Last fall, after the referendum failed, sources say corporate leaders hired a consultant to help them design a new arena plan. For various reasons, it didn't work out. At the same time, wiser heads knew that other cities would have as tough a time raising $200 million for a new arena as Charlotte did, and that the NBA preferred that the Hornets stay in Charlotte.
The plan these past few months, then, has been to let the Hornets stew over their inability to find a home elsewhere, hoping that this would eventually force a sale to a local group of investors who've had an offer on the table for some time.
"Everyone here was letting the Hornets twist in the wind a little so the price (of buying the team) doesn't go up," said one source close to the potential deal. "The question isn't whether there are people here willing to pony up to buy the team. The question is whether (team co-owner) George Shinn will ever make a deal."
For a while, it seemed like a good strategy. Team co-owner Ray Wooldridge's January 1 deadline for deciding the team's future has come and gone as other interested cities continue to struggle to put deals together. Hope was raised among Charlotte business leaders because of the recent difficulties Shinn and Wooldridge are having with the logistics of relocating to what are essentially inferior markets in other cities. Things seemed to be going these local businessmen's way, and it seemed reasonable to expect that the team's owners would be forced to consider accepting local investors' offers.
It might have eventually worked, except for one problem. Shinn won't budge. So, says a source close to the new corporate arena deal which was thrown together quickly the only thing to do was to block his move on the chess board by making it hard for the team to relocate anywhere else. And the only way to do that was to throw up the beginnings of a doable arena deal with the understanding that the NBA probably wouldn't grant the team permission to move until all reasonable Charlotte options were exhausted.
Once a reasonable arena deal solidified, the theory goes, the Hornets would be trapped in the Queen City, and hopefully, eventually forced to sell the team, cooperate, or continue to lose money.
The plan may just work. It now appears that finding $200 million for a new arena or ways to generate enough revenue to meet the team's needs is as hard for other cities as it was for Charlotte. At deadline, Norfolk, VA sat in limbo on the naming rights deal their business leaders hoped could generate up to $60 million. Louisville, KY's city leaders got a thumbs-down from the University fo Louisville on their first proposal for an arena which the school would share with the Hornets. The school's approval is considered critical to gaining the approval of Louisville's Board of Aldermen for a deal with the team.
"The other cities aren't as bright and promising as they were, and old Charlotte is still wanting to make a deal and keep the team here," says political strategist and former city council member Stan Campbell.
The deal Bank of America CEO Ken Lewis and Wachovia CEO Ken Thompson put before council Monday night is far better than the one voters turned down last summer in which the city paid the full cost of the arena. Together, the two banks and Duke Energy would pay $50 million for the old coliseum on Tyvola Road and the old convention center, neither of which the city has current long-term plans for. In exchange for the second $50 million, the entities would market club seats and luxury suites as well as naming and beverage licensee rights. The revenues generated by these would likely be shared among a major tenant, the city and the corporate entities.
At a minimum, the main tenant would get ticket sale money.
But none of this means that we're looking at a done deal. Longtime arena deal leader Lynn Wheeler warned other council members it would be premature to express support for the plan until city staff analyzed the numbers.
"We have the ability to come up with $80 million from the hotel-motel tax, which won't cover the cost of land, infrastructure and possibly a parking deck," said Wheeler. "That presents a funding gap of at least $40 million."
Even with a ticket tax, which might generate as much as $20 million, Wheeler isn't sure where all of the money would come from.
But Wheeler is optimistic that city staff will iron out the details by February 11, when council was told by the corporate leaders to have a plan in place.
"It is unprecedented to have the CEOs of the number 1 and number 4 bank in the country to stand before the council with a proposal like that," said Wheeler. "First Union [now Wachovia] and Bank of America are noted for their competition against each other."