Hey Dallas, We Can Build A Billion Dollar Stadium Too

April 26, 2012 8:28 am

by Buzz Brockway · 27 comments

Plans were revealed yesterday to build the Falcons a new retractable roof stadium, ready for games in 2017. New estimated cost: $947.7 million. $300 million would come from the hotel-motel tax but where would the rest of the money come from?

Beyond the hotel-motel tax, neither Poe nor McKay would provide specifics on how the proposed stadium would be paid for.

Asked if Falcons owner Arthur Blank is prepared to cover the roughly $650 million difference between the estimated hotel-motel tax contribution and the new cost estimate, McKay said only: “I think we have negotiated enough to understand what we think the financing plan would look like, and I think we would be prepared to make a deal on those terms.”

Said Poe: “Our board is certainly committed to ensure we work very hard and deliberatively to try to get a business deal that makes sense for the state and certainly understands some of the needs of the Falcons.”

So how much will the Falcons pay for this new stadium? How much will the taxpayers be on the hook for? Stay tuned.

And what happens to the Dome, rendered obsolete by the retractable roof stadium?

How two massive stadiums would co-exist logistically as neighbors, and how the Georgia Dome would remain financially viable over the long term without the Falcons as a tenant, proved to be thorny issues.

“What became apparent to us,” McKay said, “is to get a true long-term solution that was going to work in everybody’s interests, you were going to need to go back to a one-stadium approach.”

Said Poe: “These deals are complex in and of themselves. With two stadiums, the complexities … get magnified by almost double.” Now, he said, “our energy is strictly focused on a single stadium.”

So, tear it down or sell it to Georgia State?

Meanwhile, Jeff Schultz has an excellent article saying a new stadium is fine, but the Falcons should pay for it.

It’s also easy to understand Blank’s position on this: He can’t generate enough revenue in the Georgia Dome – enough being relative to the giant ATM-like stadiums that exist in Dallas, Washington and New York. The Georgia Dome doesn’t have enough suites, enough signage, enough martini bars. It’s the reason the Falcons’ overall value pales in comparison to that of other NFL franchises.

But the Georgia Dome is just fine for spectators. It’s just fine for teams. It’s just fine for a Final Four or a monster truck race or a trade show. Nobody is affected by the fact that it doesn’t make a sufficient “cha-ching” sound for the Falcons other than the Falcons’ owner.

New buildings are nice. But the Falcons are a private business, not a post office or a branch of government. I just happen to believe that business owners should pay for the building that houses their business. I know – such a quaint and novel thought.

Amen brother Schultz. Glad to know you’re a fiscal conservative.

Calypso April 26, 2012 at 8:57 am

Rat bastards.

seenbetrdayz April 26, 2012 at 8:59 am

The more I read about this stuff, the more I wonder what exactly is wrong with the Georgia dome we have now?

If I thought that a new stadium would help the Falcons play any better, that’d be one thing. But, is this really necessary? ‘Wants’ versus ‘needs’ and all that?

Mike Stucka April 26, 2012 at 9:04 am

Please be careful with the terminology. Even itinerant visitors are taxpayers when they’re paying a hotel-motel tax — so it’s not just property and/or income tax that could be in play. And while much of the hotel-motel tax could be paid by people from outside the state, there’s still an opportunity cost in dropping $300 million in hotel-motel tax revenues into one venue — what else could that $300 million do, or, for example, if the tax were reduced could Atlanta get more convention traffic that would better help the economy?

Buzz Brockway April 26, 2012 at 9:31 am

Good point.

I would add that there’s no doubt the Falcons bring people to Atlanta and thus help in part generate the $300 million in hotel-motel taxes. One could argue it’s worth it to Atlanta to spend at least some of that money insuring visitors have a pleasant experience here and hopefully want to come back. However, as you point out, there is an opportunity cost here that needs to be considered.

bgsmallz April 26, 2012 at 4:16 pm

Considering the GWCC doesn’t pay for itself and the Park also generated a loss and that much of those losses are subsidized by profits generated by the fact that the Dome generated a profit with the Falcons…oh, and the Dome will have to be subsidized without the Falcons, too.

It’s probably worth more of a discussion than ‘maybe Atlanta should spend some money to keep those folks happy,’ right? Is there any argument that the GWCC, Dome, and the Park are the biggest drivers in hotel/motel tax funds?

The GWCC and Dome and Park make money because the Falcons play in the Dome. Otherwise, the public has to subsidize them. If those facilities aren’t kept up, the hotel/motel tax will fall. If you’re subsidizing $5M a year for 30 years in operating costs just to cover the lost profits from the Falcons, doesn’t that start to make the arugment? What about the lost sales and other taxes that are generated by the sale of tickets, food, suites, etc. from Falcons games? What about the lost income taxes of players, coaches, staff?

Another side of the coin…what if more revenues for a stadium increases the revenues and profits to the GWCC?

