Towns discover chamber has veto power on VLN
by Staff Writer
CORNELIUS – Negotiations between the three north Mecklenburg County towns and Visit Lake Norman have stalled again, after attorneys found an issue that halts any potential deal.
Town attorneys discovered the Lake Norman Chamber of Commerce controls appointment of Visit Lake Norman directors and has the power to veto any changes the Visit Lake Norman board might agree to. That caveat was written into the tourism agency’s articles of incorporation, and no one in the negotiations realized the chamber had such power in the relationship.
During closed sessions Monday night, Cornelius and Huntersville town board members learned of the new problem and instructed attorneys to draft changes in Visit Lake Norman’s articles of corporation.
When called for comment, Chamber President Bill Russell responded in an email: “I am aware of the provision in the Lake Norman Convention & Visitors Bureau (Visit Lake Norman) Articles of Incorporation, however, the Lake Norman Chamber of Commerce has no comments at this time.”
Visit Lake Norman Executive Director Sally Ashworth and Visit Lake Norman attorney Cathy Bentz did not return calls for comment from the Herald Weekly.
Cornelius Town Manager Anthony Roberts said the towns want to eliminate the chamber’s control and restructure Visit Lake Norman’s governing boards.
Town attorneys discovered the chamber’s authority over Visit Lake Norman after negotiators for the town and the tourism agency were close to an agreement on a new interlocal agreement. The last agreement expired June 30.
The proposed agreement would have settled how the three towns distribute tourism taxes to the tourism agency and also change Visit Lake Norman’s board of directors and executive committee – giving the towns authority to appoint half of both boards, according to Roberts.
Currently, the towns appoint only three members of Visit Lake Norman’s 16-member board, and the towns have no representation on the executive committee.
For the past three years, the towns have provided 28 percent of a hotel occupancy tax and 25 percent of a prepared-food tax to the tourism agency.
Fearing the towns might try to reduce funding, business leaders went to the legislature – and House Speaker Thom Tillis – to change the law and guarantee the funding for Visit Lake Norman.
Even as Tillis pushed the legislation through, documents surfaced showing tax revenues going to Visit Lake Norman paid 85 percent of the chamber’s annual mortgage payment in 2009 and 2010 and covering 70 percent of the mortgage this year. Visit Lake Norman rents space in the chamber’s Catawba Avenue building, and town officials have questioned if the tourism agency couldn’t find less expensive offices. Tourism and chamber leaders have said they were conducting a study office rental rates, but Visit Lake Norman hasn’t released the study.
The law guaranteeing the tourism taxes to Visit Lake Norman appeared to take any control out of the towns’ hands until town officials realized the law doesn’t say when the towns have to hand over the tax revenues. The towns could hold the taxes until the last day of each year.
When town managers raised this issue, Visit Lake Norman leaders agreed to resume negotiations on a new interlocal agreement. Roberts said he and town managers Greg Ferguson and Leamon Brice thought they had reached an agreement on a new governing structure with Ashworth, Bentz and Randy Marion.
Then, attorneys discovered the new obstacles in Visit Lake Norman’s articles of incorporation:
• Article VII says, in part: “The election of the directors … shall be subject to the approval and consent of the board of director of the … Lake Norman Chamber of Commerce.”
• Article XII says: “Any amendment to the articles of incorporation or the bylaws … shall also require the approval and consent of the board of director of the … Lake Norman Chamber of Commerce.”