The Panthers-Rock Hill project stalemate: What we now know about the deal
The Panthers halted construction on its headquarters project in Rock Hill more than a month ago. The Charlotte-based NFL team’s owner, David Tepper, has remained silent in what has become a high-profile disagreement, while Rock Hill officials have defended the city’s expertise in successfully executing multi-million dollar projects.
Meanwhile, York County has presented an alternative financial package to salvage the project.
Several state and federal politicians have weighed in. Some are frustrated. Others are hoping a resolution is soon reached.
If you drive along Interstate 77 near the Panthers’ planned site, the only activity you’ll see is work on a new interchange.
It’s not totally clear at what point the deal went wrong, but here’s what The Herald knows:
A new deal is on the table.
On March 21, York County Council passed a resolution that would commit the county to enter a fee agreement with the team.
Under the county’s resolution, the Panthers would receive incentives for four decades in exchange for completing $225 million of public infrastructure at the site.
The $225 million in bonds was part of the agreement with Rock Hill.
The city is in favor of the county’s plan.
Rock Hill City Council, on March 28, passed a resolution in support of the county’s alternative agreement.
The city, county and Panthers would need to release one another from the existing incentive deal in order to move forward with a new one.
The city’s resolution gave the county and GT Real Estate Holdings, which represents the Panthers, the go-ahead for all three “to enter into agreements, mutual releases and future approvals as contemplated by the county resolution.” A new plan would be “subject to final approval of city council,” the resolution says.
The city and county are waiting to hear from the team.
On April 1, York County said in a statement that it was awaiting word from Tepper and GT Real Estate on the future of the construction, including acceptance, or rejection, of the county’s proposed financial plan.
A spokesperson for the city told The Herald Thursday that Rock Hill has not received any additional information from the Panthers and hasn’t had any further contact with the team.
A spokesperson for York County told The Herald Thursday that the county also has not received an update.
The team claimed Rock Hill was behind on payments.
In early March, Tepper Sports, which represents the Panthers, announced a pause in construction on the Rock Hill project due to missed payment deadlines. The first phase of construction was set to be completed in 2023.
“To that end, while GT Real Estate Holdings, LLC has invested more than $170 million into the development in Rock Hill, our partners have been unable to contribute the agreed upon investment to fund the construction of the public infrastructure,” Tepper Sports said in a statement in early March.
Rock Hill insists it is not behind on payments.
In early March, Rock Hill said in a statement that the city has met all obligations required under the agreement and was unaware of a planned pause in construction.
Mayor John Gettys, at a March 14 city council meeting, pushed back on accusations that the city missed payments.
“Any implication by the Panthers that the city did not do its absolute and professional best is simply not true,” he said.
There was a delay in issuing the bonds.
City manager David Vehaun said, at the March 14 meeting, that the Panthers slowed Rock Hill’s ability to issue the $225 million in bonds.
Before Rock Hill could issue the bonds, the city needed specific details from the Panthers, such as development and financial plans, to provide to potential investors, Vehaun said.
“The Panthers were not submitting enough details in the way of development plans and other checklist items that … were going to be necessary to issue the bonds,” Vehaun said.
The city never received sufficient details from the team, a spokesperson told The Herald.
The city was ready to issue the bonds.
As part of the original agreement, Rock Hill pledged 100% of its tax revenues from the site. The city, in exchange, insisted that it would not “backstop” — or guarantee — the debt.
But the Panthers repeatedly requested that the city do just that, Vehaun said.
“I would tell you from our very first meetings in 2019, we were very clear that the city would not, could not, and should not backstop this debt,” he said.
As a result, Vehaun said the Panthers continued to look at other options to deal with the funding. Other options included the May 2021 attempt by Panthers Chief Operating Mark Hart asking York County for help. In a letter, Hart wrote that the Panthers were concerned that without the county’s assistance, the city would not secure the bonds.
However, by the end of 2021, Vehaun said Rock Hill reached a point with the team that would allow the city to proceed with issuing the bonds.
“We felt that everybody was on the same page, including the Panthers,” he said.
And in early 2022, Vehaun said the city was about two weeks away from issuing the bonds when the Panthers asked the city to stop, and indicated that the team wanted to “try additional things to get the debt issued.”
This isn’t the city’s first time negotiating a large deal.
Vehaun said the team has projected the 240-acre property to be a $500 million investment. And the city’s Riverwalk, a 1,008-acre development, also was a $500-$600 million project, Vehaun said.
“We’re familiar in dealing with these kinds of projects and these sizes of projects, but we need to do it on terms that make sure the city’s financial credit is protected,” he said.
The city agreed to issue more than $10 million in bonds for the Riverwalk development, but Rock Hill required that the developer put the property as security, Vehaun said.
“If the taxes generated from the site were not sufficient to retire the debt, then the developer said, ‘I’ll write a check to cover the difference between the shortfall, and if I fail to do that, I’ll hand over my entire site to the city,’ which we would take and sell to someone … to get enough money to retire the debt and pay the debt off,” Vehaun said.
The city has used that model for several multi-million dollar projects, Vehaun said.
“That model of asking developers to make sure that we’re covered is the same model we did at Fountain Park,” he said. “It’s the same model that we did at University Center. It’s the same model we’re in discussions with other development opportunities.”
The city is not at financial risk with the project.
As part of the original deal, Rock Hill agreed to put all the tax revenues from the site back into the project for public infrastructure, Vehaun said. He pointed out that the city isn’t missing out on future taxes that Rock Hill “expected to do other things in the community with.”
“That was really the only financial commitment that we’ve made to the Panthers in that respect up until now,” he said. “The city is not financially at risk with anything that happens out there.”
Lawmakers have voiced concerns.
U.S. Rep. Ralph Norman released a statement Sunday urging Tepper to be transparent with taxpayers and local officials. Norman, who’s been a Rock Hill real estate developer for decades, said in the statement he’s not “seen this degree of uncommunicativeness.”
“Each passing day that Tepper Sports declines comment only results in more rumors, more speculation, and more anxiety over catastrophic losses for our community should this venture fall apart,” Norman said.
S.C. Rep. JA Moore, D-Charleston, said in a statement Wednesday that he initially voted against giving millions in state tax incentives to fund the project for fear of a situation like this.
“We need to invest in smart economic development that benefits taxpayers and promoted economic growth, not make billionaires wallet’s bigger,” Moore said.
On Tuesday, S.C. Gov. Henry McMaster told reporters in Greenville, S.C., that he’s spoken to Tepper about the situation.
“He explained it as a pause,” McMaster said. “I look forward to that pause being over with and we can get on going.”
This story was originally published April 15, 2022 at 9:46 AM with the headline "The Panthers-Rock Hill project stalemate: What we now know about the deal."
