Financing The Extra Stadium with Public Money Gets A Little Attention. Finally.

Over at WXIA 11-Alive, Matt Pearl reports that a resolution has been introduced in the Georgia House that would “urge the Georgia World Congress Center Authority” to “use free market principles” when contracting, leasing or purchasing property or rights for Atlanta’s proposed new and redundant stadium. 

State Reps. Mike Dudgeon (R-Suwanee) and Charlice Byrd (R-Woodstock) sponsored the measure and spoke to Pearl about it:

We would love to see a new stadium here and bring a Super Bowl to Atlanta,” Rep. Dudgeon said, “but we feel very strongly that it’s not the right use of taxpayer money.”

Said Rep. Byrd: “There are so many other things we could be funding — more funding for education or capital improvements. There are many other things beside a stadium.”

Good to know. But others are not so concerned about the wise use of public money:

It is a longstanding tradition that you build stadiums with public-private partnership,” said Atlanta mayor Kasim Reed. “That is the way the best stadiums in the country have been done, and I believe we should continue in that tradition.”

We’ve had a lot of “longstanding traditions” in this country. I can think of at least one “longstanding tradition” that caused a civil war. Being a tradition doesn’t make something good. Or smart.

Or even right.

23 comments

  1. peachstealth says:

    How is it New Orleans keeps getting Super Bowls with a 35+ year old stadium? Maybe the Georgia Dome isn’t the problem.

    • Charlie says:

      It doesn’t help Atlanta’s cause that on our version of Bourbon Street, Ray Lewis killed a man after our Super Bowl.

      That, and the ice storm that we had during it punched a hole in the theory that Atlanta is a “warm winter” city usually needed to host.

      • peachstealth says:

        Oh so that’s why we need an open air stadium. No roof for the ice to punch a hole through.
        Makes perfect sense (LOL)

      • bgsmallz says:

        Yes….I’m sure it has everything to do with Ray Lewis and nothing to do with the fact that the Superdome has under gone $400M+ in restoration and renovations since 2006 that has been all by public funding.

        Here is a free market principle: competition. Remember that if the Falcons leave. Funny…I know athletes aren’t real people, but how much of the hotel/motel tax are we going to have to use to replace the $5-$8M a year in state income tax and the estimated property/sales taxes those 53 employees making about $3M a piece ($150M with salary and benefits) take with them to another state?

        What about the hole in the Gwcc budget when there is no Falcons?
        Or the lost Marta revenues from game days?
        Lost hotel revenues from game days?
        Lost sales taxes from ticket sales?

        And do we lose the Sec championship, CFA kick off and/or CFA bowl if we don’t replace/renovate the Dome?

        At least we wouldn’t let Alabama or Mississipi out conservative us….we can carpool with those folks to Tennessee, Florida, NC, or Texas.

        • Charlie says:

          See, you start out with reasonable talking points and then you start arguing against yourself.

          The stadium as currently proposed will be open air. The CFA kickoff, CFA bowl, and SEC Championship games prefer the Dome.

          So, are you saying we’re going to have to use even more taxpayer money to renovate the dome to keep these events, in addition to giving Arthur Blank a half billion dollars so he can take his football and go play outside?

          I suggested long ago the Dome be sold to Arthur Blank for one dollar. Then he can either renovate it if he feels that would increase its revenue, or operate it the way he sees fit so he can get a better take than he does with his lease from the Georgia World Congress Center. Regardless, taxpayers would be better off than giving him a half billion dollars to feed his ego and duplicate a stadium next door to one that will continue to exist.

        • So we should use tax dollars to finance a stadium to keep athletes’ salaries in Georgia in order to keep getting the income tax on those salaries? Seriously? How about if we don’t use public money to finance a stadium, so we don’t NEED the income tax off the player’s salaries?

          Yeah, it’s a stupid idea, but slightly less stupid than yours.

        • “how much of the hotel/motel tax are we going to have to use to replace the $5-$8M a year in state income tax and the estimated property/sales taxes those 53 employees making about $3M a piece ($150M with salary and benefits) take with them to another state?”

