Making sense of Charlotte pro-sports expansion talk

Plus: 2,000+ Charlotte jobs from SunTrust/BB&T merger, report indicates; Bentley's on 27 to close; New Dairy Queen Blizzards

Good morning! Today is Friday, May 17, 2019. Need to subscribe? Sign up for free here (charlotteledger.substack.com).

Guest column: Charlotte wants to land another big-league team. Could it?

by Tim Whitmire

Charlotte, brace yourself for a busy year of pro sports expansion speculation.

  • Major League Soccer has announced its intention to add teams in Sacramento, St. Louis, and a third, to-be-determined city, swelling the league to 30 teams. Carolina Panthers owner David Tepper has said he would like to own a franchise that would share Bank of America Stadium with the Panthers. That puts Charlotte in competition with Phoenix, San Diego and Detroit, among other cities, for that “final” slot (MLS had just 16 teams as recently as 2010, so any declaration that expansion is complete should be taken with a grain of salt).

  • Meanwhile, the Major League Baseball expansion hot stove has reignited in recent months. It’s been 21 years since Arizona and Tampa Bay joined the league, and growth from 30 to 32 franchises is expected once MLB resolves stadium situations in Oakland and Tampa. Baseball America recently included Charlotte in a series of profiles of potential expansion cities.

As a onetime reporter with a sub-specialty in the world of sports business, I like a good expansion story as much as the next guy (actually, maybe more). Here are some tips on how to make sense of all the expansion news you’re sure to encounter in the months ahead:

Hype and more hype: The First Rule of Expansion is always talk about expansion. When it comes time to plant new franchises (and collect hundreds of millions in windfall fees from new owners), creating a perception of demand is simply smart business. There is zero downside for MLB Commissioner Rob Manfred or MLS Commissioner Don Garber in listing Charlotte as a target, regardless of what they think of the market. Cities — particularly those that spend a lot of time wondering whether they are “world-class” — are always happy to see themselves named as potential destinations, regardless of whether they intend to play ball.

Deep pockets required: Ownership isn’t an apparent issue with an MLS bid, as Tepper has signaled his interest and is committed to the market via the Panthers. But finding local ownership for an MLB team could be another matter. When Jerry Richardson put the Panthers up for sale after the 2017 season, there were no logical local candidates with the deep pockets to pay the $2.275B that Pittsburgh native Tepper eventually fronted. If local ownership is a priority for MLB, it’s not obvious who in the Carolinas would have the wherewithal and passion to stroke that check.

Shiny homes preferred: Leagues don’t grant expansion franchises to cities that don’t supply a new, state-of-the-art (taxpayer-funded) venue for the fledgling team. Again, MLS doesn’t have an issue here — if they like Tepper as an owner and are willing to let a Charlotte team play in his football stadium. As for baseball, 10,200-seat BB&T Field, home of the AAA Knights, is just five years old and not readily expandable from its current footprint to the 35,000 to 40,000 seats needed for MLB. With Tepper widely expected to seek a replacement or major renovation of Bank of America Stadium (now one of the NFL’s oldest venues), is there appetite in Charlotte for two major, publicly-funded stadium projects in the 2020s?

The Market — Baseball: There’s one more big problem with MLB in Charlotte, as captured by a source I discussed this issue with more than a decade ago: A weekend home series in July vs. the Yankees? No problem filling 38,000 seats. But how many people are going to show up on a Tuesday in April to see Kansas City? Yes, Charlotte’s population has grown, but at our current size (approximately 2.6 million in the Combined Statistical Area, as defined by the Census Bureau) we remain smaller than most current MLB markets and lack the core urban density most conducive to building a reliable attendance base for 81 home games each season. While anything is possible, it’s pretty easy to see an MLB future for Charlotte that looks awfully similar to the NBA Hornets: a generally uncompetitive team that plays to modest crowds and local apathy.

The Charlotte Knights have drawn crowds uptown. But Charlotte might have a tougher time supporting a major-league team.

The Market — Soccer: So … it’s gotta be soccer, right? Mmmmm … maybe, but you’ve got to squint a bit to make it work. The last several rounds of MLS expansion have been split into two buckets.

  • In one group are franchises given to deep-pocketed/high-profile ownership groups in mega-metropolitan regions where the size and diversity of the population essentially guarantees a baseline level of soccer interest (Atlanta United, LAFC, NYC FC, the upcoming Inter Miami).

  • The other group is composed of smaller or less diverse cities whose grass-roots enthusiasm for minor league soccer “earned” them an MLS franchise (Minnesota, Orlando, Cincinnati, the upcoming Sacramento team).

I’ll be waiting over here while you figure out whether Charlotte belongs in either of those buckets. …

Tepper undoubtedly sees a replicable model in Atlanta, where fellow NFL owner Arthur Blank’s United is a co-tenant of the Panthers’ division rival Falcons. United has played to capacity crowds and won the MLS Cup in a dream second season last year.

But Atlanta’s CSA is more than 2.5 times the size of Charlotte and, for Blank, MLS was willing to overlook its usual insistence on a soccer-specific venue. It’s not at all clear they would do the same for Tepper, particularly in the absence of any demonstrated, grassroots enthusiasm for pro soccer in Charlotte.

The Bottom Line: I’m not big on handicapping these things, because I have zero insider knowledge these days (but feel free to email me if you have any that you want to share … ). That being said, I try to think about these things from two perspectives: 1) should they happen (i.e., is an MLB or MLS franchise in Charlotte likely to be successful on and off the field)?; 2) will they happen?

  • Baseball: An MLB franchise in Charlotte is a bad idea and likely to be a poor on-field product. MLB is likely to conclude the same thing. I put the odds of MLB coming to Charlotte in the 2020s at 10% or less.

