Charlotte Hornets' practice center, arena district could generate $86M in sponsorships for city

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Innovative Partnerships Groups' Sean Moran speaks on the exciting opportunity

A planned NBA practice center funded by city government and an adjacent arena district could generate $85.7 million from sponsorships over a 17-year period, according to projections shared yesterday by a national consulting firm.

Los Angeles-based Innovative Partnerships Group, a consultant for the past year on the proposed arena district, shared its findings as part of Charlotte City Council’s monthly economic development committee meeting. Sean Moran, the firm’s director of valuation and analytics, told the committee that, while Innovative Partnerships Group has extensive sports experience, the company has also worked on strategy and sponsorship sales for non-sports innovation and entertainment districts in Memphis and Nashville, Tennessee; Tampa, Florida; and the San Francisco Bay Area in California.

The Charlotte project is a bit of both. It ties in the NBA Charlotte Hornets, who play at the city-owned Spectrum Center and who secured a commitment from city government last year to fund a new, $60 million practice center. The practice center is likely to be built as part of a new Charlotte Transportation Center across the street from the arena, a project that will include a mix of uses. Those uses will likely include offices, a hotel, parking and ground-floor retail — all atop a subterranean bus hub.

The existing transportation center opened in 1995. It’s bounded by the light-rail tracks and East Trade, South Brevard and East Fourth streets in uptown. The city wants to replace the CTC on the same site, with a likely opening in 2028 or 2029. 

Terms call for the private developers to buy the 2.6-acre site, though the city would own the new transportation center. City government and the Charlotte Area Transit System would fund the $89 million underground bus station. Everything else would be privately funded except the NBA training center.

In 2019, the city selected real estate firms Dart Interests of Dallas and locally based White Point Partners to redevelop the site after a public bidding process. The city required a bus station be included as part of any redevelopment.

City Council last year approved a combined $275 million worth of taxpayer-funded projects for the Hornets in exchange for the NBA franchise extending its lease 15 years through 2045. Th funds include $215 million worth of maintenance and upgrades at Spectrum Center, which opened in 2005. Those projects will be completed over several off-seasons beginning this summer.

An opening date for the practice center has yet to be determined. Funding for the $60 million project is to be generated through sponsorship rights granted to the city by the Hornets and through related sponsorship sales within the arena district.

Moran outlined the sponsorship strategy yesterday. Innovative Partnerships Group anticipates selling one sponsorship for district naming rights at a starting price of $2 million annually, one for the NBA practice center for $1.25 million per year, and three to five district founding partners spending an average of $750,000 apiece to align with features such as a food hall, the Rail Trail and other assets. Most of the agreements would have annual increases of 2% to 3%.

Based on those projections, IPG estimates the sponsorships would generate $137.3 million between 2028 and 2045, or, in present-day inflation-adjusted dollars, $85.7 million. The practice center is expected to cost $60 million.

Tracy Dodson, assistant city manager in charge of economic development, told CBJ that the difference in revenue and construction cost allows for possible overruns and revenue-sharing arrangements.

The Hornets’ practice center would include four courts on two levels as well as locker rooms, therapy and nutrition centers, and coaches’ offices. The center would encompass 59,385 square feet and 9,850 square feet of outdoor patios and terraces. 

NBA training centers for the Atlanta Hawks, Philadelphia 76ers, Chicago Bulls and Milwaukee Bucks cover 58,000 square feet to 65,000 square feet, with exterior space of 640 square feet to 14,450 square feet.

“One of the things that has worked really well (in other places) … is buying in, what does everybody want this district to represent?” Moran said. “We really want it to be authentic to the city, to the area and to those corporate partners.”

Moran said that companies representing specific sectors or advertising campaign subjects would be top candidates. These include mobility companies, who would have natural links to transit, as well as sponsors actively involved in campaigns tied to sustainability, community pride (such as links to nearby Brooklyn Village), sports and entertainment, and financial services and financial technology firms.

Addressing a council member’s concerns about screening sponsors to avoid potential missteps and protect the city’s image, Dodson said that “putting up these guardrails” will help, as will consensus-building before signing sponsors among the key partners: the Charlotte Area Transit System, known as CATS; city government; the NBA Hornets; and the Dart-White Point development team. Dodson said that council would have final approval before any sponsorship agreements are signed.

A successful sponsorship campaign requires “being strategic about how all of this weaves together,” she added.

Dodson and Moran touted a year-round attraction that would turn South Brevard Street into a community asset used for farmers markets and street fairs. It would be closed to cars on event and game days to create an arena-focused district. Dodson noted that similar ideas have been discussed on and off since the 1990s and included in uptown strategy plans.

Momentum is likely to grow as a new hotel is underway nearby, the former EpiCentre is slated to be revampedand the Midnight Diner will reopen in the area after relocating from South End.

“How can we integrate everything together to make it seem very unified?” Moran asked. “I think the one thing you want to avoid is having a hodgepodge of different areas. That really defeats calling it a district, and it defeats the ability to generate some of that revenue.”

He unironically went on to tell the council committee, “We want to avoid a NASCAR feel” of colliding logos, even as he acknowledged that the city owns the NASCAR Hall of Fame located at the other end of the street on Brevard. “Part of it is bringing people in outside of game days or event days,” Moran said, alluding to how to make the district work best.

Last week, the Metropolitan Transit Commission, the regional governing body over CATS and a half-cent countywide transit tax, approved the transit agency’s preferred below-ground design for the new transportation center. On Jan. 3, City Council endorsed the same proposal. The discussions yesterday by two council committees provided another incremental step, with the full 11-member council expected to back a nonbinding agreement between local government and private developers to continue planning and design work.

“I’m really excited about the steps we’re taking,” councilman Malcolm Graham said yesterday, echoing comments by Driggs and Marjorie Molina, among others. “Obviously, the devil’s in the details.”

Earlier yesterday, during a discussion by the transportation committee, council members James Mitchell and Renee Johnson encouraged city and CATS administrators to consider whether tenants in the existing transportation center will be offered spots in the redeveloped transit hub.

The $89 million transportation center budget includes $12 million to build a temporary bus station on a 1.2-acre site owned by Dart-White Point on Brevard Street, across Fourth Street. Construction would likely begin in 2024 and the temporary station would open in 2025, operating until the new center is built. Dodson and CATS executive Jason Lawrence told council members they hope to determine ways to reuse materials from the temporary station.

About Innovative Partnerships Group

Innovative Partnerships Group (IPG 360) is a leading Los Angeles-based naming rights, business development and international marketing firm focused on generating long-term strategic business partnerships for prestigious global brands. It is specialised in the sports, music and entertainment industries and has extensive experience with clients from professional leagues, governing bodies and franchises and teams from the main sports competitions including LaLiga, NFL, NBA, NHL, MLS, MLB and the Olympics.

Innovative Partnerships Group also works with a patented system, Partnership Intelligence ™, which helps companies and brands accurately assess, align and measure their potential sponsorship deals. The company has been recognised on several occasions in recent years by Sports Business Journal as one of the leading sports marketing agencies in this industry

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