Economic impact of HB2 continues

Could cost state $5 billion a year, report finds

When it comes to North Carolina’s economy, HB2 is the curse that won’t stop cursing.

The loss of the 2017 NBA All-Star Game is just the latest in a series of blows that have come in the wake of Gov. McCrory signing the discriminatory HB2 into law.

The inability to find a compromise between the state and the NBA, who had threatened on multiple occasions to pull the game from Charlotte unless suitable changes were made, means the loss of approximately $100 million, according to the Charlotte Regional Visitors Association.

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Related: Lawmakers take half a million dollars from disaster relief for HB2 defense

The NBA has said that they will consider bringing the game back to Charlotte in 2019 if the situation around HB2 were to be remedied by then.

The list of concerts, conferences and companies that have pulled out grows longer every month, and includes such names as Bruce Springsteen, Pearl Jam, Ringo Starr, Demi Lovato with Nick Jonas, Cirque du Soleil, PayPal, Deutsch Bank, Lionsgate, Community Transportation Association of America and the W.K. Kellogg Foundation.

Many cities and states have also banned non-essential travel to North Carolina.

The decision by the W.K. Kellogg Foundation not to bring their conference to Asheville after the passage of HB2 was among the biggest hits suffered by the Western North Carolina region. It contributed to Buncombe County alone suffering a loss of $1 million in hotel bookings in the months immediately following the passage of HB2, Stephanie Pace Brown, executive director of the Asheville Convention Center and Visitor’s Bureau and a senior vice president with the Asheville Area Chamber of Commerce told Carolina Public Press.

Other events are on the line as well, as the NCAA has stated that they are beginning to take laws like HB2 into consideration when they consider host cities for their tournaments. The PGA of America decided not to move the 2017 PGA Championship from Quail Hollow Club, in Charlotte, N.C., but released a statement opposing the bill and saying that their decision to hold future events in the state will be “severely impacted unless HB2 is overturned.”

Then there are the harder to quantify numbers, like how many companies will now skip even considering expanding into North Carolina. Or the effect this law may have on recruiting young talent into the state.

The biggest losses from here on out may be silent ones.

A recent report by The Williams Institute, a think tank at the University of California, Los Angeles School of Law, estimates that HB2 could cost the state a staggering $5 billion a year.

Related: Gov. McCrory heckles only openly gay NCGA over loss of NBA All-Star Game

To arrive at this figure, they looked at the risk of losing federal funding, since the U.S. Department of Justice has made clear that it maintains the right to withhold those funds on the basis of sex discrimination, as well as a number of other categories.

These include: loss of business investment, reduced travel and tourism, litigation and enforcement costs, bullying in schools and workplace discrimination, which could affect graduation rates, retention of employees, productivity and recruitment.

Developer and Quail Hollow President Johnny Harris told the News & Record that when he was in California recently all anyone wanted to talk about was HB2 and what was going on in the state. He said they asked why the state seemed to suddenly be moving backward, after building up a reputation as one of the more progressive states in the South.

“It clearly has a negative impact,” he said. “Anyone who thinks it doesn’t is wrong. I’ve been saying to anyone that would listen to me from the very first day that it’s a train wreck.”

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He believes it will have a serious impact on the state’s reputation and will affect whether companies decide to relocate here.

“For every one that’s still coming, there are probably ten that aren’t,” he said.

The All-Star Game was expected to sell out the Charlotte region’s 33,000 hotel rooms, according to Sid Smith, executive director of the Charlotte Area Hotel Association, plus the ballrooms and other spaces that would have been rented out for parties.

The Mint Museum was holding the entire week of the All-Star Game, at both Mint Museum Uptown and Mint Museum Randolph.

“It is quite common for us to hold a venue and date for a client, but it’s not as common for us to hold an entire week, at both museums, and all venues,” said Chelsey Sanderson, special events manager at the Mint Museum. “The last time this happened was probably for the DNC [Democratic National Convention] back in 2012.”

“It’s hard to put an exact dollar amount on how much business was lost,” Sanderson continued. “But at this point, it’s pretty safe to say that we lost not only the NBA’s events, but a lot of the clients that we turned away, because we were holding spaces for the tournament.”

Since many of the types of events they usually host at the museums are booked well in advance, there is a concern that it will be difficult, if not impossible, to get most or any of those clients back. It is revenue that will be missed.

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“A couple of really solid events during All-Star week would have been a huge contribution towards our annual revenue goal,” she said. “There’s still about six months until the dates come up, so we have time, but it still hurt us to hear the news about the tournament being pulled.”

It seems until HB2 finally goes the way of so many discriminatory pieces of legislation before it, North Carolina will be paying for its sins against civil rights.

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Posted by Jeff Taylor / Social Media Editor

Jeff Taylor is a journalist and artist. In addition to QNotes, his work has appeared in publications such The Charlotte Observer, Creative Loafing Charlotte, Inside Lacrosse, and McSweeney’s Internet Tendency. He graduated from the State University of New York at Brockport and has lived in Charlotte since 2006.@jefftaylorhuman.