'Missed The Mark’ On NASCAR HOF Projections,
Sun October 17, 2010
'Missed The Mark’ On NASCAR HOF Projections, CRVA Leader says
The NASCAR Hall of Fame is off to a poor start.
It opened to much fanfare in May, but attendance and revenue is less than half what boosters projected. There's already talk of layoffs.
The Hall cost $195 million dollars to build. It's mostly financed by a 2 percent hike in the hotel/motel tax and managed by the Charlotte Regional Visitors Authority. It's CEO, Tim Newman, tells WFAE's Scott Graf there was "deal excitement" when it made those optimistic projections.
Scott Graf: The prediction was up, if I understand correctly, up to 800,000 visitors in the first year. And It looks like maybe that actual attendance maybe even as low possibly as a quarter or even a third of that. Who made that estimate of 800,000?
Tim Newman: I'm so glad you asked that question. If you'll recall, the competition for the Hall of Fame was a very public competition that involved Charlotte, Atlanta, Daytona Beach, Kansas and the Kansas City area, and Richmond. We had a wide variety of folks who advised us that a good first year number would be 800,000. As we got into budgeting for the year that we are now in, the economy certainly had drastically changed, and we simply missed the mark on those assumptions. And I think we had what you might call "deal excitement" at the time, when we were publicly vying for the Hall of Fame. And what we're doing now is dealing with the reality.
Scott: The projections, up to 800,000 visitors in this first year, are those now fueling a perception, and maybe having you, to some degree, having you play defense on this, that the Hall of Fame in the first five months have in some ways been a failure so far?
Tim: You know, here's what I would say to that. Number 1: we were wrong on the assumptions. And I will always take responsibility when we're wrong on something like this as I've tried to do, publicly with our board of directors, with all of the stakeholders.
If the numbers on attendance were necessary to pay for the building, we would have a real problem on our hands. But they're not. The building is paid for with the hospitality taxes that I mentioned, and non-recourse financing backed by sponsorship sales and land provided by Wachovia-Wells Fargo and Bank of America.
Scott: How have sponsorship dollars matched expectations and projections?
Tim: Also not as good as we had hoped. And I think the fact of the matter there is you have seen a whole change in the way sports sponsorship works. When we were working on trying to get the Hall of Fame in 2005 and 2006, who in the world knew? If you had predicted it, you wouldn't be here and I wouldn't be talking to you today. I mean the events that happened in 2008 into 2009 were unlike anything any of us could have ever foreseen.
Scott: That change in sports marketing that you mentioned, does that present long-term problems for the Hall of Fame?
Tim: I think that we will figure out what the good sponsorship fits are, and if we have issues related to the numbers on the sponsorships, we will work with our partners at the banks related to when we can repay those loans and how we can repay those loans, so I think we can solve it over time.
Scott: If the numbers that we've seen over the last five months had been the numbers that were actually projected when Charlotte was bidding on this, would NASCAR have picked Charlotte for the Hall of Fame? And would you have even pursued this project in Charlotte?
Tim: I think that NASCAR would have picked Charlotte for two reasons, and we definitely would have pursued it. The reasons NASCAR would have picked us is:
One, we had a very sound financial plan for the building. And that is something that Nascar was most interested in.
Two, it gives them an opportunity to consolidate all of their operations that were in five or six different locations in this region into the NASCAR Plaza, which is the office tower that is part of the project. Why would we have pursued it? The fact of the matter is, there are some 20,000 to 25,000 jobs in this region according to UNC Charlotte Economic Impact Study that was done in 2005, I believe. Those jobs and all those NASCAR teams could very easily load up the haulers on Monday morning and move the entire industry to somewhere else. We wanted to cement NASCAR as an industry here in this region, and the Hall of Fame is one of the things that helps us cement Nascar in this region.