Last fall, residents of Charlotte, North Carolina, were in despair. The owner of the city's NBA Hornets, George Shinn, was threatening to move the franchise unless taxpayers ponied up one-third of the estimated $160 million it would cost to finance a new arena. Though the team has sold out every game in the history of the eight-year-old franchise, the Charlotte Coliseum's paucity of luxury boxes--extra-plush seating areas that rent for hundreds of thousands of dollars per season--left Shinn without the corporate revenues other teams depend upon to pay top salaries for the best players.
Now there's nothing but smiles in the Queen City. This year, the scrappy Hornets won a franchise-record 54 regular season games. And Shinn has offered to buy the coliseum, giving the team a more permanent, private home.
Built by taxpayers in the late 1980s, the 24,000-seat coliseum was one of the last major indoor sports facilities not to feature large numbers of luxury boxes. While the Charlotte Coliseum has 12 luxury boxes, newer arenas such as Chicago's United Center and Cleveland's Gund Arena have three dozen or more.
Shinn first complained about the lack of luxury boxes in 1992. At that time Don Reid, a City Council member and former head of the taxpayer group Citizens for Effective Government, proposed selling the coliseum to Shinn for about $60 million, more than the debt the city owed on the arena. Reid was treated rather rudely by the local establishment, including then-Mayor Richard Vinroot, who opposed the sale in part out of fears that the city wouldn't be able to control events in a private facility. Vinroot suggested, to the horror of fellow Charlotteans, that a private coliseum might even host a Grateful Dead concert!
By 1996, however, Reid had built a coalition of neighborhood activists, opponents of higher taxes, and even the local League of Women Voters. These groups argued that the money borrowed to finance a new facility would crowd out spending for other public services or preclude tax relief. Selling the coliseum would also save local residents $4.5 million a year in debt service. And in the interim, the Carolina Panthers, Charlotte's NFL team, had moved into the new, private Ericsson Stadium, which got less than 20 percent of its funding from taxpayers.
By late March, Shinn had abandoned his demands for a new tax-funded arena, offering to buy the coliseum for the $30 million the city still owes. As owner of the arena, Shinn could build luxury boxes and capture all the revenue. At press time the city had not yet accepted Shinn's proposal for a different reason than before: It's entertaining offers from other investors who may pay more for the coliseum and then lease it to the Hornets.