  • Soccer: MLS has the potential to fit well with the city’s millennial and increasingly diverse population. I’ve long believed a renovated Memorial Stadium would be a great venue for an MLS franchise, but my operating theory was that the path to success would come through grassroots support for a lower-tier side (as Jim McPhilliamy has spent years trying to build with USL’s Charlotte Independence). Tepper’s plan (much like the abrupt 2017 MLS expansion bid by Speedway Motorsports scion Marcus Smith) feels more like a bet on the city’s demographics and potential future interests as opposed to its present-day merits as an MLS market. Should it happen? In the long run, yes; but maybe not in the near-term. Will it happen this time around, in 2019? I’d give that a 40% chance.

Tim Whitmire, a former reporter for the Charlotte Observer and The Associated Press, is a 20-year resident of Charlotte and co-founder of the F3 men’s workout movement. He can be reached at trwhitmire@gmail.com.


Report: 2,000+ Charlotte employees for SunTrust/BB&T?

The new BB&T-SunTrust bank headquarters that’s heading to Charlotte could be aiming big: A research report out this week from real-estate services company Colliers International says: “Their total office footprint seems to be a moving target, but rumors are they could absorb in excess of 500,000 square feet.”

Wow – 500,000 square feet is humongous, y’all. For sake of comparison, the entire new 33-story Legacy Union tower is 850,000 square feet. The 11-story office building in Ballantyne announced last week is a mere 328,000 square feet.

In an email to the Ledger, a Collier official said that 500,000 square feet would ordinarily suggest somewhere between 2,000 and 2,500 workers. BB&T (based in Winston-Salem) and SunTrust (based in Atlanta) have not disclosed how many workers they figure their new HQ here will have. BB&T says it employs 2,000 workers in Winston-Salem. SunTrust refuses to provide employment figures for Atlanta.

The banks have said they plan to maintain a community banking center in Winston-Salem and a wholesale banking group in Atlanta.

If this report pans out, that could have huge implications for uptown office space, which is already a hot market, as well as for residential real estate, which is already burdened by tight supply of available homes. The numbers, according to a recent report by JLL:

  • Office vacancy rates in Charlotte are falling, and 65% of office lease deals in the 1Q were for uptown.

  • “There are as many as five large corporations seeking space within the urban core of Charlotte,” the JLL report said.

  • Uptown has about 15 million square feet of prime office space, more than 10% of it vacant, with another 2.1 million under development.

The big question. All the growth makes you wonder: Does uptown Charlotte need another big office tower?

It’s always better to traffic in actual facts than in rumors and speculation. But you can bet that inside the big commercial real-estate companies in town, they’re not sitting around doing nothing while awaiting the official announcement from the banks.

The SunTrust-BB&T deal is expected to close by the end of the year.


Bentley’s on 27 to close; says landlord ‘doesn’t like us’

Bentley’s on 27 is closing on Saturday and plans to reopen later this year in SouthPark, the restaurant’s co-owner tells the Ledger. The upscale restaurant, on the top floor of uptown’s Charlotte Plaza Building, is one of the city’s few dining spots with a high-up view of the city’s skyline.

Kay Emad — who opened Bentley’s on 27 with her husband, Jim, 15 years ago — says the couple was unable to come to terms on a new lease with the building’s owner: “He doesn’t like the food, he doesn’t like the decor, and he doesn’t like us,” she says.

The Foundry Commercial broker who manages the property did not return a phone call and email on Thursday. New York-based Rabina Properties bought the building in 2015.

Emad says she’s working on a lease for a SouthPark site, which could open in August or September.

Tough to get 27 stories up in SouthPark, though.


Tweet of the day


Siskey investors to receive another check

About 200 investors with the late Rick Siskey will be receiving an additional check in the next few weeks after agreeing to sign on to a settlement and release Siskey’s widow from litigation, according to court documents filed this week.

But 28 of those investors declined to sign on to a similar arrangement with MetLife, and many are pursuing court claims. Some of them allege MetLife brokers who worked with Siskey should have known he was running a Ponzi scheme.

The investors have already received some money. But the bankruptcy trustee for Siskey’s investment companies, Joe Grier, says more money will be sent to those who signed the releases. Court documents say checks should be mailed out by June 3. Overall, investors should receive at least 91% of what they lost, Grier says.

“If your goal is ease, resolution and no litigation, it is very good result, and a good resolution for the investors,” he says.


Correction

  • Filming of the early seasons of “Homeland” included many locations around Charlotte. An item in Wednesday’s newsletter said it was filmed “in Myers Park and Foxcroft.” In fact, the house of one of the main characters, Sgt. Nicholas Brody, was in Mountainbrook, not Foxcroft.


In brief


Food and booze news

A weekly wrap-up of the week’s eating and drinking developments

  • On tap: Original NoDa Brewing taproom opens today after refurbishment (Agenda).

  • Burger-sushi concept war: New restaurant to open in South End by end of year; owner calls out SouthPark burger/sushi pioneer Cowfish: “the prices are lower than, say, Cowfish” and “we have more creative toppings.” (Agenda)

  • New Dairy Queen Summer Blizzard Menu: Limited-time options include S’mores, Oreo Cookie Jar, Brownie Dough, Caramel Cannonball; flights of mini-Blizzards also available.

  • Speaking of summer treats: Chick-fil-A’s seasonal peach milkshake returns May 27, the company says.


Got a news tip? Think we missed something? Drop me a line at editor@cltledger.com and let me know.

Like what we are doing? Feel free to forward this along and to tell a friend.

The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.