Regional Report Charlotte July 2010
Perhaps they did the victory lap too soon. In 2006, city leaders celebrated when Charlotte won its bid to become the home of the NASCAR Hall of Fame, predicting 800,000 visitors in its first year, 400,000 a year thereafter and a $60 million annual boost to the local economy. Its success was so assured, they said, there would be no problem paying back the $200 million it cost.
Now that the hall is open, its supporters are still predicting great things, but the numbers so far don’t back them up. Just 10,000 visited in the hall’s first week, despite a deluge of 70,000 tourists in town to attend events that included the National Rifle Association’s annual convention — few things are more compatible than NASCAR stickers and a gun rack on a pickup truck — and a swim meet featuring record-breaking Olympic gold medalist Michael Phelps. By the end of its first month, which included local NASCAR races, it was on track for just 520,000 visitors in its first 12 months.
Chalk it up to bad timing, says Craig Depken, a professor of sports economics at UNC Charlotte. When the hall was being planned and numbers predicted back in 2006, the economy was in great shape and spending on NASCAR and its products was increasing. “No one could have predicted the recession that was to come. All the predictions [about the project] were built on a set of assumptions that aren’t true anymore.”
The sour economy also has hurt the hall’s ability to get corporate sponsorships. Though much of the project is being paid for by a 2% hotel and motel occupancy tax, the city also took out $46 million in loans — about $26.5 million of which it plans to pay back by selling sponsorships and personalized bricks for the plaza by the main entrance. Hall organizers had hoped for $10 million in sponsorships and $4 million in brick sales by the time it opened in early May. In early June, the numbers were closer to $4 million and $634,000, respectively.
As any NASCAR fan knows, a slow starter doesn’t always end up a loser. “We’re taking a long-term view,” says Winston Kelley, the hall’s executive director. “It will take a while before we can get an accurate idea of the economic impact. So far, from what I hear, from people involved with the hall to fans, it’s been very successful.”
Still, nobody connected to the project would be upset if the pace picked up little. “Ideally, they’d want to get big crowds in the first few years before they settle down to the more steady-freddy numbers,” Depken says. “But that doesn’t mean they have to have them for this to work.”
On the company
Revelations and allegations of mismanagement keep on coming for the former Wachovia Corp., which barely avoided failure by selling itself to San Francisco-based Wells Fargo & Co. Not only did it pay too much for the California thrift that hastened its downfall, but lax controls allowed drug traffickers to use the Charlotte-based bank to launder money (Regional report, May). Now a former vice president of utility services has pleaded guilty to mail-fraud conspiracy and tax evasion. Federal prosecutors say Terry Scott Welch bilked the bank of $11.2 million from 2000 until he was laid off in 2008. They say he authorized payment for goods and services the bank never received. In some cases, he split the payments with contractors; in others, they paid for things he or family members got. In one instance, the bank paid a bill for forklift rentals, but the money was spent on lawn mowers, jewelry and personal watercraft.