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Archive for September, 2012

10 questions

The N&O’s Rob Christensen has a list of five questions each for Walter Dalton and Pat McCrory that he hopes they are asked when they debate later this week. A sample:

For Dalton:
The Republicans have tried to tie you to Democratic Gov. Bev Perdue. You say you are your own man. Name three things in which you disagree with Perdue.

For McCrory:
You want to cut corporate taxes and lower the top rate on income taxes and eliminate the inheritance tax. You say you want the tax changes to be revenue neutral. How do you cut those taxes without raising taxes on the middle class?

I would be must interested in hearing their answers to those questions and the rest that Christensen suggests.

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Charlotte street car line. Again.

The Charlotte City Council is now back to discussing its capital plan, with Mayor Anthony Foxx and City Manager Curt Walton thinking city residents are underataxed. Their proposed solution to all that ails the city is to essentially double down on existing policy. Charlotte’s failings in their view, you see, is that despite already having the highest local government in the state for any city with a population of 25,000+ is that we as community haven’t built enough stuff. The city needs more of your money so that economically it can keep up with communities like those in the Triangle that tax its citizens less than we here in Charlotte/Meckelnburg do.

And at the core of the debate is the city’s proposed street car line.

Let’s be clear here: The idea of covering the construction costs and operating losses of a transit line outside of the framework of the county-wide dedicated sales tax for transit is simply an absurd piece of public policy. There’s no way to hide that this is nothing more than a piece of pork for a favored constituency as a reward for keeping the transit tax in place.

It’s unclear why the city needs more rail lines now given that the existing Blue Line hasn’t exactly revitalized South Boulevard and work will soon begin on an extension to UNC-Charlotte.

While there are some local politicians who see the danger that a high cost of government presents, as many don’t consider this to be a serious issue. Which is scary indeed.

Bonus observation: Some of the ideas being thrown around to limit the size of a property tax increase to fund the street car line are every bit as bad — if not worse — than simple funding it through property taxes. In particular, using TIFs would be risky move that would almost certainly create the need for additional tax increases down the road even if itby some miracle it draws new development near the street car line.

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Hood on the politics of tax reform

Interesting column here. Highlight:

Meanwhile, Democratic Walter Dalton… is running against fundamental tax reform. He opposes applying the sales tax to services. He wants to make the corporate income tax even more complicated, and preserve the kind of targeted tax credits for politically favored businesses that have failed to strengthen North Carolina’s economic competitiveness.

Dalton is doing this not because he truly thinks the past 20 years of tax reform debate has been wrongheaded. He’s doing this because he is desperate, and because it is easier to scare voters with misleading rhetoric than it is to explain how the various elements of a reform package would work together to make the tax code fairer, more efficient, and less harmful to economic growth.

I doubt Dalton’s gambit will work. Even if Barack Obama wins North Carolina again, McCrory will likely be the next governor. But McCrory and legislative leaders need to keep this in mind: Tax reform is much easier said than done. That’s why it hasn’t yet been done. The interest groups that derive benefits from the current system will fight tooth and nail to preserve it. And opportunistic politicians will play along.

Please plan accordingly.

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DCA has extra runway capacity

Flight Global is reporting that Ronald Reagan Washington National airport (DCA), one of the four major airports that uses a slot-system to limit flights, actually has unused runway capacity:

Unused runway capacity at Ronald Reagan Washington National airport could be used to add additional flights, finds the US government.

The Government Accountability Office (GAO) found that there were only about 53 take-offs and landings per hour in April 2012 compared to a maximum capacity of 67 movements, in a report looking at the impact of eight new beyond-perimeter slot pairs at National on the Washington DC area airports that was released earlier this month.

The shortfall is attributed to a decline in general aviation and unscheduled flights after the 11 September 2001 terrorist attacks, according to the report. There were on average 17 of these movements per day in 2011, which is down from about 210 prior to 2001.

What DCA does not have though is adequate terminal capacity to handle more flights, but that’s something that can be addressed.

