Panthers HQ move could ac­tu­ally end up be­ing a ben­e­fit for Char­lotte

The Charlotte Observer (Sunday) - - Insight - BY KATHER­INE PERALTA kper­[email protected]­lot­teob­server.com

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.

NEW DE­VEL­OP­MENT

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.

IN­CEN­TIVES

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.

DAVID T. FOS­TER III TNS

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.

JEFF SINER [email protected]­lot­teob­server.com

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.

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