Charlotte City Council pursuing agreements from Tepper before releasing funding

Charlotte city leaders discuss future of transportation at annual retreat

DURHAM, N.C. — Addressing problems across the city comes with a cost and the Charlotte City Council is working to figure out how to best use taxpayer money at their annual retreat.

The three-day retreat in Durham, which started on Monday, will allow councilmembers to outline their goals for 2020.

“We are trying to fly the plane while it is being remodeled and built,” Mayor Pro Tem Julie Eiselt said about the balance between developing a 2040 comprehensive plan and juggling city growth.

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The city budget staff is optimistic about the state of the 2021 Fiscal Year budget, but they have some work cut out for them.

The city is projecting $17.5 million dollars in new revenue for 2021 but expenditures are estimated at $24.3 million. That leaves the city with a $6.8 million dollar hole to fill.

MLS expansion team

City leaders dig into funding for MLS

For the first time, the Charlotte City Council publicly discussed its $110 million commitment for Major League Soccer. The discussion was part of a larger presentation on significant projects, during the third day of the Charlotte City Council retreat in Durham.

The money hasn't been released to Panthers and MLS owner David Tepper. City leaders say they need agreements in place with Tepper on Eastland, Bank of America Stadium and Tepper's plans for a new stadium, and the proposed entertainment district.

Chief Financial Officer Kelly Flannery briefed the Charlotte City Council on the current state of the Convention Center Tax Fund. The fund is composed of the room occupancy and prepared food and beverage taxes. Funds can only exclusively be used for tourism related purposes and can't be applied toward things like affordable housing and policing.

Flannery informed council that the bucket of money has plenty of funding and the city is in good shape to provide Tepper with the $110 million and not be limited for other major projects.

"Having been in the red, it is a lot better to be in green," Flannery said.

Figures presented by Flannery show the Charlotte City Council has an estimated $41.7 million in the account's fund balance. According to city projections, that fund's balance is projected to be $101.9 million in 2024 and rise to more than $500 million in 2044. Flannery also presented council with a scenario in which the city takes on a $100 million project like MLS. The fund balance would then sit at $41.2 million, rise to $71.8 million in 2024 and $323.5 million in 2044.

Payments on the debt would be spread out over an extended period. The fund balance total is what is available to make payments on the debt.

"I hope through the next few years we make significant investments in our city with sports, entertainment and our cultural centers," Mayor Vi Lyles said.

But before the money is provided to Tepper Sports, the city wants three "complex multi-level" agreements in place.

The first involves Eastland where the team headquarters and practice facility will be, the former Eastland Mall site.

"It feels like the perfect storm and I am very excited for the east side and for the community as to what this can do," Assistant City Manager Tracy Dodson said.

The Eastland Mall site will need to be rezoned. Dodson says the paperwork for the rezoning will be filed in January. A public hearing will happen likely in April with an early summer vote.

The city also wants a framework in place for Bank of America Stadium and Tepper's plans for a new stadium. The tether keeping the Panthers in Charlotte expires soon and leaders see these talks as a way to make sure MLS and NFL stay in Charlotte.

"I need to know Tepper is not going to go to South Carolina," Dodson said. "The goal is to make an investment in MLS that is also making an investment in keeping the Panthers here and building out something that is great for our city."

The last agreement the city needs in place is for Tepper's proposed entertainment district.

Mayor Lyles says the community will be engaged through the whole process.

“When we talk about what our vision is, it is working with Tepper Sports to accomplish our goals and create a place people want to come,” Lyles said.


Charlotte's bus system, in its current state, is not receiving a ringing endorsement from city leaders.

"It's lacking,” Councilman Braxton Winston said Tuesday at the Charlotte City Council's retreat. "It's not dependable."

Leaders dedicated a large chunk of the second day of their annual retreat to transportation. Buses dominated the conversation when leaders were asked to identify their short, medium and long-term goals.

