Tue May 7, 2013
Panthers Get Special Access To Closed Council Meetings
Most of the Charlotte City Council's debate and deliberations about spending tax dollars on a renovation of Panthers' Stadium happened behind closed doors. That's pretty common when a city is hashing out economic incentives. But this case stands out because the Panthers were given unprecedented access to the council's process.
When the city council closes its doors to discuss an economic incentives deal, "anyone, outside of council and staff present at a closed session, is unusual," says Councilman Warren Cooksey.
On very rare occasions someone from the Chamber of Commerce is allowed to sit in for a bit and make the company's case.
But generally "closed" means "closed," because the council needs privacy to work out its negotiating strategy and terms, says City Attorney Bob Hagemann, because "you do not want to have those kinds of conversations in front of the other party to the negotiation."
You certainly wouldn't want to have them in front of the company's CEO. . . right?
But that's exactly what the city did with Panthers owner Jerry Richardson. He sat in on two of the four closed sessions council held to discuss using tax dollars for Panthers' stadium renovations. Minutes from those meetings show council members were fine with the arrangement. They still are.
"I don't know if it was appropriate or not, but it was important to him," says Councilman Andy Dulin. "It must have been of importance because he did show up – you know that put an exclamation point on the seriousness of the negotiations that some might not have done. I appreciated him being there."
Councilman James Mitchell also appreciated Richardson coming and asking directly for the money: "I think that's what Jerry wanted. I think Jerry wanted the council to know why he was doing this."
But by the time the council invited the Panthers into their closed session on January 14, they already knew Richardson's story because they'd met with him one-on-one at Bank of America Stadium just before Christmas.
What council members didn't yet know was the exact framework of the deal city attorney Hagemann and deputy city manager Ron Kimble had worked out: Taxpayers would cover half of the $250 million stadium renovation plan in exchange for a promise the Panthers would stay in Charlotte at least ten years.
Hagemann says "a major reason why this was done in closed session" was that "the council had not been privy to where we were in negotiations and we needed to take their temperature and get direction from them."
TAKING THE COUNCIL'S TEMPERATURE
Panthers owner Jerry Richardson got to take the council's temperature, too.
He saw their reaction when Hagemann and Kimble warned that the Panthers were "ripe for courting" and Los Angeles was lurking to nab a team. He heard council members explore various taxes they could tap to fund the stadium and wonder if they could tie the team to Charlotte for more than ten years.
Then Richardson stood to remind the council how he'd "gone to bat for the city" by getting the NFL to change its opening day for the Democratic National Convention. And he shared a not-so-subtle story about how he quit the NFL after his third year playing because they offered him $250 short of the $10,000 contract he thought he was worth.
Clearly Richardson is not afraid to walk away when he doesn't get what he wants. And this is the man the council invites into its closed strategy session?
Hagemann and Kimble say Richardson was only there to answer questions and that he was dismissed halfway through the meeting. The minutes show council members were quite a bit more frank from that point on about their concerns with the deal and how it might be received by lawmakers and the public.
If having Richardson in the room was a risky move, Hagemann says it worked out in the city's favor: "All you have to do is look what happened to the deal structure from that meeting to February the eighth."
Namely, the Panthers agreed to stay for 15 years instead of just ten. That's the deal the city council had on the table a month later when it met in closed session February 8. The council was still hoping at that point to get legislative approval for an increase in the prepared food tax to pay for stadium renovations - and possibly build a new stadium down the road.
While the media waited outside the closed meeting, Richardson and his Panthers team were, once again, invited in. This time, though, there was some pushback.
TIME TO GO PUBLIC?
Councilman Michael Barnes felt it was time the Panthers make their request directly to taxpayers, just like the Charlotte Knights baseball team had done.
"I thought Jerry Richardson had a very good personal story to tell about what he was trying to do with the team and where he was trying to place the team long-term, so I wanted that to be much more public than it was, and I still think that we should have made more of it public," says Barnes.
Immediately after that February 8 meeting, the city did make the details of the deal public.
But a month later, the council would be back in closed session lamenting the refusal of state lawmakers to go along with the plan. The Panthers were not in that meeting.
Afterward, Hagemann and Kimble went back to the team and worked out a much smaller deal: $87 million of existing tax revenues in exchange for a six year tether. This time, council members heard details of the plan in public and voted for it unanimously on April 22.
Looking back, Councilman Barnes says those closed meetings with the Panthers were not ideal.
"I think it hurt the transparency piece from a public perspective and public confidence, but I don't think it hurt the negotiation," says Barnes.
Still, might the outcome have been better had the city stuck with precedent and kept Richardson out of its closed meetings?
CAREFUL WHAT YOU SHARE
Negotiating expert Gary Kohut – who heads UNC Charlotte's MBA program – says the best deals are built on trust and sharing information: "But only the information the other party needs to know. We need to be extremely careful as to what information we do share."
While council shared much of its strategy and financial capacity with the Panthers, Richardson never did open his books to the city.
And the truth is, Charlotte was never in the driver's seat.
AN INEVITABLE DEAL
It was the city that first broached the possibility of paying for stadium renovations when Mayor Anthony Foxx sent Richardson a letter to that effect on September 28. Kohut says instigating a negotiation generally puts you at a disadvantage.
But City Attorney Bob Hagemann argues there was no advantage to be had: A negotiation with the Panthers was inevitable.
Hagemann "The reality is, if you want an NFL team in the year 2013, you're going to have to have public participation. It's just the reality of the situation."
And Hagemann notes most other cities are spending far more to keep their teams happy. Charlotte's into the Panthers for $87.5 million, but Atlanta taxpayers are on the hook for more than $200 million to build the Falcons a new stadium.
CLOSED MEETING MATERIALS
The city has posted minutes from the Panthers stadium closed minutes, as well as related correspondence here. (See right-hand column.)