On the heels of South Carolina lawmakers speaking out against the Panthers halting the construction of the Panthers’ headquarters in South Carolina, GT Real Estate Holdings, LLC (“GTRE”)—Panthers owner David Tepper’s real estate holding company—has terminated its agreements with the City of Rock Hill. Specifically, the termination is due to City’s failure to issue bonds “or provide the funding for the public infrastructure for the project.”
On March 18, GTRE sent the City a default notice. Article XI of the “Amended and Restated Finance and Construction Administration Agreement” between the City and GTRE gave the City 30-days to cure any default. To date, the City has not provided the bonds nor any other public infrastructure funding (although the City maintains the position that the City was ready to issue the bonds).
Instead, on March 21, York County passed an alternative fee arrangement, which, if GTRE agreed to it, would have allowed the County to reimburse GTRE through property tax credits over a 30-year period. The City passed a resolution supporting York County’s proposed arrangement.
Apparently, GTRE was not satisfied with the alternative arrangement, likely because it would require GTRE to pay the $225 million upfront. On top of the City and County’s failure to adhere to the original deal, South Carolina lawmakers began expressing their frustrations with the Panthers’ pausing construction, to which the Panthers responded by stating, “[i]t is unfortunate that some recently decided to conduct a misguided, destructive public relations campaign to obscure their failures.”
All of this added up to the Panthers terminating their agreements with the City. Importantly, the agreement does contain an arbitration provision (Section 11.4) for disputes over bond-funded infrastructure, which allows for an expedited resolution and avoids a public lawsuit. However, the City has an uphill battle to climb due to the City admitting to failing to supply the infrastructure bonds.
For now, the Panthers are open to coming to the table to reach a resolution on termination and avoid a drawn-out dispute. On the other hand, lawsuits against NFL teams are not uncommon. Although different circumstances, just last year, the NFL and the Los Angeles Rams settled their lawsuit with the city of St. Louis, shelling out $790 million in the process. Even though the City failed to supply the bonds, the City could try a similar lawsuit.
One thing is for sure, this chapter in the Carolina Panthers’ history will not be over soon.