December 30, 2024 – The Center for Economic Accountability has given its “Worst Economic Development Deal of the Year Award” for 2024 to Charlotte, N.C.’s city government for its deal to spend $650 million of public funds on renovations to Bank of America Stadium.  The privately owned stadium is home to the NFL’s Carolina Panthers and MLS’s Charlotte FC.

The award, which was first handed out in 2018, recognizes a state or municipal government subsidy of a private company in the name of “job creation” and economic growth that goes further than any other that year across the nation to exemplify the wastefulness and ineffectiveness of economic development subsidy programs.

The competition for the 2024 award was fierce, with other sports stadium deals joining corporate headquarters, factories, data centers and other subsidized megaprojects across America on the list of finalists. Ultimately, Charlotte’s Bank of America Stadium deal stood out from the rest of the competition for a combination of factors that included its high cost, lack of transparency, poor returns, questionable economic justifications and the Panthers ownership’s checkered history with subsidized projects.

“This is an incredibly expensive stadium renovation project with very flimsy economic justifications, agreed to behind closed doors with a partner who deserves plenty of due diligence,” explained CEA President John C. Mozena. “Despite those issues, Charlotte’s politicians rammed it through with as little public warning or input as possible, ignoring clear public opposition to both the substance and the process of the deal. To top it all off, they’re not even getting a good football team out of it.”

High Costs

Charlotte’s taxpayers are funding $650 million of the five-year project’s $800 million price tag, with team owners Tepper Sports & Entertainment paying the remaining $150 million and covering any cost overruns.

For context, $650 million is more money than the Charlotte municipal General Fund budgets to run the city’s police department, fire department and municipal solid waste services in FY 2025. Or, alternatively, it’s equivalent to one and a third years’ worth of all city property tax revenues.

“If you asked the average Charlotte taxpayer whether they think renovating the Panthers’ stadium is as valuable to their city as a year’s worth of cops, firefighters and garbage pickups, they’d look at you like you were nuts,” said Mozena. “Same as if you’d asked them if they thought every home and business in the city should pay more than a year’s worth of property taxes for that purpose. Yes, people love sports. But not at the expense of things that truly matter.”

The high cost of the renovation project stood out when compared to the potential cost of building an entirely new stadium.

“For something like four-fifths of the cost of a new stadium, Charlotte taxpayers are getting little more from the Panthers than a promise to stick around for 15 years and the opportunity to come back to the table in 12 years to start the whole negotiation process over again,” said Mozena.

Partner Questions

This is the second time that Panthers owner David Tepper’s companies have been involved in a project that received the Worst Economic Development Deal of the Year Award. In 2019, the award went to the Panthers’ ultimately failed effort to move their team headquarters and practice facility across the state line to Rock Hill, S.C.  The project collapsed after the city government of Rock Hill was reportedly unable to secure bond financing without risking serious harm to the city’s credit rating. After construction had already started, the deal fell apart in acrimony and litigation that included a $100 million bankruptcy settlement by Tepper’s GT Real Estate Holdings.

The entire project led one formerly supportive South Carolina state senator to ask, “If David Tepper’s behavior is indicative of how the NFL does business, then who wants to do business with the NFL?”

Tepper’s history in Charlotte also includes a canceled redevelopment plan for a former mall that would have included facilities for his Charlotte FC soccer team’s youth academies. Despite $21 million in promised county and city subsidies, Tepper pulled out of the project abruptly in 2022, with one city official saying “no one at the city knows why.”

Tepper has been reported as saying “Like I said before and I’ll say it again, I’m not building a stadium alone,” adding that “The community is going to have to want it.” However, many local residents question if the Panthers under Tepper are an organization they want representing their city to the world. Since his purchase of the Panthers in 2018, Tepper has frequently been ranked among the worst owners in the NFL, if not among all of American professional sports. In 2023, he was fined $300,000 by the NFL for reportedly throwing a drink at a fan, and that same year an investigation by The Athletic found a “Hunger Games” culture in the Panthers organization, all while the team posted a string of losing seasons under six head coaches in six years.