"We have this mentality in Charlotte that we have these old buses and you are sitting on it, forever, and there are maybe six people on there," said Mayor Pro Tem Julie Eiselt, who chairs the city's Transportation Committee. "That's because it is an inefficient system."

Leaders said the key will be breaking the stigma that surrounds Charlotte's system and cutting down the number of time riders spend on them.

"We were really focused on affordable housing last year. Now we are talking about affordable living and our bus system is a big part of that," Eiselt said.

Big ideas include replacing the aging fleet with electric buses and developing an app so people can preorder rides ahead of time.

"Why don't we create an app that can be piloted where folks can go the night before if they know they are riding and can actually order a ride, and see how close the bus can get to their house?" Councilman Tariq Bokhari said.

The Charlotte City Council is considering implementing a strategy being planned by the Charlotte Area Transit System called "Envision My Ride." The effort would increase bus pickup times to every 15 minutes. The initiative comes at a cost. CATS CEO John Lewis estimated it will cost an additional $32 million in operating costs to cover drivers, mechanics and operators. The City Council would also need to purchase 100 additional buses.

The cost of buses varies with which type the city pursues. Lewis estimates diesel buses would cost $50 million, hybrid buses would cost $75 million and electric buses would cost upward of $100 million. The federal government typically covers 80% of the cost but funding comes in various cycles.

The city isn't taking its eye off the ball when it comes to a light rail train like the Silver Line from Matthews to Belmont but funding questions still remain. The project remains a long-term goal.

“If it is only compromised of property tax and sales tax, it is dead on arrival,” Bokhari said.

Charlotte leaders discuss budget, affordable housing, city’s growth at council retreat

Budget Director Ryan Bergman said contributing to that funding gap is salary increases for first responders that have been implemented in recent years. Funding for public safety salary increases is up 78 percent.

But leaders say the pay raise is crucial for police officer retention.

According to the city, 65 officers retired last year, 47 resigned and there are currently 182 openings in the police department.

Last year, staffers were able to trim $12 million from departments with no major impacts to service. Republican Councilman and budget chair Ed Driggs said that $6.8 million gap is pretty typical and he is not concerned.

“That is a fairly typical conclusion that we reach at this point in time it is based on assumption of salary increases,” Driggs said. “Basically what we are talking about is studying further how we will fund the salary increases, and in the past we have been able to solve that issue.”

Other retreat topics include crime, economic development and affordable housing.

Councilman Tariq Bokhari called public safety, “the No. 1 priority” and said the council must take a data-based approach to address it while working with leaders on the state, federal and local levels.

“We have to figure out what are we doing differently, and I think we are finding out a lot of this isn’t in our control,” he said.

City staffers announced there will be three bonds on the ballot in 2020. Voters will decide whether to approve $30 million for neighborhoods, $117.2 million for transportation and $50 million for affordable housing.

Mayor Vi Lyles is challenging leaders to transition from a rental-based affordable housing approach to homeownership. One way the council could do that is by buying undeveloped land and preserve it for single-family homes.

"We are building a lot of apartments,” Councilman Malcolm Graham said. “We clearly understand families build wealth through homeownership.”

Councilwoman Victoria Watlington said the strategy of land banking would help protect against gentrification.

“When you own your home and own your property, you have much more of an impact on how to decide how things are going to be versus if you are renting. You are at the mercy of the owner,” she said.

Charlotte City Council retreat costs taxpayers about $42,000

Wells Fargo senior economist Mark Vitner told the Charlotte City Council the economy will likely grow faster this year than expected.

He said recession concerns have abated significantly as the yield curve has normalized and equity markets have reached new all-time highs.

Vitner challenged leaders to steal businesses and companies from New Jersey and Connecticut and said they are not as business-friendly as the Queen City.

Bokhari said the focus must be on protecting local businesses as much as landing major corporations.

“We are not just talking about Honeywell and Lowe’s. We love them,” he said. “We need to not only be focusing particularly on recruiting but also retention of small businesses in town.”

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