(The Center Square) — For the third time in seven years, the Michigan-based Center for Economic Accountability has awarded a project in North Carolina the Worst Economic Development Deal of the Year.
Charlotte City Council is in agreement to spend $650 million of public funds on the $1.3 billion renovation project of a stadium owned by David Tepper, the 92nd richest person on the planet at $21.3 billion net worth, according to Forbes. He owns the NFL Carolina Panthers, Major League Soccer’s Charlotte FC and Tepper Sports & Entertainment among many in his stable of enterprises anchored by global hedge fund Appaloose Management.
The Center for Economic Accountability, in a release, said the project eclipsed other subsidized megaprojects because of 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,” John Mozena, president of the organization, said. “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.”
In 2019, Tepper sought a deal with Rock Hill, S.C., that would move the team offices and practice field facility out of Charlotte. That move turned into litigation filed by each party – Tepper’s real estate company, the city of Rock Hill, and York County – and bankruptcy declaration by GT Real Estate.
A $100 million settlement ended the litigation. Tepper two years ago pulled out of a mall redevelopment plan for his soccer team’s youth academies despite $21 million in county and city subsidies, the Center for Economic Accountability said.
Tepper bought the Panthers from original owner and founder Jerry Richardson in May 2018 for $2.2 billion. According to Sportico, the NFL’s national media rights, league sponsorships and shared revenue and royalties from the league’s affiliates and subsidiaries – distributed evenly to all 32 teams each year – has brought the Panthers $274 million, $296 million, $309 million, $347 million, $374 million and $404 million the last six years, respectively.
Forbes, in an analysis published Aug. 29, ranked the Panthers No. 27 in value at $4.5 billion with operating income of $109 million.
According to a city release, taxpayer money will be used for facility improvements and modernization between 2025 and 2029, and the funds are capped at $650 million. The Tepper Sports Entertainment share of investment of $688 million includes $150 million in facility improvements and modernization plus cost overruns between 2025 and 2029; an estimated $421 million in capital improvements, operations and maintenance through 2045; and $117 million in facility improvements already having been done between 2018 and 2024.
Tepper did as many pro sports owners do, dangling a potential relocation for leverage. The deal includes a 20-year stay for the Panthers and his pro soccer team in Charlotte.
“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 fiscal year 2025,” Mozena said. “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 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.”
The deal was announced on June 3 and voted upon June 24. Public pressure forced a public comment meeting June 17. Comments were 3 to 1 against the deal, and online form submissions were 4 to 1 against.
The Center for Economic Accountability notes “partner questions” in the city doing business with Tepper. In addition to the failed deals in Mecklenburg and York counties of the two Carolinas, he drew a $300,000 fine from the NFL for throwing a drink at a fan after a loss at Jacksonville on Dec. 31, 2023.
“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,” Mozena added. “At some point, Charlotte taxpayers – even the suffering Panthers fans among them – need to question just what it is they’re paying for here.”
The Panthers won seven games in their first season, needed one win to make the Super Bowl in their second, and have been Super Bowl runner-up twice since. The years prior to Tepper include two NFC crowns, six division titles, eight playoff berths total, and 13 times first or second in the division.
With Tepper, the record is 35-80, last in the division this year with a game to go and three other years, and no winning seasons and none with more than seven wins. Late-season is considered the time to beat division rivals and secure the postseason, and the Panthers under Tepper have an after-Halloween record of 15-46 including 10-21 at home, 6-17 against the division, and losing streaks of six or more games starting after Oct. 31 in four of six seasons.
Tepper this year has his seventh head coach in seven seasons.
Bank of America Stadium opened in 1996 as Ericsson Stadium, a Swedish company making a $25 million investment for a 10-year agreement. Bank of America has held naming rights since 2004, a $140 million purchase for 20 to 25 years.
The $500 million construction costs of the stadium prior to its 1996 opening were covered by presale of 128 suites; 62,000 permanent seat licenses at $600 to $5,400 each; and Richardson covering the balance of about $65 million.
In addition to Tepper’s link to winning this award previously, a subsidy to an Apple campus in the Research Triangle Park secured the 2021 award for a North Carolina company.
Vehicle industry projects were award-winners in 2023 (Michigan, Ford/CATL), 2022 (Georgia, Rivian) and 2020 (Ohio, General Motors/LG Chem).
The Center for Economic Accountability bills itself as a nonpartisan nonprofit “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.”
