 30 managed to crack the 600,000 level.
Here’s Connaughton working his magic on the city council’s economic development committee during a meeting in March, massaging his attendance projections in an absolutely cringe-worthy exchange with Mayor Pro Tem Patrick Cannon:
Cannon: I am a little intrigued about the numbers in these economic times and that would lead me to ask a question. The 600,000 that you would average out that could be here in these slow growth economic times? Your number is secured around right now in today’s economy?
Connaughton: Yes, I think so.
Cannon: If that is the case then what would you project when the pastures are a little greener like five years ago?
Connaughton: I actually am seeing a greener pasture currently; I am pretty optimistic about these times. That is not to suggest that we could not get derailed. We all know there are problems, but right now, the economy couldn’t be coming along better. I think the future holds some pretty good darn years.
Cannon: You are giving us what would be considered conservative numbers?
Connaughton: I would think so; I have no guarantees. You have to understand that there are no guarantees. What we are seeing is consistently a pattern of attendance of 600,000 range and you should be able to bank on that. Now will it be 550,000; yes that is possible that we could be 10% off. More than 10% off, I doubt that would be the case.
Cannon: I just wanted to be certain. We have been down this road before and it’s best to try and get it out in the open now.
Connaughton: To be absolutely clear, these are estimates; there are no guarantees that these numbers will in fact take place. This is different than what we experienced a few minutes ago with the sports studies where those are facts; these are forecasts, these are projections, there is no doubt about it and they have a confidence level of plus or minus.
So to be clear: there “are no guarantees,” Connaughton explains, but his attendance projections are solid enough that “you should be able to bank on that.”
Wonderful. And what happens if the “confidence level” dips below the projected high water mark of 600,000 fans and leaves the Knights floundering in a brand new taxpayer-subsidized uptown stadium? How soon until the team comes rounding the bases looking for another taxpayer handout?
Nobody has a definitive answer for that, but you can probably guess how it would unfold:
Play ball.
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