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How Charlotte Outraced Other Cities for the NASCAR Hall of Fame

Published on 30th April 2006

Image: Courtesy NASCAR

By SCOTT DODD and RICHARD RUBIN

The yearlong contest among five cities to land the NASCAR Hall of Fame wasn't nearly as close as racing executives led everyone to believe.

Charlotte won over NASCAR officials early, newly released public documents indicate. But NASCAR kept communication open with Atlanta -- setting up a perceived duel that Charlotte leaders feared they might lose.

Thousands of city records requested by the Observer after the secret talks ended suggest that Charlotte emerged as NASCAR's top choice last fall, buoyed by more than $100 million in guaranteed public money from taxes on hotel rooms.

Even so, racing executives allowed four other cities to keep courting. The sport's tactic: Maintain public neutrality, while making private assurances to Charlotte.

Through January and February, as NASCAR said repeatedly that no choice had been made, Charlotte officials signed confidentiality agreements, briefed City Council members behind closed doors and set a March 6 announcement with NASCAR.

As early as Nov. 2, Tim Newman, the point man on Charlotte's bid effort, sent an optimistic e-mail after meeting with NASCAR executives.

"If we can put this together," he typed, "the deal is ours."

Yet all during the secret talks -- as other rival cities fell behind, and despite positive indications from NASCAR -- Charlotte leaders say they still worried about Atlanta.

When city officials flew to NASCAR's Florida headquarters for a key meeting last fall, Atlanta leaders were there, too.

As serious negotiations with Charlotte were set to begin in February, Atlanta's top CEOs made a personal pitch to NASCAR's chairman.

And even as Charlotte and NASCAR neared completion of a deal in secret talks, Atlanta kept looking for ways to snatch the prize.

"We were in constant communication" with NASCAR, said Mark Lazarus, president of Turner Entertainment Group and chair of Atlanta's bid effort.

But to his knowledge, Lazarus said, his city never reached certain negotiating milestones -- such as signing confidentiality agreements -- that Charlotte did.

NASCAR officials say the race was very competitive, with no decision made until the end.

"Had discussions with Charlotte not gone in the proper direction," said NASCAR Vice President Mark Dyer, "we could have gone another way."

But nothing in documents generated by the Charlotte team -- or in what has been publicly released by Atlanta or conveyed in interviews by that city's leaders -- suggests that the hall was anything but Charlotte's to lose, particularly after November.

The France family, which controls NASCAR, has built a reputation in the sports world for shrewd negotiating.

They kept Charlotte leaders guessing right up until the end, making them fear losing the hall even as city officials sat across the bargaining table from NASCAR -- and their rival cities remained in the dark.

Shrouded in secrecy

Secrecy is standard procedure for NASCAR, a sport controlled by a single family -- the progeny of founder "Big Bill" France -- accustomed to big deals with little or no public scrutiny.

"We're a private, family-owned company, even if we sanction a very public sport," said Dyer, who heads NASCAR's Charlotte office. The headquarters is in Daytona Beach, Fla.

Charlotte officials believed secrecy would help them, too, because other cities wouldn't learn critical details of their bid.

The city turned over some hall-related documents to the Observer last spring, detailing plans for what became a $150 million public project, mostly paid for with a hike in Mecklenburg County's tax on hotel rooms.

But officials withheld key financial statements, citing an exception in the state public records law allowing secrecy while recruiting businesses. Those documents were released only after the contract was signed.

Charlotte's effort began in early 2005, when NASCAR sought cities to build the sport's first official hall of fame.

Charlotte, Atlanta, Kansas City, Richmond, Va., and Daytona Beach sent bids May 31 and hosted August visits. Each offered to spend about $100 million on construction in hopes of bringing in more than $50 million a year in economic benefits.

All the cities have ties to racing. No matter the winner, NASCAR executives wanted to avoid hurting relationships.

"All five cities could do a great job," Dyer told the Observer in mid-October.

Suite-hopping for support

It's clear that by October, though, Charlotte and Atlanta were taking the lead. Atlanta had powerful corporate backing, prompting Charlotte leaders to worry that Home Depot founder Bernie Marcus, who gave $200 million for an aquarium, might do the same for NASCAR.

Charlotte had the strongest selling point: Even before submitting the bid in May, the city had persuaded state lawmakers to raise the tax on Mecklenburg County hotel rooms by 2 percentage points to pay for the hall.

Charlotte leaders say they knew a proposal with guaranteed money was their best shot. The city couldn't match the number of visitors Atlanta promised -- 1 million a year, to Charlotte's 400,000 -- but it could offer more solid funding.

"That put their project in a tremendous financial position," Dyer said this month.

The bankers, bureaucrats and boosters on Charlotte's team courted Dyer and other NASCAR licensing executives. Their offices are in Charlotte, allowing the city access to those running the selection process.