          Let’s play with that question for a moment, shall we?

          First off, how many years of state income tax and property/sales taxes from those 53 employees will it take to pay for the new stadium? If we assume that the state income tax is 6%, sales taxes another 8%, and property taxes roughly 1% of their income, we come up with an easy number to work with here – 15%. So 15% of $150M is roughly $22.5M per year that these guys pay in taxes altogether, which leaves $127.5M for them as income. Here’s a novel idea… why not have the players chip in together to build the stadium of their dreams? If they each chipped in 15% of their income (another $22.5M in total), they’d have the money for a half billion dollar stadium in 22 years. Perhaps Arthur could provide the financing for them at a reasonably low interest rate and they’d be able to pay it off in 25 years or so.

          Furthermore, that $22.5M they could be paying in taxes? That assumes that they don’t have very good financial advisers and don’t know anything about tax avoidance themselves. If they’ve got any sense, they’d buy properties with a minimum of 10 acres and get a conservation use assessment on it. That immediately lowers your property taxes. To avoid sales taxes, you don’t just go buy anything and everything – instead you stick it in the market or you start a business – whereby you join the world of numerous deductions available to businesses – including startup costs. There’s a reason one of Deal’s tax returns showed him paying a paltry 1% of his income in taxes. He just knows how to work the system. (Or at least his accountant does.)

        • bgsmallz says:

          Charlie-

          Agree on one point…building an open air stadium is stoopid. They should build a retractable roof and scrap the Dome and repurpose the Dome property.

          Mike-

          Let me understand this straight…you’ve never, ever, ever, ever, ever, ever heard the saying you have to spend money to make money? What a stupid idea. I forgot that old Austrian school adage : “You shouldn’t have to pay for nice things.” Player taxes is just one part of the economic pie that is the return on public investment. I can do a graph if that is too tough of a concept. (sorry for the snark…but you started it! :))

          Dave-

          If they are paying $22.5M in taxes per year, at 30 years that is $675M. And we are talking about financing $400M? So if we we take the “$400M” and move it to spending on infrastructure we’d lose net $275M on just player taxes? Why are we even having this discussion? And I’ll avoid the whole ‘do they have any sense’ argument. Obviously, you have to take leakage and tax rates into account here…but in a city like Atlanta, where many Atlanta and non-Atlanta athletes have offseason homes, I think leakage can be overstated.

          Here are my points…and I’ll hang up and listen:

          1) I think all of the alternatives that you guys are saying might make sense in a bubble or some professor’s laboratory, but in the real ‘free market’ you have to look at your competitors. Is the competition willing to pay $400-$600 M in public funds in order to build a new stadium for an NFL team? Yes, they are. That’s the market…plain and simple. We can either choose to pay it or not pay it…but you can’t expect someone to take a low ball deal from us when that’s not the market. I’m pretty certain that is undisputable.

          2) So, get away from this idea of ‘alternative methods that make more sense in a libertarian/conservative utopia’ and move back to the market. Once you get there, which is public funds for a new stadium, the only question to ask from a pure economic standpoint is ‘will the public see a net return on their investment or will they lose money on the investment’?

          The answer to that in this case seems to be that in the worst case the $400M will be a wash over the 30 years, if you assume the Falcons leave. You don’t have to even look at multipliers or unmeasurable things like ‘what hit do you take from not having an NFL team when attracting other businesses, etc.’… Between player, coaches, and front office taxes…? Over 30 years? Based upon public minutes from the GWCC Authority done in prep for a possible lock out, you can see that without the Falcons, the Dome projects to lose at least $1.4 M a year. That’s another $42M lost by not financing the bonds.

          http://www.gwcc.com/about/governance/pdf/05-31-2011%20Authority%20Minutes.pdf

          Anyway, I think the whole point comes down to this…it’s may not be a ‘huge’ money maker and the money could be spent somewhere else, but it isn’t just a $400 M gift either. So…we finance $400M to have a really nice public stadium, keep the Falcons, and have world class events and while we don’t make tons of money, we get paid back the $400M. Why is that so bad? Do you guys not like nice things that pay for themselves?