Anyway, speaking of opportunity costs…there are a lot of them.

http://www.bizjournals.com/atlanta/news/2011/05/31/ga-dome-to-lose-15m-if-nfl-strikes.html

Charlie April 26, 2012 at 9:18 am

I’ll be weighing in (again) in today’s column. In the mean time, I’ll say I’m delighted that Jeff Schultz has taken the position he has. Though it’s unlikely that this process can be stopped, the only pressure that could make that happen will be getting this inside deal off of the political pages and into the conscious of the greater public at large. The sports page is a great place for that to start.

Nixonstheone April 26, 2012 at 10:49 am

I’d heard Ga. State already owned it – no?

benevolus April 26, 2012 at 10:56 am

I don’t have a problem with this in principle. The state would continue to own the building, the Falcons- and whoever else uses the building- would pay rent. The question to me is- how much do the tenants pay? I believe I have read the the Dome is actually a money maker for the state, and presumably the new stadium could be too if the rent is figured correctly.

bgsmallz April 26, 2012 at 11:12 am

Oh well..as long as we are including all the recently built/renovated stadiums and not just cherry picking for comps. Oh wait…that’s exactly what is happening. And I love Schultz’ emphasis on how the Dome is ‘only’ 20 years old. It will be 25-30 by the time the new place is built and will have been used as long as Fulton-County was used by the Falcons. (and close to as long as it was used by the Braves) But don’t let facts get in the way of his ‘things used to be different’ troll gathering mission.

Before you ‘weigh in’ at least do some research on what the marketplace is and get facts straight. Everyone can have an opinion…but at least base them in reality and not just an editorial in the sports page or..cough cough..on a blog.

Indianapolis- RCA Dome (built in 1984) replaced by Lucas Oil in 2007
Phoenix- Univ of Phoenix Stadium (built in 2006)
Dallas-(2010) Look carefully at this one…Arlington provided increases in sales taxes, hotel/motel taxes, and $325 M in bonds…when someone says it was built without public money, they are either lying or ignorant.
Solider Field Renovations- 2003
Lincoln Financial – Philly (2003)
Superdome Renovations- 2006 Renovations
Ford Field- Detroit (2002)
Kansas City (2006)
Green Bay (2003)
etc. etc. etc.

Anyway…all received public financing/assistance in one form or another. But again…you only have to include that in the analysis if you are actually interested in setting a factual table for the analysis of the market.

The list goes on…the only stadiums on the list that haven’t either been renovated

http://espn.go.com/los-angeles/nfl/story/_/id/7088271/holes-city-industry-nfl-stadium-plan-los-angeles

I included that link b/c it seems relevant.

ohwait April 26, 2012 at 2:43 pm

Except the Green Bay Packers are owned by the citizens of Green Bay. In that case, the owners did pay for renovations that helped increase revenue.

The 25-30 year time limit is about right though since a stadium can only be upgraded so much before it becomes obsolete. In this case, like with other teams it may be time to move the Falcons to a different part of town possibly closer to the suburbs. Heck, it’s worked for most NFL teams.

bgsmallz April 26, 2012 at 2:58 pm

http://www.packers.com/news-and-events/article_spofford/article-1/No-taxpayer-dollars-in-new-Lambeau-expansion/bd9547c7-400c-4b46-ac0c-6401767afbfa

In the recent $130 M expansion, you are right. No tax dollars in part…

But note that the 2001-2003 expansion ($373 M in 2012 dollars) was paid for not by hotel/motel taxes, but by a .5% sales tax increase which was approved by the Wisconsin state legislature and a referendum.

http://www.packers.com/lambeau-field/stadium-info/history/index.html

Cassandra April 27, 2012 at 9:44 am

@bgsmallz

Are you actually selling the idea that the life span of a modern stadium is only twenty years?

Un-believe-able! Many buildings are constructed using 50 or 100 year techniques. Do Better!

bgsmallz April 27, 2012 at 10:42 am

@cassie

Facts are facts. And no…not twenty…but certainly 25-35 is probably in the ballpark(pun!) based upon this thing called ‘historical data’.

#1- The Falcons were in Fulton County stadium for 25 years. That’s call a fact. The Braves were there for 30 years.
#2-There are only 5 stadiums in the NFL older than the Georgia Dome that have not received major renovations (think hundreds of millions of $) in the last decade. Candlestick in SF, Oakland Colosseum, Qualcomm Stadium in SD, Ralph Wilson stadium in Buffalo, and the Metrodome in Minnesota. Out of those 5, Oakland and SF are looking at a new stadium (in San Jose), Minnesota is working on a stadium, San Diego is working on a new stadium and the Bills are (a) playing games in Toronto and (b) looking at undertaking $200M+ in renovations that are going to be entirely funded by tax payers in order to stay in Buffalo.

Cassandra April 27, 2012 at 11:15 am

Sorry bgsmallz, your facts are blind to the fact that the fans, you know, the ones that fill all the other seats, enjoy this venue. Not enough martini suites, boxes, etc? Toughski, **itski, not Atlanta’s $300M problem.