On Oct. 3, Mayor Pat McCrory took NASCAR's Blake Davidson -- Dyer's No. 2 man -- to Bank of America Stadium for a Monday night Carolina Panthers game. They had bad seats, McCrory recalled this month, so he gave Davidson a tour of the stadium's corporate boxes.

The next day, Davidson wrote two e-mails to Charlotte leaders. He asked Newman to schedule a three-hour meeting in Daytona Beach for later that month. And he thanked McCrory for their night on the town.

"I had a lot of fun," Davidson wrote, "and it was great 'suite-hopping' with you."

On Oct. 19, Newman, the mayor and Charlotte's other bid leaders -- including Luther Cochrane, a former Atlanta construction executive -- flew to Daytona on a Wachovia corporate jet.

At the airport afterward, they saw their Atlanta counterparts arriving for an afternoon meeting with NASCAR.

It was a significant moment: the only time during the process that Charlotte leaders were face to face with their competitors, whose moves they followed mainly through the newspaper.

An Atlanta developer who knew Cochrane called out, "Luther, what are you doing here?"

"They haven't told you?" Cochrane recalled joking. "Your meeting is canceled. We just inked a deal."

'The deal is ours'

The Charlotte team returned with high hopes. Newman, head of the Charlotte Regional Visitors Authority, met with Dyer and Davidson the next week.

Charlotte had addressed all concerns but one, Dyer and Davidson told him: Racing wanted a "backstop" -- a way to ensure that the hall would have enough money to succeed, at little or no risk to NASCAR.

Newman followed that meeting with a Nov. 2 e-mail to Davidson, saying, "If we can put this together, the deal is ours."

Davidson replied: "That is what has been conveyed to me."

Lazarus says that as far as he knows, Atlanta never reached a similar point with NASCAR. "No one ever said to me, 'If you do this, then you get it,' " he said.

Newman received more reassurance two weeks later, even as NASCAR gave the rest of the country a very different message.

It was the weekend of Nov. 12, and at a race in Arizona, NASCAR Chairman Brian France -- Big Bill's grandson -- discussed the hall publicly for the first time in months. All five cities were still under consideration, France said, and a decision wouldn't come until 2006.

That Monday, Newman sent another e-mail to Charlotte's NASCAR team:

"Took Mark Dyer to Chapel Hill Saturday for game and campus tour for his daughter and he indicated that while Brian's comments were the public face they would be taking a recommendation to NASCAR board today to get authorization to start negotiating terms with us."

Newman says now that he didn't think the contest was over. "There have been a lot of people leading races with 50 laps to go that didn't win," he said.

Charlotte heard in December: Racing was ready for serious talk.

A schedule? 'Oh, yeah'

The first week of 2006, Charlotte signed confidentiality agreements to prepare for exclusive negotiations with NASCAR. The next day, racing publicly cut Kansas City and Richmond.

"Things went from zero to 180 mph," said Wachovia executive John Tate, the Charlotte team's finance chairman.

NASCAR said Atlanta and Daytona were still in the running. But George Mirabal, president of the Daytona Beach/Halifax Area Chamber of Commerce, said his city never had any real talks with NASCAR after August.

"We never met face to face," Mirabal said this month. "And if there was any communication, it emanated from us."

Mirabal said he didn't feel misled that NASCAR kept Daytona in the race publicly while talking to other cities privately. "That's just the way the business works in economic development," he said.

Officials with Central Atlanta Progress and the Metro Atlanta Chamber, who led that city's bid efforts, wouldn't talk about their dealings with NASCAR. "It's basically old news," said spokesman Richard Orr of Central Atlanta Progress. "We've moved on."

Lazarus, who has negotiated long-term TV and Internet deals with racing for the Turner networks, says Atlanta suspected that NASCAR was talking with Charlotte but didn't know the extent of discussions. "They're a business, and we assumed that they were negotiating with multiple parties," he said.

NASCAR says it played fair. "You don't ever mislead or lie to anyone," Dyer said, "but you certainly can't divulge every step of the process."

In Charlotte, the lawyers designed loans with the banks -- the "backstop" NASCAR wanted -- and a licensing agreement.

Brian France made a quiet trip to Charlotte in January, checking out the proposed hall of fame site next to the Charlotte Convention Center, underscoring the seriousness of the talks.

Around the same time, the city and NASCAR had agreed to a negotiation schedule. Their target: a March 6 announcement.

"Did it feel great to hear that schedule? Oh, yeah," Tate said. "But I can assure you, it was not locked down."

Even if Charlotte won over the licensing office -- Dyer and Davidson -- local leaders still feared rejection from the NASCAR board, controlled by the France family.

Throughout much of the negotiations, city attorney Mac McCarley said this month, "We weren't dealing with anybody named France."