CLT impact: US Airways is the dominate carrier at Reagan National. Should extra slots be created at DCA, some would likely go to US Airways. The aircraft to fly those routes would have to come from somewhere, and there are only three options: Charlotte, Philadelphia, or Phoenix, with Charlotte being US Airways’ largest hub. Of course, extra DCA slots could also help push the airline to order more planes…

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Bloomberg Businessweek on Jim Rodgers

And the Duke/Progress merger mess. Worth a read here.

H/t: MK

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Meanwhile outside Atlanta

Another baseball stadium that hasn’t brought about the anticipated economic development impact. And a AAA facility no less. As the Atlanta Journal-Constitution reports:

Coolray Field, home to the Atlanta Braves’ AAA affiliate, has cost more and brought in less revenue than commissioners expected when they approved its construction in 2008. The cost of the stadium rose from $45 million to $64 million. And though Gwinnett officials said the stadium would pay for itself, they later approved a 3 percent car rental tax to help repay the $33 million stadium debt. Even that might not be enough.

H/t: JAT

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Jerry Orr’s latest delusion

Circling back around to a recent UPoR article on the airport’s proposal to build another runway and some terminal upgrades. Going through what Jerry Orr’s talking about point by point:

• $160 million for a new runway, the airport’s fifth runway and fourth parallel runway. It will be 12,000 feet long to for allow departures “deep into Europe or the Pacific rim.” At the same time, the UPoR notes “There are no firm plans now to add more Europe flights or to start Charlotte’s first non-stop flights to Asia.” This runway will also lessen noise complaints.

Analysis: A 12,000 foot runway has been on Jerry Orr’s agenda for a very long time. The justification given is a bit silly though. US Airways already flies to Rome from Charlotte — not sure how much deeper into Europe you can get than that. There just isn’t a much of a market for flights to the Balkans… The Asia reference is just as unrealistic — US Airways doesn’t even currently have planes that have the range to fly to Asia and has already stated that that Philadelphia will be their gateway to Asia when they do acquire them from 2017. A better argument would be that the longer runway allows additional payload on existing flights to Europe, particularly during the summer months.

Note the rapid timeline for construction of the the proposed new runway. That comes because the airport already has most of the necessary environmental approvals. Here’s Orr addressing the topic at the December 2009 Airport Advisory Committee Meeting right after the third parallel runway had been finished:

The new runway we just completed was originally planning to be located 1,200 feet separation from the other parallel runway. That’s 1,200 from centerline to centerline of the runways. That’s the standard for separating arrivals and departures. By giving the runways 2,700 feet of separation, allowed us three streams of dependent approaches. We did the environmental work on that and got it approved. In the ensuing time of doing all this work, we learned from the FAA that the distance between runways for independent approaches had been adjusted so we then moved the new runway to 4,300 feet separation, which is what the separation is between the new runway and the westerly parallel runway. That is why it is so close to the interstate and it leaves us room to come back and build that additional parallel runway so that we can separate landings and departures.

Runway 18R/36L beside I-485 is used almost exclusively for landings. The idea would be to build an additional runway for use for takeoffs, those taking some of the traffic off the other two parallel runways (18C/36C and 18L/36R), thus lessening noise complaints by people in the southern part of the county like eight miles from the airport complaining about 300 planes a taking off directly over their house because the navigation procedures (RNAV) now in place.

What is new is which runway would be 12,000 feet long. The previous plan was to extend the current center runway. Now it sounds as if the proposed fourth parallel would be built as a 12,000 footer.

• And the terminal upgrades. From the Observer article:

The airport has long planned to build a new international concourse on the surface parking lots for rental cars, just north of Concourse A. Orr said that project will be built when there is demand.

But he said Monday he plans to build a small portion of that new international concourse, which would be initially used for domestic flights by Delta, United and Southwest. The four new satellite gates would be connected to the main terminal by a new walkway.

“Delta wants another gate. United wants another gate. Southwest wants at least two gates,” Orr said. “There is a clear need.”

Analysis: A new international terminal has been on the airport’s to-do list since the late 1990s. The problem is there isn’t enough demand to justify it. Concourse A, which houses pretty much all the airlines besides US Airways, has 12 gates and can’t be expanded any more. Thus the need for a small amount of additional space for the non-US Airways opertors. The airport could probably move JetBlue, which is on Concourse D, over there as well, giving US Airways a little more room.

