The city of Charlotte has "proposed making a one-time payment" of $5M to Bank of America and Wells Fargo on a construction loan for the NASCAR HOF -- but the banks "would be required to write off" the rest of a $19.1M loan, according to a front-page piece by Steve Harrison of the CHARLOTTE OBSERVER. In addition, NASCAR has "agreed as part of the plan to waive" $3.2M in past royalties it was "supposed to receive from the racing museum." The Charlotte Regional Visitors Authority, which operates the city-owned museum, "hasn’t been able to pay NASCAR any royalties on ticket sales, merchandise, and food and beverages because the hall has been losing" more than $1M a year since it opened in '10. The proposal is "part of a city plan to get out" of about $22.8M of NASCAR HOF obligations. If the deal is approved, the HOF would also be "given a break from future payments owed to NASCAR." Deputy City Manager Ron Kimble: “The whole goal is to bring the hall into a break-even position." Harrison reports the City Council will vote on the loan modifications next week, but even if the agreement is approved, the HOF is "still estimated to lose between $200,000 and $500,000 a year in the future." The HOF was "supposed to attract 400,000 visitors a year," but last year it attracted just 170,000 people. CRVA CEO Tom Murray said that he is "confident that annual financial losses can be eliminated eventually." Harrison notes the city said that the "value of sponsorships is now about $500,000 a year," though that "could decline if sponsors declined to renew their contracts" (CHARLOTTE OBSERVER, 1/6).
SEEKING FINANCIAL FLEXIBILITY: In Charlotte, Erik Spanberg reported as part of the adjusted terms, Wells Fargo and BofA would "receive five-year sponsorships" at the HOF for free. The city and banks "calculate the benefits of the sponsorships, from signs and logos inside the hall to use of the building for special events and tickets to NASCAR induction ceremonies, to be worth $250,000 per year for each bank." NASCAR "receives royalties" only after HOF revenue exceeds $10M. Those royalties "would be paid at a rate" of 3% of any sales above $10M, but as of late, annual revenue "has ranged" from $8.2-8.5M. Original terms "called for NASCAR to receive" 10% of gross ticket sales, souvenirs, sponsorships and induction ceremonies, 7.5% for catering, special events, special admissions and gift certificates and 5% of food sales. Kimble and HOF Exec Dir Winston Kelley said that corporate sponsorships "have hovered between $500,000 and $600,000 most years and have declined since the opening." in '10. Other council members "wondered about the health of NASCAR itself" beyond just the HOF (BIZJOURNALS.com, 1/5).
