Jun 9, 2024 - Money

Why Charlotte won't use tourism funds for housing or transit

bank of america stadium charlotte

Bank of America Stadium's renovation. Rendering: Courtesy of Tepper Sports & Entertainment

Whenever Charlotte officials share plans to use hospitality funds to support work on professional sports facilities, the public almost always asks: Why not use those funds for needed areas such as housing or transit?

Context: Last week, the city said it was considering offering $650 million in taxpayer money to fund an $800 million overhaul of Bank of America Stadium.

  • The funds would come from Charlotte's hospitality and tourism tax, which by state law must be used on projects that generate tourism dollars.

Why it matters: In a city where economic inequality is so stark that the local school district is considering building affordable housing for teachers, some object to using public money to fund a billionaire's project.

  • Former Charlotte Mayor Jennifer Roberts suggested on X that local officials should repurpose tourism tax revenue for other pressing needs, like paying teachers more.

Zoom out: Most states stipulate that local tourism funds must be dedicated to projects that draw visitors, such as convention centers. The idea is that they're taxing tourists and not residents for big new projects, says Eric Heberlig, a political science professor at UNC Charlotte.

  • The county imposes a 1% tax on restaurant and bar tabs and a 2% tax on hotel rooms. Those taxes brought in more than $50 million in 2022, the Observer noted.
  • Any local municipality would need permission from the state to use its tourism dollars for anything other than hospitality purposes, Heberlig notes.
  • That's unlikely to happen in a state like North Carolina, where the state government has "really pulled back powers from local governments," Heberlig adds.

Flashback: Charlotte leaders briefly floated the idea of considering using tourism dollars on transit projects earlier this year — only to be met with fierce and fast opposition from the tourism industry.

What they're saying: Heberlig is skeptical that professional sports arenas draw visitors into town (and to its hotels and restaurants) the way a big business convention would.

  • "The underlying argument is that sports teams are bringing in tourism money to the local economy," Heberlig says. "[But] the money they're drawing is mostly recirculating throughout the metro economy."

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