Charlotte was chosen as the site of the NASCAR Hall of Fame.

FAQ: NASCAR Hall of Fame in Charlotte

NASCAR announced Monday that Charlotte is the chosen location for the sport's Hall of Fame.

1. Why Charlotte?

Charlotte was picked for three important reasons:

• First, Charlotte's proposal best achieves NASCAR's overriding goal to have one of the premier hall of fames in the world of sports and entertainment.
• Second, the region's rich racing history and the presence of so many NASCAR team headquarters makes for a compelling fan experience.
• Third, the emotional and financial commitment made by the City of Charlotte to ensure long-term success of the Hall of Fame represented the best fit for NASCAR, the industry and the fan base.

2. When will Charlotte break ground?

Design work should be finished about this time next year, with groundbreaking in Spring 2007. The NASCAR Hall of Fame in Charlotte is expected to open no later than March 31, 2010.

3. What public money is in the deal?

• $102.5 million in Certificate of Participation (COPs) financing supported by the new NASCAR Hall of Fame dedicated 2 percent hotel/motel room occupancy tax
• $20 million of land value contributed by the State of North Carolina
• $13 million in COPs financing supported by the existing hotel/motel room occupancy tax dedicated to convention center facilities
• $2.5 million in COPs financing for the optional 400 additional parking spaces supported by the existing hotel/motel room occupancy tax dedicated to convention center facilities
• $5 million from the state and $6 million from the city to reconfigure the South Caldwell Street/I-277 interchange, reimbursed to both through sale of excess land

There are no property taxes or other general fund revenues in the deal. In addition, the taxes being used (i.e., the existing room occupancy tax dedicated to convention center facilities and the new 2 percent room occupancy tax associated with the Hall of Fame) are dedicated to specific hospitality purposes and cannot be used for general citywide purposes such as community safety and transportation.

4. How do the final project costs differ from what was in the "bid," and what are the reasons for the differences?

The original proposal estimated construction at $137.5 million. The final contract increased that budget to $150.5 million to account for construction industry escalation resulting from Hurricane Katrina and the current economic climate. The office building addition to the project surfaced late in the process and presented a significant opportunity to create synergies and tax base growth not previously imagined/contemplated.

5. What are the advantages of this location and its components?

• Significant expansion of Charlotte's convention center
• Great exposure/great access to the interstate system
• Substantial economic development opportunities for adjacent vacant land and the Second Ward
• Office tower represents additional tax base growth on existing Hall of Fame land
• Excellent synergy of NASCAR offices/Hall of Fame/ballroom/retail/convention center
• Strong connection to the new arena and proposed Wachovia complex
• Low cost additional parking for Hall of Fame complex in a shared use arrangement

6. What does NASCAR get?

NASCAR will receive the following percentage of revenue as royalties:

• 5 percent of restaurant revenue
• 7.5 percent of catering, special event, special admission and gift certificate revenues
• 10 percent of all other revenues that are subject to a royalty

Royalties do not have to be paid on corporate endowments or individual donations (e.g., commemorative brick sales). If the Hall of Fame has no cash flow to pay royalties when due, they will be deferred until there is adequate cash flow (and any deferred royalties remaining at the end of the contract will be written off by NASCAR).

The Charlotte Regional Visitors Authority (CRVA) will also make an annual $100,000 (increasing by 3 percent per year) payment to the NASCAR Foundation.

7. What does NASCAR put into the deal?

NASCAR's major contribution is the grant of a license to use its logos and trademarks. Stated another way, NASCAR is contributing its invaluable brand. In addition, NASCAR will:

• Make available its archive material, including video and photographic archives
• Work with the CRVA to promote and market the NASCAR Hall of Fame through its various media sources.

NASCAR partners such as NASCAR Images and SPEED Channel will be involved with activities and functions at the Hall of Fame.

8. What incentives did the City offer NASCAR?

• Royalties on revenues
• A 99-year ground lease and access to 400 parking spaces should NASCAR decide to build an on-site office building
• An option to purchase a 3.5 acre tract of land across Caldwell Street at fair market value

9. What guarantees are there that NASCAR will keep its offices and the Hall of Fame in Charlotte?

The contract requires NASCAR to keep the Hall of Fame in Charlotte until June 30, 2038. There are no contractual guarantees as to NASCAR's offices. However, the contract does give the city a share of profits or proceeds above the original investment when NASCAR or its developer sells or refinances the office building.

10. Is NASCAR moving offices and jobs to Charlotte?

NASCAR intends to move its Charlotte offices into the office building if/when it exercises its option on the office building. Other NASCAR partners may consider space in the office building.

11. Who decides who gets into the Hall of Fame? How many people will be in the first class?

NASCAR retains sole control over the nomination and election of inductees. Induction ceremonies will be at the Hall of Fame. NASCAR will develop an induction process that is of the highest integrity and honors the rich heritage of the sport in the best possible manner.

12. What are the next steps?

In order to complete the deal, the Charlotte City Council and the CRVA must approve the contracts and the Mecklenburg County Board of Commissioners must levy the dedicated Hall of Fame room occupancy tax. Working closely with NASCAR, the City will then diligently execute the design of the project and the CRVA will begin to develop its sponsorship, corporate support and individual donor programs. The CRVA will also search for an executive director of the Hall and, together with NASCAR, begin to program and market the NASCAR Hall of Fame.