          3) But…let’s at least get on the same page about this silly “Look…if we take the money away from the stadium, we will have all of that money to spend somewhere else idea.” Because that is just false.

          1) Assuming the motel tax generates the same number w/o the Falcons or spending to keep the Dome in good repair over the next 30 years is a false assumption. (Subtract that out of the $400M)
          2) Assuming Marta revenues don’t drop w/o the Falcons is a false assumption. (subtract that from the $400M)
          3) Assuming state and local revenues don’t drop w/o the Falcons is a false assumption because of income taxes, sales taxes, and property taxes (subtract that from the $400M)
          4) Assuming the Dome doesn’t require tax payer money to pay for expenses w/o the Falcons is a false assumption (subtract that out of the $400M)
          5) Assuming that the state and local governments don’t get sales taxes from Falcons ticket sales and concessions sales is a false assumption (subtract that out of the $400M)
          etc. etc. etc.

          And you aren’t left with this false and really patronizing argument that it is either a $400 M gift to Arthur Blank or $400M that we could be using on transit. It’s much more complex and probably is more along the lines of “We can spend $400M to build a nice stadium and get paid back that money or we can take what would be left of the motel/hotel tax after subtracting the lost revenue from losing the Falcons and spend it on infrastructure that we need.”

          And frankly, the real argument should be…we probably want both. As a region, there is an argument that we need both. So maybe…just maybe, we should pay for both.

          • You know what’s better than paying money for nice things? Using other people’s money to pay for nice things.
            Please feel free to provide some figures showing Georgia’s return on the $400 million investment of taxpayer money. You can even use a graph and all the snark you need.

            • bgsmallz says:

              Welllll….according to the GWCCA, the Dome generated $225M in “New Dollars” in 2010 and A study conducted by the University of Georgia’s Selig Center for Economic Growth estimated this sum had a total economic impact of $349 million for the state of Georgia. Blah blah blah. There’s a lot of spin in there, but there are also some real numbers.

              The Dome actually produced between $19M and $16 M in Sales Taxes for the State and Local entities from 2008-2011. That’s $525M in sales tax revenues over 30 years if you assume an average of $17.5M. (with a hefty chunk going to Marta)

              http://www.gwcc.com/about/docs/2010%20GWCCA%20Annual%20Report.pdf
              http://www.gwcc.com/about/docs/2011AnnualReport.pdf

              I think it is safe to assume that the new facility would generate similar sales tax revenues if not increased sales tax revenues through higher revenue generating suites. Again, dig into the presentations if you wish.

  2. T-Bone says:

    How could any person with functioning senses and firing synapses for the last several years possibly think that taxpayer money should be used right now to build a stadium for a private football team? I do not consider myself a Tea Partying, super small government person (“not that there’s anything wrong with that”) and I LOVE the NFL, but I cannot see any rational reason for this expense. The economic benefits of a Super Bowl are always grossly overstated. It seems to me that the most profitable professional sport on earth should be able to figure out a way to work with team owners to finance their new stadiums.

    • Calypso says:

      How could any person with functioning senses and firing synapses possibly think that taxpayer money should be used to build a stadium for a private football team?

      FTFY

      • T-Bone says:

        Well, sure. I just mean in recent history (circa 2005), there were lots of reasonable folks that, for example, bought houses they couldn’t afford who at the time might have seen a stadium as a good investment for the city because “hey! the value can only go up, right?” It’s much more difficult now to find that sentiment.

  3. SmyrnaSAHM says:

    This native New Orleanian isn’t going to step into the NOLA versus ATL discussion; but, the Superdome does have pretty new lights and a fancypants title sponsor. (Let’s not discuss the lack of, oh, a COACH.)

    Earlier this week I was discussing the use of public funds to build a stadium for Arthur Blank with a candidate, and he replied that he had heard that the Falcons were looking to move the stadium to Doraville if they didn’t get new digs downtown. How convenient, I thought, seeing as how MARTA already goes to Doraville!

    • Charlie says:

      I do love that line of thinking, and have heard it myself.

