For those who don’t follow Charlotte’s basketball arena soap opera for a living, it probably seems that its cost keeps rising while its size keeps shrinking, while nobody’s even driven a nail yet. That’s understandable. In the half-decade or more that city leaders have been seriously discussing a new arena, its estimated cost has never stayed the same for more than a few months. For now, the cost of the project is theoretically locked in by a city agreement with the NBA at $265 million.If it seems like the price tag has risen over the last year, there’s a good reason for that. For starters, city leaders and the media have referred to the facility as a “$200 million arena” for a long time. That’s because city leaders were fairly certain that the arena would cost $200 million to build, but less certain how much extra the land they would build it on would cost them. Back in February 2002, a week before City Council approved a financing plan for the arena, the project, including the land, was supposed to cost about $230 million. The arena itself was supposed to have about 800,000 square feet of usable space, which would have made it about double the size of the current coliseum. But by October 2002, the city and the county were in a hissing contest over the Third Ward land the county was supposedly going to sell to the city for the arena. At the time, it appeared the Third Ward land might cost the city anywhere between $13 million and $30 million, although no official price was ever publicly disclosed.
But the county wouldn’t move fast enough to satisfy city leaders, so they decided to assemble their own land in First Ward by buying dozens of parcels, which city officials initially thought would drive the cost of the arena and the land to $245 million. At the time, the city was also eyeing about $13 million in additional land that wasn’t needed for the arena, which city leaders considered buying and then reselling to developers so they could stipulate what could be built around the arena. Jim Schumacher, the city’s property manager, claimed that the city could afford to buy only $10 million of the extra land “at most” because $255 million was the farthest the city could stretch its financing package.
A month later, though, City Council voted to buy the full $13 million in additional land and had tacked on an additional $7 million reserve for “future maintenance” of the 780,000 square-foot facility, bringing the project’s total cost to $265 million.
So while parts of the project expanded before the deal was approved, other parts have been shrinking since. A few weeks ago, architects slashed 43,000 square feet off the total size of the arena, which is projected to save the city $4.3 million. They also dipped into the $20 million contingency fund, which has dwindled by about $2.5 million. The contingency fund, which city staff told council would be 20 percent of the $200 million construction budget in October had dwindled to 10 percent of the $200 million budget by the time the council approved its final agreement with the NBA.
This article appears in May 7-13, 2003.
