The Charlotte city council is preparing to vote on $275 million in spending to upgrade the Hornets‘ arena — which is less than 17 years old, cost $260 million total to build in the first place, and already received $24 million in taxpayer-funded renovations a few years ago, if you’re scoring at home — and build the team a new practice facility. But, the Charlotte Business Journal reassures us, most of this is “necessary” thanks to the dead hand of Charlotte officials who negotiated one of those dread state-of-the-art clauses to insure that the public would be on the hook for an unending stream of anything other NBA teams could extract from their cities first:
Terms of the existing lease call for periodic city-funded renovations to keep the arena up to date with peer NBA venues. That’s based on having features included in 50% of rival teams’ arenas. The city’s lease with the Hornets ends in 2030.
The state-of-the-art upgrades, calculated lord knows how, are estimated by the city to amount to $173 million. The rest of the money will go toward an additional $42 million in upgrades plus $60 million to build a new practice facility across the street. In exchange for the added funds, the Hornets will agree to a lease extension through 2045, during which time the team will start paying rent — that’s right, the team got a $260 million arena in 2005 and hasn’t even had to pay rent on it — amounting to $32 million, plus $20 million in maintenance expenses, though the CBJ doesn’t indicate whether this is present value or whatever pittance dollars are still worth in the 2040s.
I know what you’re asking — or, at least, I know what I’m asking: Does the lease extension include 15 more years of this horrible state-of-the-art clause, requiring future Charlotte city councils to pay for nanobot charging stations or what have you? Despite expending more than 2,000 words on this, including quoting Hornets president Fred Whitfield calling city economic development chief Tracy Dodson ” a visionary,” the CBJ doesn’t bother to answer this, and neither does the crappy slideshow that is all the Charlotte council included in its meeting documents. So we’ll just have to wait and see if the 2022 council follows the lead of its predecessors and issues another blank check to the current billionaire Hornets owner, who happens to be this guy.
I agree that state of the art or “top quartile of all current facilities in the league” clauses are stupid.
However, they are just like any other clause in any other lease, which means they can be negotiated away or just defaulted on in the event that they prove too costly.
Maybe $24-25m for upgrades (a practice facility? Less so…) is acceptable on a decade or two old arena. Or maybe not. But I don’t see how spending more than the arena originally cost to upgrade it to extend the lease (of a non paying tenant…) by 15 years is anything but a giveaway.
Why not violate the lease? It makes MJ’s team portable almost immediately… but it saves you $275m+, and means you can actually host other events that generate revenue in the arena instead of a moribund and non rent paying basketball team owned by a guy who bets tens of thousands of dollars on a single putt and then demands that bank tellers, shop clerks and restaurant workers pay more in taxes to fund his basketball arena improvements.
Shouldn’t Charlotte be saving its taxpayer pennies to hand over to David Tepper anyway???
After reading Field of Schemes for years it appears a primary function of local governments is to give money to the ultrawealthy in reverse robinhood schemes.
Sports team owners are like lords stealing from peasants.
We’ll get to see tonight if Tempe is the latest city to approve whatever boondoggle the Coyotes are proposing. How Tempe can even consider their plan after walking out on Glendale after only 19 years along with feeling they’re above paying taxes is infuriating.