The Dome is a gorgeous facility. It is not like ANY of the other older venues you mention:

The Stick was originally built as the home of Major League Baseball’s San Francisco Giants, who played there from 1960 until moving into Pacific Bell Park (since renamed AT&T Park) in 2000. San Francisco 49ers NFL team moved in for the 1971 season.

The Coliseum: The Raiders played their first game at the stadium on September 18, 1966. In 1968, the Kansas City Athletics became the Oakland Athletics and began play at the new stadium.

Qualcomm: The Chargers (then a member of the American Football League) played the first game ever at the stadium on August 20, 1967

Ralph Wilson: The stadium opened in 1973

So the prevailing logic is that other metro’s put at risk for a foggy return taxpayer dollars, so too, ought Atlanta?

Come see me in 30 years.

bgsmallz April 27, 2012 at 11:26 am

I have no idea what that comment means or what it is supposed to imply in relation to your original lifespan comment except that apparently we agree that there are very few stadiums that are older than the Dome that haven’t been through major upgrades.

Note that you left off the Metrodome. That’s nothing like the GA Dome. (sarcasm font needed)

Cassandra April 27, 2012 at 12:06 pm

I left off the Metrodome because I grew weary of researching …

“Opened in 1982, it replaced Metropolitan Stadium, which was on the current site of the Mall of America in Bloomington and Memorial Stadium on the University of Minnesota campus”

Comparing our Dome with those venues is invalid as some of those places are really creaky. Hey, y’all do as you wish, I just think it is the MOST wasteful of projects and helps few, other than those who need help the least.

I guess another way of looking at it is what is the incremental benefit of committing $400M, err $300M of Atlanta public revenue to this project. Fans goto see the game, not the venue.

Is a new venue going to attract more business?

Show that business case!

KudzuDave April 26, 2012 at 2:23 pm

I am a liberal Democrat and I fully agree with Schultz column too. I doubt you will find many liberals that think a government should spend millions to make the rich, richer.

benevolus April 26, 2012 at 5:25 pm

Arthur Blank is going to get richer somewhere, and citizens are going to help him. The question is, do we want it to be here?

Also, what I want to know is, how do we – the taxpayers- get paid back? Is the expectation that our tax increase to pay for the stadium is less than what the tax increase would be to make up for the lost revenue of not building the stadium?

seenbetrdayz April 27, 2012 at 9:18 am

So are we supposed to be “helping” Arthur Blank or looking at revenues?

This whole thing stinks to high heaven, to me. One thing that people haven’t yet come to accept is that the government doesn’t do particularly well when managing for-profit ventures. I’m cautious whenever someone says that ‘taxpayers will get paid back.’ I mean, it isn’t like the GA general assembly is gonna cut a check to every Georgia resident when the money starts flowing in. Some partners are created more equally than others in these sorts of deals, so what happens is that Arthur Blank gets guaranteed business, Georgia.gov gets more money to blow, and as always, they end up raising taxes anyway.

johnl April 26, 2012 at 8:24 pm

Buzz, I assume you voted against the extension of the hotel tax that will fund this thing?

Charlie April 26, 2012 at 9:48 pm

It was voted on in 2010, prior to Buzz’s first term.

Harry April 26, 2012 at 10:11 pm

It seems legislative leadership has rigged the process so as not to be put to a vote. Someone here had provided the details a while back of how it happened in the case of the stadium proposal. I think it’s approved at the unelected GWCC board level.

No tax increase that does not contain supposed offsets (theoretical reductions) is ever voted on directly by the legislature. That doesn’t happen.

Harry April 26, 2012 at 10:17 pm

The Tea Party needs to call for a mass action on this one. Heads need to roll, including the legislative leadership, GWCC, and Arthur Blank. The Falcons should be boycotted.

The experts are saying this will cost over $1 billion. That’s $100 for every person in the state. Where is the money coming from?

The Last Democrat in Georgia April 27, 2012 at 12:13 am

“The experts are saying this will cost over $1 billion. That’s $100 for every person in the state. Where is the money coming from?”

The money will come from legalizing prostitution.

The only catch will be that us, the taxpayers, will be the prostitutes and Arthur Blank and the NFL are gonna be our pimps.

Enough talk…Daddy needs him a new private jet and a mansion. Now let’s get out there and get Daddy Blank and Daddy Goodell their money and it better all be there by the end of the decade or we’ll never see the Falcons or the NFL ever again…CLAP-CLAP!!

Jimmie April 26, 2012 at 11:03 pm

Jerry World Orig. estimate was for 900 mill. With Taxpayers on the hook for 330 Mill I believe. The total cost ended up being 1.2 Billion. Jerry put in the extra 300 Million. The place is very impressive. Would the stadium be moved out of the traffic nightmare of the world? It’s not the nicest area either.

David Staples April 27, 2012 at 12:49 am

So why exactly do they call it football when really the only time they use their feet to move the ball is the kick-off, field goals… and running while carrying the ball? Shouldn’t we perhaps adopt the european “football” for what we now call “soccer”?

Harry April 27, 2012 at 3:09 am

The European soccer organizations are even more corrupt than the NFL.

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