Panthers HQ move could actually end up being a benefit for Charlotte
If the Carolina Panthers move their business operations and practice facilities to South Carolina, Charlotte might lose a little of the luster of being home to an NFL team’s headquarters. You might not spot Cam Newton on South Tryon scootering to practice anymore, either.
But from a tax revenue standpoint, building a new campus that’s separate from Bank of America Stadium wouldn’t be a huge loss for North Carolina, experts say.
Panthers owner David Tepper has said the stadium will remain uptown. Moving offices and the team’s practice facility would actually free up space inside and next to the stadium that’s ripe for new development and fresh business opportunities.
In other words, Charlotte could still benefit even if it loses the team headquarters.
South Carolina lawmakers are working aggressively to entice Tepper. On Wednesday, lawmakers filed legislation that would make the team eligible for specific incentives and tax credits.
S.C. Gov. Henry McMaster said Tepper expressed interest in moving 150 employees to a site in York or Lancaster counties, involving an “annual payroll for federal tax purposes” of about $190 million.
South Carolina wouldn’t collect all of the income tax revenue generated from that payroll, though. That’s because the salaries of employees who travel (highly paid employees like players and coaches) are taxed in the locations where games are played, thanks to a levy commonly referred to as the “jock tax.”
Players receive up to 16 checks throughout the regular season, typically one per game. For the Panthers, half of those checks would still be taxed in North Carolina, where home games would take place, and half would be in other states.
CPA Steven Goldstein of Grassi & Co. in New York, who provides tax consultation to professional athletes, said the Panthers’ move would make for an “unusual situation” from an income tax perspective since most teams practice in the same states as where they play home games. One exception is Washington’s NFL team, which plays in Maryland but practices in Virginia.
“They’re going to be earning most of their income in North Carolina,” Goldstein said of the Panthers. Some of the players’ incomes could be taxed in South Carolina, where they practice, depending on how the Panthers end up structuring the deal, he added.
But none of the games would be held in South Carolina.
Tom Regan, graduate director of the University of South Carolina’s sport and entertainment management department, said South Carolina wouldn’t benefit much from the new income tax revenue.
“In the big picture of things, it’s negligible,” Regan said.
A major source of tax revenue for the state would be the development around the new campus, which could include bars, restaurants, retail and other places for people to spend their money, Regan said.
Nabbing the headquarters of an NFL team would also be a major economic development win for South Carolina. “It’s a sexy asset,” Regan said.
The campus would likely include new development similar to what other NFL teams have gotten at their practice sites. For instance, in 2016 the Dallas Cowboys opened The Star in Frisco, a suburb 40 miles from the stadium. The Star has a $115 million team headquarters and practice facility, a 16-story Omni hotel, 20 restaurants and stores.
Landing an NFL team is also a big talking point for civic and tourism officials looking to attract other business to their region, Regan said.
“A professional football team is a big business,” S.C. House Speaker Jay Lucas said last week. “And it involves much, much more than where you play your football games.” A Panthers spokesman could not be reached for comment.
Separating administrative offices and practice facilities from the stadium could free up a lot of space for new development outside the building and other activities inside the building, The Observer has reported.
“This is a real estate play intended to generate new revenue streams,” said Regan.
The three practice fields adjacent to the stadium occupy 7 acres, roughly the size of three department stores.
That’s land in a prime location (near the future Gateway Station) that goes unused most of the year, said Marc Ganis, a Chicago-based sports business consultant who advises NFL team owners on business matters.
“There are so many better uses for property like that,” Ganis said.
Inside the stadium, removing up to 50,000 square feet of offices could make room for club lounges, retail shops, restaurants and more.
That’s what the Chicago Bulls and Blackhawks did in Chicago at the United Center a few years ago.
About 25,000 square feet of offices were removed from the arena to make way for amenities such as a club and sky lounge, according to a May 2017 Crain’s Chicago Business report. The teams’ offices are now housed in a new building adjacent to the arena’s east end.
“When a facility can be used for more, when it creates more sales activities, more sales taxes, more employment and more activity around the stadium for other events, that’s added economic value,” Ganis said.
Tepper has brought up using the Panthers stadium for non-NFL events several times since taking over as owner.
Already, a handful of non-NFL events have been scheduled inside the stadium, including the inaugural Untappd Beer Festival May 4 and a handful of international soccer matches this summer. Tepper has talked about bringing Major League Soccer to Charlotte, too.
“I want to utilize the stadium for the community because I think it is as important as being a member of the community,” Tepper said in his introductory press conference last July at the stadium.
It’s not yet clear what kind of incentives the Panthers could get from South Carolina.
In North Carolina, officials have said they’d like to see the Panthers keep the team’s whole operations here. But offering incentives could be a bit trickier.
Incentives in North Carolina are generally awarded to companies looking to expand in or relocate to the state, with the promise of adding a net number of new jobs, according to the N.C. Commerce Department’s website.
It’s unclear what could be done about awarding incentives to a company that’s already headquartered here and not planning to expand its workforce.
Commerce Sec. Anthony Copeland and his team “regularly speak with business organizations as they consider their location strategies,” according to spokesman David Rhoades.
“The Panthers are a team with a large, multistate fan base so we’re not surprised they are talking to leaders in South Carolina about a practice facility. The team and their fans are important to our economy and we look forward to continuing our discussions with the Panthers’ leadership,” Rhoades said.
At the end of the day, if the Panthers decide to open a new campus in York County or another nearby area, it’s still technically considered the Charlotte metro, noted Regan, the USC professor. New construction and more consumer spending would ultimately benefit the metro area as a whole.
“It’s not like they’re moving to Georgia,” Regan said.
Panthers owner David Tepper has mentioned the idea of using the team’s stadium for non-NFL events. “I want to utilize the stadium for the community because I think it is as important as being a member of the community,” he said at his introductory press conference in July.
From a tax revenue standpoint, the Panthers building a new campus that’s separate from Bank of America Stadium won’t be a huge loss for North Carolina, experts say.