“While David Tepper is only willing to chip in $150 million toward the $800 million price tag of his stadium renovation plans, he reportedly spent something like $70 million to buy out a pair of failed head coaches in back-to-back seasons,” said Mozena. “At some point, Charlotte taxpayers – even the suffering Panthers fans among them – need to question just what it is they’re paying for here.”

Poor Transparency

While Charlotte city government officials had reportedly been at work on the stadium subsidy agreement for almost a year, only three weeks separated the June 3 announcement of the deal at a City Council committee meeting from the final City Council vote. At that June 24 meeting, some city council members said they had not been given enough time to fully study the terms of the deal and criticized the way they felt rushed into a vote on such a large project.

The city had attempted to limit public engagement on the project to an online “public feedback form” for submitting comments until the June 24 meeting, but public pressure forced them to hold a special meeting with public comment on June 17. Charlotte Mayor Vi Lyles tried to claim that closed City Council sessions counted as “public discussion,” before admitting “I know that that’s not an open area.”

At the public meeting, it became clear why politicians had tried to limit public comment, as opponents outnumbered supporters by a reported 3-to-1 margin. This tracked with the city’s online form submissions, which reportedly came in against the deal by a 4-1 margin.

Bad Economic Justifications

The Bank of America Stadium subsidy deal was based on a commissioned analysis that predicted $22 billion in economic impact from the stadium renovations, and claimed an existing $1.1 billion in annual economic impact for the city. However, these figures fly in the face of independent economic analyses of the economic impact of stadiums in cities across the country. The evidence of real-world stadiums in action is clear that rather than generating billions in new economic impact, stadiums simply redistribute where local residents are spending their entertainment dollars. Cities that get new stadiums see little to no increase in overall economic activity, and cities that lose teams see little to no economic loss.

The deal’s supporters also attempted to argue that the public funds being used to renovate the stadium are effectively free money, as they are generated from hotel, rental car and other taxes and are limited to use “for tourism and cultural purposes, including capital improvements, repairs, and maintenance of tourism and cultural-related facilities.” However, sports stadiums have insignificant tourism impacts. Even Baltimore’s Camden Yards, which had a third of the fans at its games coming from outside the Baltimore market during the height of its popularity, only generated an estimated $3 million a year in revenues for its city.

“A dollar spent on the stadium is a dollar that could be spent on any number of other public facilities or services that are far more related to tourism,” said Mozena. “Or, it could be a dollar not collected in the first place from hotel and rental car taxes, leaving tourists with more money in their travel budgets to spend at Charlotte-area businesses.”

The tourism impact is just one of the many flaws in the argument that renovating the existing stadium would generate significantly more economic activity and revenue than the existing stadium currently produces. An analysis by journalist Neil deMause estimated that each fan at the stadium would need to spend an additional $1,100 per game to reach the project’s economic impact projections.

The Future

What is now known as Bank of America Stadium opened in 1996. This is the second time taxpayers have been asked to fund renovations to the privately owned facility, after an $87.5 round of renovations approved in 2013. But at least the region’s taxpayers can rest easy that this will be the last time they’re asked to renovate the stadium – because the deal reportedly includes a provision that the city and team will begin “good-faith negotiations” by 2037 on a subsidized replacement for the stadium to be built by 2046. A local government spokesperson explained that “the two parties would need to address” the stadium’s 50-year age at that point.

“While this certainly isn’t unique to Charlotte, the idea that sports stadiums are disposable and you need to replace them every 30 to 50 years is ridiculous,” said Mozena. “Just look around the state, where UNC’s Kenan Stadium is approaching its centennial and NC State’s Carter-Finley is almost 60 years old. In fact, more than a quarter of major-conference college football teams play in stadiums that are more than a century old. Somehow, it’s only pro sports stadiums for teams owned by billionaires that need expensive replacement every few decades.”

Previous “Worst Economic Development Deal of the Year Award” winners:

About The Center for Economic Accountability:

The Center for Economic Accountability (CEA) is a nonpartisan and independent 501(c)(3) nonprofit organization that works to advance economic opportunity for all by promoting transparency, accountability and free-market-based reform of state and local economic development initiatives across America. Headquartered in Michigan, the CEA was founded in 2018. For more information, visit https://economicaccountability.org/.

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