      Yet no one can answer this: If the State doesn’t give the Falcons a half billion dollars to move 1,000 feet north, who is going to give them a half billion dollars to move to Doraville (who specifically doesn’t want the stadium on the old GM site)?

    • peachstealth says:

      I’m sure Mr Blank can get new lights at a discount from Home Depot. Maybe a naming agreement with Coca-Cola or UPS or Georgia Pacific or the afore mentioned Home Depot

  4. Baker says:

    If Kasim Reed feels we must do it, then fine, but could he at least go to Arthur Blank and say “Look man, the economy sucks right now. We have a lot of big problems we’re trying to work through. Can we wait on this and revisit it in five years. Let us use this chunk of tax for some of the dire issues we’re facing.” First say it privately, and then tell him you’re going to say it publicly. If he wants to be the giant a#@hole who insists on using taxpayer funds in one of the more intense times in Atlanta in a long time, then let him put his face to it. Blank’s barely had to talk about it. Dear Atlanta media, go ask him about it for goodness sakes. What the hek is going on? “Doesn’t anyone notice this? I feel like I’m taking crazy pills”

    Join the Facebook page.
    http://www.facebook.com/pages/Save-Falcons-Habitat-Keep-the-Dome/147025202029129

  5. PchT says:

    I’m trying to find a reason to believe we need yet another stadium. If the Falcons want it…. let them build it with their own dime.

    • Rick Day says:

      you can’t quantify quality of life value, but you can the extra tax revenue above costs it would generate the state overall. A new dome would be used more times for more events, bringing in more tax revenue and revenue desperately needed in the hospitality industry.

      Ten thousand lower paying jobs trumps one hundred high paid ones. Aren’t you a fan of ‘trickle down’?

      • Dave Bearse says:

        You’re ovelooking that it will be a new open air stadium, not a new dome. The market won’t support both a dome and a new open air stadium. bgsmallz cites a study above that the Dome without the Falcons is a loser, as would likely be a new Falcons stadium not used for anything else other than Falcons games.

        After the Dome’s torn down, the new stadium will be used less times for less events, bringing in less tax revenue and revenue desperately needed in the hospitality industry.

        • The Last Democrat in Georgia says:

          “After the Dome’s torn down, the new stadium will be used less times for less events, bringing in less tax revenue and revenue desperately needed in the hospitality industry.”

          Which is why if we are going to spend ridiculously huge sums of public funds desperately-needed for a zillion other pressing needs on a private investment for a billionaire, we should at least be somewhat “wise” about it and blow that money which is critically and urgently-needed elsewhere on a new stadium with a retractable roof either on the current site where the Georgia Dome is located or on the site on the north end of the Georgia World Congress Center property while expanding the convention portion of GWCC to the south where the Georgia Dome is currently located.

          A new retractable roof stadium could also be built immediately to the south of where the Georgia Dome now lies in the area where the silver, orange and brown lots are located in order to preserve relatively convenient access to current (MARTA) and future (commuter and/or light rail at the proposed multimodal terminal at Five Points) in addition to enabling possible future expansion of the Georgia World Congress Center to the south.

        • The Last Democrat in Georgia says:

          I’m not all that hot on spending huge sums of public money on a new stadium so that a billionaire can get a maximum return on a personal private investment while there are so many other pressing needs and especially when the Georgia Dome is still relatively young in the grand scheme of things and is still very much serviceable.

          But if we are bound and determined to spend huge sums of public money on a new stadium, we might as well spend it where it will have the greatest potential return for the public, which is on a new stadium with a retractable roof where the Falcons and the NFL could play their games “out in the elements” and where the city, region and the state can host indoor events that greatly enhance our economy from a hospitality standpoint.

          Events like the SEC Football Championship Game, basketball tournaments, high school football games, mega-conventions, etc. for either for which it is much better or just flat-out completely necessary to conduct the event indoors.

  6. Rick Day says:

    Finally! Proof positive that the Lege does monitor this blog and react to its input.

    Of course, they are reacting to my reaction so they always do the opposite.

    *shakes fist* Georgians!

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