With Charlotte Knights, commission makes an error

Four years ago, Mecklenburg County commissioners participated in a complex exchange of parcels and buildings with the city of Charlotte and Charlotte-Mecklenburg Schools. The big swap was largely for the benefit of a minor league baseball team – one that couldn’t fill half its stadium in South Carolina and wasn’t required to provide much assurance that it could afford a new center-city home.

But it was Charlotte, and it was early 2007, and back then we dealt in a prosperity that made risks seem hardly risky.

In the four years since, however, we’ve endured a recession and its suffocating residue. Some of our tax-supported risks have turned out worse than expected: The NASCAR Hall of Fame gets a third of its original attendance projections. The U.S. Whitewater Center makes money only if it doesn’t have to pay its debt.

As for the Class AAA Charlotte Knights – they’re no closer to getting the funds they need to build and live uptown.

So why is our county commission behaving like it’s still 2007?

Commissioners voted 7-2 Tuesday to take the next step toward extending the Knights lease agreement on an uptown plot of land for another year. The extension comes with a few new conditions – such as $100,000 in earnest money – that are designed to make the commission look tougher this time around. But it’s essentially the same deal – except better for the ballclub.
This time, commissioners decided to waive an important safeguard requiring the team to show its long-term financial viability within 10 days of signing the lease.

That clause was a part of two original agreements that gave a sweet deal to the Knights. The team got a patch of uptown land worth millions, plus some more millions worth of infrastructure work. It had “sole discretion” about any loans and financing it would use, and it didn’t have to provide details upfront about sponsorship and naming rights, which can account for up to half of a ballclub’s financing package.

That means the team got everything it needed for an uptown stadium, without having to prove it could actually build one and survive in it.

In Charlotte 2007, that wasn’t such an outrageous proposition. Uptown had decided that minor league baseball would improve its curb appeal, and when center city’s power brokers historically gave the nod to that type of venture, the money eventually followed.

The recession changed all that – not only for the Knights, but for the city. We’ve spent the past few years thinking smaller, not bigger. We’re reevaluating budget priorities. We’re looking harder at the risks we want to take with our money.

Or at least we should. But instead of requiring the Knights to provide signed agreements upfront for naming rights and two top-tier sponsorships, the county now proposes allowing the Knights to buy their way out of that mandate by paying another $100,000 to escrow. (Which might seem like a lot until you consider the team has been collecting years of parking revenue off that uptown parcel.) And instead of requiring the Knights to prove with audited financials that they could weather attendance falling short or costs swelling, the county is again leaving that requirement vague.

Commission chair Jennifer Roberts, among the seven who voted this week to move toward a final vote next month, says the lease extension is appropriate. The land won’t be used in the next year anyway, she says, so why not give the Knights another year to figure things out. If they do, it would be a good thing for uptown.

The thing is, she’s right. It’s not difficult to picture walking to a Third Ward ballpark after work, watching some quality baseball, looking out to see uptown’s skyscrapers draped over the outfield walls. But as we’ve learned, attendance isn’t always what we think it will be. Revenues fall short. Bills still have to be paid. If the Knights find uptown wasn’t their cure after all, they’ll likely come asking for public help, no matter how clearly a lease agreement says the county has put its wallet away. Will the commissioners choose a big, empty ballpark then?

Better to get assurances now, instead of getting caught up in how good uptown baseball might be, which is what the commission did this week, all over again. In 2007, that might have been the visionary thing to do. Now it’s just irresponsible.