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NASCAR Building Growth Here Around Hall of Fame

Source: Erik Spanberg, Charlotte Business Journal   

September 19, 2008

Look at the big picture. That’s the message from NASCAR executives who find themselves embroiled in a heated public debate over the construction budget for the NASCAR Hall of Fame.

On Monday, City Council plans to vote on a $32 million boost to the $163 million budget. Hotel taxes provide the bulk of the funding. This month, members of city staff, the visitors authority and the hall of fame asked for the additional money, with more than half — $17 million — targeted for spiffier exhibits. As part of the arrangement, NASCAR and primary lenders Wachovia Corp. and Bank of America Corp. offered to defer royalty and loan payments.

NASCAR awarded the hall of fame to Charlotte in 2006. The deal boils down to a licensing agreement for NASCAR, which will offer assistance promoting and designing the 150,000-square foot tribute to stock cars.

The city’s visitors authority will manage the hall of fame while the city owns the building.

Several council members have been sharply critical of the request for more funding.
For NASCAR, the controversy overlooks the racing group’s larger commitment in Charlotte. This week, NASCAR Senior Vice President Paul Brooks discussed the hall of fame and other issues from his 39th-floor office in the One Wachovia Center. Following are excerpts:

Why does this request make sense?

One thing that we need to explain better ourselves is that none of that (the office tower and related projects) would be happening had the hall of fame not been here. Because of the hall of the fame and because of how the city embraced not only that project but NASCAR and our industry, it caused us to shift our strategy at NASCAR.

All of our interactive media, broadcast operations, all of those elements were in our Los Angeles office. We had others in our Daytona Beach office. We made the strategic decision to shift all of that to Charlotte, to create this NASCAR Media Group.
The opportunity came with (office-tower developer) Lauth (Property Group) for this NASCAR Plaza, which is a $105 million investment they’re bringing. NASCAR will be spending $45 million. That is sure to go up a little bit. You’re talking about a $150 million investment separate from the hall of fame.

But NASCAR benefits too, right?

It’s good for NASCAR, no denying that. But because of how the city embraced us, we shifted strategy. None of that was promised or even discussed when this hall of fame process started.

We believe it is so critical that we all deliver on the original promise of a world-class attraction. Yes, the costs have escalated, but we do not think that the incremental money is out of line.

I think you recently said there will be 250 NASCAR jobs here by April 2009. Is that number correct?

It’s actually more than that. If you look here in this office, it houses our licensing, our automotive aftermarket. We have the NASCAR Foundation in close proximity. We have our brand marketing. Our research group is here. Then (across town, there’s) NASCAR Images. And we’re bringing all of these employees together.

All of that will consolidate into the NASCAR Plaza. At that time, we’ll have over 250 people in there.

TV ratings are slightly up and attendance is slightly down this season for NASCAR races. How do you view the sport’s potential for growth and the impact on interest in the hall of fame?

Certainly the gas and energy issues and the economy overall, we feel an effect of that, just as others do.

There’s been some softening at the events. On the TV side, we’ve clearly reversed the trends there and stabilized the ratings. That had a lot to do with our broadcast partners getting back to the basics, if you will, and focused on the core fan.

There were so many distractions the last few years. I think this year we’re back to racing. That’s the focus. The TV partners have had a great success on the ad sales side. We’re at record numbers on sponsorship and sponsorship value with teams. We’re optimistic because the fundamentals of the sport, even in a really bad economic environment, are healthy.