Money troubles? NASCAR Hall of Fame looking for forgiveness
The NASCAR Hall of Fame, located in the heart of what locals call "uptown" Charlotte, N.C., is a beautiful place, packed full of all kinds of great racing memorabilia. The staff is friendly and helpful, eager to enhance the experiences of all visitors who come through.
But it has yet to come close to living up to the kinds of attendance and financial projections that at least in part led to it being located in Charlotte in the first place.
Now, according to a report in The Charlotte Observer, the Hall is close to reaching an agreement to have two banks forgive a $19.1 million loan. The newspaper reported last Friday that members of the Charlotte city council are set to hear about "proposed amendments" to such an agreement this Monday.
The Observer first reported last November that the city and the Charlotte Regional Vistitors Authority, which manages the museum, had entered into negotiations with Wells Fargo and Bank of America to forgive the loan, which had grown to $21 million with interest.
The loan was supposed to be repaid from the sales of sponsorships and commemorative bricks, but the money raised thus far from those two revenue streams has not come close to being enough to pay it off.
In fact, according to the CVRA, the Hall continues to operate at a loss overall. It lost a total of $3 million combined in the two latest fiscal years, the last of which concluded in June of 2014. According to CVRA reports, the Hall lost $1.4 million for the latest fiscal year and $1.6 million in the fiscal year that ended in June of 2013.
Attendance at the Hall from July 2013 to June 2014 was 169,724, down from a total of 178,838 the previous fiscal year when attendance appeared to have been bolstered by the city of Charlotte hosting the Democratic National Convention.
And while there are positive signs that the Hall is attracting more special events — 300 private events were booked last year — attendance has never come close to the projections the CVRA lauded when Charlotte was battling other cities to land the Hall. Charlotte beat out Atlanta, Daytona Beach (Fla.), Kansas City and Richmond (Va.) to land the rights to build and operate the Hall of Fame.
Originally, the CVRA projected that first-year attendance after the Hall opened in 2010 would be 800,000, resulting in a profit of some $800,000. Instead, in the first fiscal year of operation from May 2010 to April 2011, the Hall drew just 278,046 visitors and it has lost money each year since then.
"We still have long-term work going on how to solve for the current reality of the performance of the Hall versus what it was expected to do originally," Tom Murray recently told the Charlotte Business Journal. Murray replaced Tim Newman as CEO of the CVRA in 2012, in part because Newman’s original projections eventually were deemed to be so inflated.
The latest Observer report said that discussions with the two banks about forgiving the $19.1 million loan began last April, when Charlotte Deputy City Manager Ron Kimble emailed now-retired Wells Fargo executive Carlos Evans to ask if the bank would consider such a request. According to the newspaper, Evans wrote back a week later and said: "We realize the Hall is a problem. We are willing to do our appropriate share in helping put the Hall on an even financial footing as we realize (it) benefits this community on many different levels."
But at the time Evans also went on to write, according to the Observer report, that none of the proposals being discussed at Wells Fargo involved "a full forgiveness of debt," later adding that "we all need to be sharing the pain."
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