A review of the NASCAR Hall of Fames commitments for sponsorships shows projected revenue is declining significantly, dropping from $1.5million in 2012 to $110,000 for the fiscal year starting in July.

The loss of sponsorship revenue could further explain why Bank of America and Wells Fargo recently agreed to a deal in which they would forgive $17.6million in interest and principal from a Hall-related loan in exchange for a $5million payment.

The reason: The banks chances of getting their money back were more grim than the city outlined to City Council.

When the city made a presentation to council members in January, Deputy City Manager Ron Kimble said it would take about 40 years to pay off the $19.1million loan, at the present rate of sponsorship revenue, which he said was about $500,000.

The $19.1million loan was to be paid back from the sale of commemorative bricks and sponsorships, and the banks had no other source of collateral.

But unless the Hall is able to increase sponsorships, that 40-year window outlined by the city would have been a mirage.

At the rate of $110,000 a year, the Hall would have fallen further and further behind because of accumulating interest.

In addition, the Hall also has financial obligations to its sponsors, which include free facility rentals and tickets. In fiscal year 2014, that cost the Hall just less than $93,000.

Tom Murray, chief executive of the Charlotte Regional Visitors Authority, said the Hall now is focused on selling new sponsorships to help its bottom line. Under the deal reached with the banks, all sponsorship money in the future can go to pay the Halls bills.

But he said it will be a challenge.

We dont think we will be selling sponsorships at the $1million range, Murray said during an interview. The sponsorship world in general is challenging today. (Businesses) are looking for more of a return on their investment.

Some of the Halls initial sponsors, such as Belk, Sunoco and M&M, have let sponsorships expire.

Two of the biggest Hall of Fame sponsors were Bank of America and Wells Fargo, which each paid $150,000 last year. Under the deal reached with the city, the two banks will continue to sponsor the Hall but wont have to pay.

Kimble told council members that the agreement that sponsorship money will support Hall operations along with royalties that no longer have to be paid to NASCAR will help the Hall come close to breaking even.

It can almost bring the Hall to a break-even proposition, Kimble said.

For the sport overall, Sprint announced last year that it would end its sponsorship of NASCARs premier Cup series after the 2016 season.

Aside from that decision, NASCAR just completed a search for another sponsor, announcing a 10-year deal in September for Comcasts Xfinity brand to sponsor its second-tier series beginning this season, replacing Nationwide Insurance.

Nationwide elected to direct its involvement in the sport to the Cup series, where it will sponsor the sports most popular driver, Dale Earnhardt Jr., in several races this season.

In addition, Camping World, which sponsors the Truck series, recently announced it had extended its partnership with NASCAR through the 2022 season.

Overall, NASCAR officials say corporate sponsorship is up 11percent over last season.

There have been several new sponsorship announcements during this weeks Charlotte Motor Speedway Media Tour, but some high-profile teams, such as Roush Fenway Racing and Richard Petty Motorsports, still need sponsorship for some of their primary drivers.

Efforts to persuade two banks to forgive a $19.1 million loan to the city of Charlotte that helped build the NASCAR Hall of Fame appear to have made progress, with City Council members set to hear about proposed amendments on Monday to that agreement.

On Friday, Deputy City Manager Ron Kimble wouldnt talk about the proposed amendment or the negotiations, saying council members needed to be updated first on the so-called sponsorship loan and another agreement concerning NASCAR royalties.

But an agenda item that Kimble wrote for Mondays meeting suggests that some agreement has been reached, with council members hearing the proposed changes. They wont take action until their Jan. 12 meeting.

In November, the Observer reported that the city and the Charlotte Regional Visitors Authority, which manages the racing museum, had begun negotiations with Wells Fargo and Bank of America to forgive the loan. Growing to $21 million with interest, it was supposed to be repaid from the sale of sponsorships and commemorative bricks. Yet money from those two sources hasnt come close to paying off the loan.

When the hall opened in 2010, NASCAR was supposed to get royalties on such items as tickets, T-shirts, and food and drinks but only if the museum was making money.

The facility has lost money, according to the CRVA. It lost $1.4 million for the fiscal year that ended in June, and $1.6 million the previous fiscal year. But CRVA leaders are hopeful that the halls finances are stabilizing with attendance essentially leveling off.

Still, no royalties to NASCAR have been paid.

Kimble wrote as background in his agenda that the city, CRVA, NASCAR and the two banks have discussed strategies by which the financial performance of the Hall of Fame could be enhanced through mutual participation of all parties.

He declined to elaborate Friday.

But Wells Fargo spokeswoman Elise Wilkinson said the bank is working closely with the city to reach a solution with regards to the sponsorship loan. She said the bank continues to support the hall.

Bank of America spokeswoman Nicole Nastacie said the bank doesnt typically comment on client relationships.

There is precedent to such loan restructuring. Four years ago, the U.S. National Whitewater Center persuaded banks to forgive much of its $38 million in construction debt.

Most of the $200 million hall is being paid for by a special 2 percent hotel/motel occupancy tax. However, the city and CRVA got the sponsorship loan and a second $20 million construction loan that is backed by the revenue from expected sales of city-owned land near the hall. Sale of that land near Interstate 277 stalled during the recession, but the city has started selling some parcels, including a 3.6-acre parcel across from the hall.

The discussions with the two banks about forgiving the sponsorship loan began last April, when Kimble emailed a now-retired Wells Fargo executive Carlos Evans to ask if the bank would consider the request. Kimble wrote that he hoped they could agree on extinguishment of the sponsorship loan before the executive retired.

A week later, Evans wrote a reply that he and others had discussed options for resolving the debt.

We realize the hall is a problem, Evans wrote. We are willing to do our appropriate share in helping put the hall on an even financial footing as we realize the hall benefits this community on many different levels.

He said none of the banks proposals involved a full forgiveness of debt. ... That would tilt the scales too far with the banks doing way more than others in a situation where we all need to be sharing the pain .

Staff Writers Steve Harrison, Eric Frazier and Rick Rothacker contributed.