Atlanta strikes back

No matter how well the negotiations went, Charlotte always feared Atlanta's corporate muscle. "We knew that there was another taker there if we walked away," Newman said.

That concern blossomed into panic on Feb. 8, when Brian France visited Atlanta. He toured the new Georgia Aquarium, publicly marveling at all the visitors.

Marcus, the Home Depot founder, hosted a lunch for France with CEOs from the city's Fortune 500 companies -- companies that pump a lot of money into NASCAR sponsorships.

The CEOs made Atlanta's strongest pitch yet. "We talked to Brian about Atlanta's corporate commitment to the sport," Lazarus said. Executives made the point that "while the business of NASCAR may be based in Charlotte, many of those teams, when they're looking for funding, come to Atlanta."

France emerged praising Atlanta's foot traffic and Charlotte's guaranteed money.

One Charlotte fear turned out to be unfounded. No one in Atlanta offered to write a check to cover the cost of building the hall.

"Corporate Atlanta was not going to build this museum," Lazarus said.

But at the time, the Charlotte team didn't know that. And they met with Dyer the next day, worried about France's statements and convinced they were in trouble.

"If the decision had been made right there, we would have lost," said Bank of America executive Cathy Bessant. "We had the best deal, but lost the spiritual affirmation of the guy in charge."

Charlotte believed it had to get France back, so the team countered with calls and letters from the city's own heavyweights -- the heads of Wachovia, Duke Power and Bank of America. Negotiations kept moving.

NASCAR presented a draft contract to Charlotte on Feb. 17. Two days later, on the morning of the Daytona 500, a final round of talks began at the track.

Although exhausted, McCrory stayed after to watch the race.

At one point, the mayor recalled, he ducked out of the stands, napped in a tent, then returned to his seat.

"Where were you?" he recalls Newman asking him.

"Getting some shut-eye," the mayor said.

Bargaining in Ballantyne

On Feb. 21 -- two days after Daytona -- the lockdown began.

NASCAR rented an office suite in south Charlotte, and for six full days, racing executives and Charlotte's negotiators worked early mornings and late nights.

At times, the closed talks were so complex that negotiations were split into different rooms -- one each for licensing, finances and NASCAR's proposed office tower, which had become an integral part of the deal.

Dyer and McCarley, the city attorney, had some of the toughest discussions, those present said. In his notes on NASCAR's initial proposal, McCarley wrote that "the agreement as drafted is so one-sided as to seemingly treat us as though we're a common t-shirt licensee."

McCarley explained this month that he was concerned NASCAR's draft didn't treat Charlotte like a partner. It was based on NASCAR's standard licensing deals, giving Charlotte very limited rights to use the sport's logo and related trademarks to promote the hall.

The final version negotiated by the city gives the hall of fame access to all of NASCAR's logos -- past, present and future -- as well as video footage and other archival material that will be used in the development of the hall.

That gives Charlotte unprecedented access to the NASCAR brand, McCarley says, making the city an equal partner.

'We are a go'

The result of the negotiations: 300 pages ready for approval by NASCAR's board and Charlotte. The City Council OK'd the deal in closed session Feb. 27.

Still, the threat of Atlanta wouldn't go away. As the Observer began to report that Charlotte would get the hall -- a week before an announcement was made -- Atlanta made a final push.

Mayor Shirley Franklin said her city would up its pledge from $5 million to $77 million.

With an unsigned contract, Charlotte wasn't sure how to respond, Newman said. Privately, though, NASCAR said Atlanta's last-minute push wasn't enough.

"Mayor just spoke with Brian France," Newman wrote in a Feb. 28 e-mail, "who said we are a go for Monday. He is handling Atlanta's resistance and we have no worries there."

Despite that, NASCAR was still denying publicly that it had made a choice. President Mike Helton said on March 1 that there was no decision, and a NASCAR spokesman told the Atlanta Journal-Constitution on March 3 that nothing had changed.

In Charlotte recently, France said that in his mind, the decision wasn't final until the weekend before it was announced.

"It was very competitive right up until the end," he said.

As hundreds watched in Charlotte on March 6, France made the announcement -- and McCrory pulled out the contract, getting France's signature as quickly as possible.

"You didn't see a smile crack on my face," Newman said, "until Brian got up there and signed his name on that contract.

"I didn't believe the thing was ours until then."

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How We Got the Story

The Observer reviewed more than 17,000 pages of hall of fame-related documents, provided by city officials and the Charlotte Regional Visitors Authority under the N.C. Public Records Law, and interviewed key players from Charlotte and NASCAR to produce this story.

The documents, which include e-mails, draft contracts and presentations to City Council, were withheld by the city during the negotiation process.

Officials cited an exemption in the public records law related to economic development projects. Once a contract was signed, the exemption no longer applied, and the city turned over the records in response to the Observer's request.

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PUBLISHED BY: THE CHARLOTTE OBSERVER