• And lastly from the UPoR article:

Depending on need, Orr said he will soon build either a 15-gate expansion of Concourse E or a new 11-gate “dog-leg” expansion of Concourse B.

If US Airways needs room for larger, mainline aircraft, Orr said he would expand Concourse B. If the airline needs space for smaller, regional jets, he would expand Concourse E.

“We could build that tomorrow,” Orr said, referring to the new gates for regional jets.

: Concourses C and D, like Concourse A, can’t be expanded anymore. So if US Airways needs more domestic gates, it has to happen on Concourse B or Concourse E. The B expansion has been talked about since the late 90s. In either case, the proposed extensions would complete the concourse. The fundamental problem though, which Orr fails to realize and/or admit, is that US Airways is not expanding. The airline is not adding planes and just got done realigning its route system during its transformation into a four-hub carrier. If US Airways had a pressing need for more gates, they’d have already asked Orr to build them some more. Which they actually did, requesting the city add a couple more gates on Concourse E (these gates are now complete — Orr’s proposal goes beyond that).

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How much will it cost to redevelop Eastland?

The UPoR has a story today about a proposal by “Charlotte movie executive Bert Hesse” to redevelop Eastland Mall into a film studio. The money quote:

“It will take something big to turn the area around,” Hesse said. “A new Kmart isn’t going to do it. A Wal-Mart isn’t going to do it. It will take $150 million.”

Which, interestingly, enough, is the amount Hesse’s group is talking about. Unfortunately, that’s also about where the specificity runs out: The proposal includes “a film studio, offices, and possibly a hotel.” Possibly a hotel? Really well-defined business plan there…

And more to the point, exactly how much public money is included in that $150 million? Hesse essentially asked for the land on which Eastland sits for free and asked the city to pay for demolish the mall. Beyond that it’s anyone’s guess. Expect the number to be in the tens of millions of dollars though.

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York on the presidential race in North Carolina

The John Locke Foundation held an election preview discussion panel discussion in Raleigh earlier this week. Among those featured was Bryon York, chief political correspondent for The Washington Examiner. Armed with some additional on-the-ground knowledge, York writes today on the presidential race here in North Carolina, arguing that holding the DNC in Charlotte did not held President Obama in the state:

“We’re going to play big,” top Obama adviser David Axelrod said when the choice was announced. “We’re certainly not going to hunker down.”

But it’s not working out. Of all the swing states playing key roles in the 2012 presidential race, North Carolina is the only one in which Obama is trailing Republican Mitt Romney. According to the RealClearPolitics average of polls, Romney leads Obama by 4.8 percentage points in North Carolina — and the convention had little or no effect on that margin.

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More on Bank of America Stadium upgrades

The Charlotte Observer has some new information on the Carolina Panthers’ plans to remodel Bank of America stadium. The actual study the team has commissioned should be done by the end of the year. But even before that, the spin has begun. And some of it is amazingly stupid.

Let’s start City Council Member James Mitchell, who apparently understands nothing of the basics of negotiations:

Democrat James Mitchell, who chairs the economic development committee, said he supports helping the Panthers financially.

“We have established a model – whether it’s the Bobcats or the Knights – that we will invest or participate in some way,” Mitchell said. “I won’t shy away from that.”

As the UPoR correctly notes, the reality is that state and local governments typically end up footing part of the bill for NFL stadium upgrades. But there’s absolutely no reason for elected officials to commit to picking up part of the tab without seeing and understanding what the Panthers propose to do. It just weakens your position at the bargain table.

Then there’s the timing of it all, which is not too good for city officials. Mayor Anthony Foxx is pushing for a big capital spending plan that would be funded by a substantial property tax increase. Whatever amount the city ends up contributing to the stadium upgrades will come in addition to that, and will result in further tax increases. The uncertainty with the Panthers situation thus is a very good reason to wait with the city’s capital budget planning. Somehow I doubt Foxx sees it that way though…

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