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August 2000
If we build it, will they come? A civic arena vs. a sports arena
By John Paul Galles, Tim Parolini

     While I may be a relative newcomer to Charlotte, I am certainly not a newcomer to the rhetoric involved with the proposed sports arena. And, it can’t be new to anybody who’s lived here for the last fifteen years either, when the Coliseum was subjected to similar scrutiny. We were prompted by the public debate over the proposed new Hornet arena to investigate the benefits that pro sports bring to Charlotte for an article in this issue. As it happens, Tim and I had some personal observations on the situation that were surprisingly similar, so we’ve combined them as follows.
    Unlike what you might think, listening to some the rhetoric surrounding the arena debate, the issue before the city council is not about subsidizing the wealth of George Shinn and Ray Wooldridge. It’s not about supporting the lifestyles of overpaid pro athletes who spend as much time in court as they do on the court. Nor is it about corporate bankers getting luxury boxes at the expense of Joe Six-Pack. Those who ask why we should give public money to such “scoundrels” are asking the wrong questions.
     The issue of a new publicly funded arena should be, “Are the revenues generated from all sources because of a new arena at least likely to offset the costs incurred, both public and private?” We may choose to once again pay what is necessary for the time being (i.e., making further lease concessions) to keep a professional basketball team here. This, however, merely postpones further debate over the real issue, which is ultimately an argument between hard economic evidence against public funding and unquantifiable, but significant, benefits in favor of it.
    First, the economics. The proposed funding via hotel tax, the purpose of which is to promote tourism, isn’t very convincing — tourists aren’t real big on luxury boxes. Moving the arena from Tyvola Road to Mint Street won’t attract any more tourists to Charlotte than would moving Sears from one end of SouthPark Mall to the other. The only way an arena downtown will provide an economic boost is as the catalyst for a dynamic center city district that wouldn’t otherwise exist.
     Economic impact arguments are nonsensical. An overwhelming number of independent studies consistently show that the direct economic impact of a professional sports team on a community is minimal. And since the Hornets are already here, what benefits there are will simply move a few miles northeast of where they currently accrue. Proponents who argue that the land where the current Coliseum is (which the city is still paying for) could be reverted back to the tax rolls with new office development ignore the fact that such a boon would be offset by the loss of potential tax revenue from the land under a city-owned arena downtown. It’s a wash.
     On the other hand, when you examine the big picture, the idea of building a downtown arena and keeping the Hornets in Charlotte makes some sense. The problem is that most of the benefits can’t be quantified. The biggest benefit of professional sports — and the hardest to pin down — is the energy created simply by being a “big league” city. Professional sports help separate Charlotte from other mid-size cities, as well as the “C” cities, Charleston and Charlottesville, with which Charlotte is often confused. The distinction helps attract and keep quality businesses and their employees here, and the teams are an important identifier for a city that lacks significant geographic or historical qualities.
     Pro sports are an amenity that people like to have at their disposal. The teams extend Charlotte’s reach into the rest of the world. You can’t put an accurate value on that, but it should not be underestimated. And, at the same time, no other industry has been able to create the same sense of civic pride and garner the same emotional support as professional sports.
     Surely this same “energy” could be magnified if such an arena hosted a variety of sports teams and competitions, whether hockey, tennis, NCAA activities, Olympic competitive events, or whatever. A newly built arena could accommodate the Charlotte Checkers, albeit a minor league team, for example. The Checkers currently play at Independence Arena. Considering that there is only one year remaining on their lease,that it is was built in 1955 and last renovated in 1992, and that it accommodates only 9,570, it is perplexing that Ray Wooldridge — having recently become owner of the Checkers as well — should comment that it is “not necessary” and would provide no “economic advantage” for the Checkers to play at the Hornets’ new arena…particularly since the proposed plans would accommodate a hockey team.
    A new arena could also host a rich cultural agenda of concerts and events as a more centrally located alternative to Blockbuster Pavilion and Independence Arena. Such uses would make the arena more profitable because it could not only be used throughout the year, but would also attract a variety of new and different users.
    Because economic benefits from arenas are primarily a result of pedestrian and vehicular traffic, arenas work best when situated centrally in a pedestrian-friendly environment near restaurants, bars, hotels, parks, museums, shops and other interesting places. A center city arena, particularly if planned in coordination with a new convention facility, would truly be a catalyst for much-needed urban development projects, such as department stores and movie theaters in the center city area. (Where can you see a movie, get underwear or a pair of shoes now — or even an aspirin after 7:00 p.m.?)
    Additionally, with the city and surrounding region moving inexorably towards a mass transit system that centers on downtown, it makes sense to create that “critical mass” of interests that increases the potential for ridership. (If you could hop on a train to a Panthers game this fall, wouldn’t you? Particularly if you could comfortably shop, eat, see a movie, or whatever?)
     In the end, it’s going to cost us something. Too many other cities are interested in hosting a professional basketball team, and the costs of starting up a new franchise or buying another existing one greatly exceed maintaining a current one. At a minimum, it will cost further lease concessions at the Coliseum. The question really is — do we want to build something for ourselves in the process?
     The city should contribute to the new arena because in the long run the city is better off with the Hornets than without them. The Hornets are good for business. But Charlotte can’t afford to build just a sports arena — the plans approved should contemplate other uses as well. Additionally, the plans approved should be flexible and forward-looking enough to be modified over time in response to changing needs, unlike the existing Coliseum. The city needs to have a cohesive, coordinated plan for the area surrounding the proposed site to be developed in a manner that will generate significant advantages for all of us, including tax revenues for the city. And finally, WE need to demand it.
     Seeking to expand the use and purpose of the arena, making sure it is designed for the future, and planning for it as a center city mecca will certainly further serve to substantially offset the cost of a new arena. We can leave the particulars of the financing to those who know better.

John Paul Galles is the publisher of Greater Charlotte Biz.
Tim Parolini is the editor of Greater Charlotte Biz magazine.
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