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The RNC Is Gone, Leaving Charlotte to Sort Out Millions in Contract Liabilities

June 17, 2020by Jim Morrill, The Charlotte Observer (TNS)
The Republican National Convention was to be held at Charlotte's Spectrum Center starting Aug. 24. (David T. Foster III/Charlotte Observer/TNS)

CHARLOTTE, N.C. — The decision to move the Republican National Convention to Jacksonville, Fla., has left Charlotte’s host committee with “tens of millions” in contractual liabilities, the committee’s CEO said Monday.

Republican officials announced last week that they’re moving most of the August convention, prompting the host committee to lash out over what it called “broken promises.”

“I’ve got contracts that are a couple inches thick of what people promised to do and they’ve breached them,” CEO John Lassiter told the Observer. “Now we’re trying to figure out how you work through the wind-down on an effort we’ve been focused on for two years.”

The host committee, along with the RNC’s Committee on Arrangements, has been working on the convention ever since it was awarded in July 2018.

The convention is moving after Democratic Gov. Roy Cooper told President Donald Trump last month that continued concerns about the coronavirus meant he couldn’t guarantee that delegates and their guests could fill Charlotte’s Spectrum Center in August. That prompted Trump to tweet that he would take the convention elsewhere.

The convention is scheduled to run Aug. 24-27. Only the first day will be in Charlotte, though the RNC says it will hold other business meetings in the city the weekend before with about 330 delegates, out of about 2,500. The traditional convention speeches and pageantry will be in Jacksonville.

In a statement Friday night, the city of Charlotte said it plans to “hold the RNC accountable to fulfill all its outstanding obligations to the parties and make them whole.” City Attorney Patrick Baker has said the city has spent about $14 million on the convention but expects to be reimbursed through a federal security grant. Much of that money reportedly was spent on insurance.

It’s the host committee that could be on the hook for more.

The committee was charged with finding venues and vendors for a big delegate welcoming party and what was once expected to be 1,200 separate events related to the convention. The committee had already recruited 12,000 volunteers from around the country, Lassiter said. And it had planned to raise around $70 million.

One contract called for the host committee to pay $5.5 million for the use of Spectrum Center.

“We’d indicated publicly that we (already) raised over $50 million, a lot of that comes in over pledges,” said Lassiter, a former Republican city council member. “We do not have enough cash on hand to pay all current obligations.”

Those obligations include leases on apartments and agreements with contractors who were going to renovate the Spectrum Center by raising the floor and building a stage and produce a four-night TV spectacle.

Lassiter said some money — he wouldn’t say how much — already has been spent. The committee is still contractually obligated to pay more. The committee has paid at least partial deposits on dozens of venues.

Some of Charlotte’s largest corporations are among the convention donors. Speaking to shareholders this spring, Duke Energy CEO Lynn Good called the convention “a great opportunity to bring economic development to our headquarters city here in Charlotte, North Carolina.”

It’s unclear how much the company pledged. A Duke spokesman says there are no plans to ask for it back.

The host committee is in ongoing talks with donors as well as vendors and other parties to the contracts, Lassiter said. While there remain many things to unravel, he said, one thing is clear.

“Their money will not go to Jacksonville,” Lassiter said. “We will not be sending any money or services to Jacksonville. We’re done spending money on this convention.”

The convention was expected to generate more than $150 million in revenue for the area’s restaurants, bars and hotels still reeling from the COVID-19 pandemic. The host committee alone had signed on more than 200 restaurants, bars and other venues.

One Charlotte City Council member said he hopes there’s still a way to help them.

Republican Tariq Bokhari said he believes donors would still be willing to help the area’s hospitality industry.

“I think it 100% could be used for that,” Bokhari said. “And the question is, is there the appetite and will there to do it … .How can we come together now locally to support local?”

RNC spokesmen could not be reached Monday.

Lassiter said he’s confident things can be resolved.

“We plan to be made financially whole,” Lassiter said. “We negotiated our contracts right at the outset.”

———

©2020 The Charlotte Observer (Charlotte, N.C.)

Distributed by Tribune Content Agency, LLC.

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