NASCAR Hall of Fame leaves Charlotte with load of debt

(Bloomberg) — Charlotte, where almost 30,000 people make a living off Nascar auto races, would seem the perfect place for a museum honoring driving legends such as Richard Petty and Dale Earnhardt.

As it turns out, the $192 million Nascar Hall of Fame, with vintage cars dating to the 1940s, is drawing fewer than half the visitors forecast when it opened in 2010, leading officials last month to use $5 million of public funds to settle bank loans. The move is raising questions about how North Carolina's largest city has financed economic development.

"It was a bad deal for the taxpayers," said Kenny Smith, a City Council member and Nascar fan who opposes the funding of the museum. "The city invested taxpayer money based on faulty assumptions that didn't come to fruition."

The city of 793,000, which owns the hall, sold about $137 million of municipal debt in 2009 as part of the financing. Charlotte joins states and localities in the $3.5 trillion municipal market partnering with the private sector to bring in tourism revenue and create jobs as infrastructure needs outstrip financial resources.

Attendance Miss

Charlotte has gone that route for art projects, sports venues and real-estate developments, said Ron Kimble, the deputy city manager. As attendance for the Nascar venue shows, the projects don't always go as intended.

Officials originally predicted the museum would draw 800,000 people its first year and 400,000 annually thereafter, said Laura White, a spokeswoman for the Charlotte Regional Visitors Authority. The average has been about 170,000, she said. Attendance doesn't reflect the 300 or so convention-related events at the site each year, she said.

"It was going to be a huge economic-development project that would pay for itself," said Don Reid, a former City Council member who runs a marketing firm. "It sounded good because Nascar is a big financial industry, but it's a colossal failure that has harmed the taxpayers."
Kimble, who oversees economic development, disagrees.

"It was not working as envisioned, but that doesn't mean that it wasn't a success," he said. "It's an asset to the community" and helped draw convention business. More at Bloomberg Business