Say “Yes” To New Falcons Stadium!

December 10, 2012 10:00 am

by Stefan · 67 comments

Why the right economic argument, combined with the the secondary gain, make approving the stadium the right bargain to strike for Atlanta.

You get very few opportunities to change the direction of a major city. And most of Government’s job is to get out of the way. But there are a few decisions the state can make to allow a city to maximize its ability to attract and retain people and jobs. This is one.

The economic arguments that are made in favor of a new stadium are, in general, overblown. It provides a ton of short term construction jobs, and then a smaller number of low paying jobs thereafter. People come into the city to go to the events and they do spend money – so there is actual economic gain. However, these studies that are produced by the team or some interested party generally overvalue the economic impact of large events and of visitors because they include revenue that may have gone to some other Atlanta event if the Falcons stadium weren’t here (what economists call “substitution”).

They count “possibles” as “certains” and maybe double-count here and there, all to try and make the stadium look like a good investment. And all that is because they (and we) are using the wrong metric: whether the stadium itself will make money.

However, what teams and interested parties generally do not argue is the economic affects of the team leaving. Even a discussion of that possibility can result in blow-back for the team. But the NFL intentionally keeps the number of teams in the league beneath the number of cities than can actually support a team, so there will always be a teamless city willing to pony up to steal yours away. And when the always available Los Angeles has finally agreed to put money into a new stadium (as happened in September), that becomes a real threat.

Teams moved a lot in the 90′s and it has not happened since, mostly because expansion satisfied the appetites of Charlotte, Jacksonville, and Houston and prevented them from becoming suitors of existing teams. Houston presents a similar situation to Atlanta. They refused to build a new stadium, lost their NFL team for a few years (thus losing the tax revenue), and then ended paying for a new stadium AND a massive franchise fee.

But let’s ignore the fact that this is an NFL team and consider any other business that we want to stay in the state.

Georgia spent $84 million in incentives to lure the Caterpillar plant here from China. It will create 300 jobs by the end of 2013, with plans to increase to 600.

That’s probably money well spent. It will employ people from 2013 until Caterpillar renegotiates the incentive package in 2020. Caterpillar will reportedly kick in $200 million in plant construction.

That’s $140k per job. These jobs pay an average of $35k, with state income taxes at 6% that brings back money to the state at $2100 per year. With 600 jobs per year, the state will be paid back in 67 years. Of course, the plant won’t still be there then, and the incentives will need to be renewed in eight years.

Let’s compare that to the stadium. Granted, we are keeping a business here rather than attracting a new one, but the jobs equation should be the same. The Falcons payroll this year is $109 million. That does not include coaches or front office staff. They pay approximately $6.54 million in state income taxes every year. At that rate, it would take 45 years to pay back the public share of $300m. Still a long time, but 1/3rd less than the Caterpillar plant.

Falcons players also buy very expensive homes, and spent a very high percentage of their incomes locally. That creates secondary jobs. (Additionally, outrageous lifestyles that the players both live and create among their friends gave direct rise to the “Real Housewives of Atlanta”, which contributes something to Atlanta’s bottom line, though I can’t say what.)

And since the $300 million the Falcons’ stadium demands is being paid for by mostly Downtown Hotel taxes, the very people it and the GWCC attract are the ones actually paying for the stadium. Maybe we could tax all the people that buy Caterpillars to achieve the same goal?

In addition, the 30% of the bill that the public is responsible for is much lower than the average 62% that the public has been kicking in for stadiums over the last few years. All in all, this is a pretty good deal.

But even though asking whether the stadium itself will make money is the wrong question, sometimes the right plan can get the stadium to break even. Examples include Gillette Stadium in Boston and the economic projection of the Brooklyn NBA team’s new arena call for a break-even projection. Why? Because they follow the new rules of stadium building.

  1. Must be Downtown.
    Not my rule, read Baade and Dye, Chema, and Santo, and to a lesser extent, Coates and Humphreys. Essentially the argument is that you do not get secondary benefit from a stadium if it is in the suburbs.
  2. Must be architecturally interesting. Current stadium life expectancy is about 30 years. If a new Falcons’ stadium is approved, the Georgia Dome will be replaced at age 25. That can be greatly extended if you manage to build a building that people love. Think Fenway, Soldier Field, Lambeau, the Nou Camp (too far?)
  3. Direct Secondary benefit in terms of business and housing combined with stadium use (This is how the Brooklyn Nets Stadium is breaking even).

So, building a new stadium can break even (though probably won’t) and will prevent the team from leaving (increases value of the team but concentrates that value in Atlanta), but beyond the immediate economic argument, there are others to consider.

Building the Georgia Dome in 1992 removed a neighborhood from the map and erected a wall that held up North-South and East-West organic transit and communication. With the building of the Multi-Modal hub and the redevelopment of the eastern part of the Gulch into something walkable and useful, the new stadium project can be used to tie in the Western part of the Gulch and make a cohesive plan for Western Downtown. It could be become the public square that Atlanta needs and part of the tourist destination that we crave.

So not only can we transform the Gulch as a byproduct of the stadium creation, we can fix the other major problem Atlanta still has: Why Nobody Visits You Unless You Have Their Grandkids.

Your guest room goes unused a lot, doesn’t it? Mine, too.

I love Atlanta. You love Atlanta. That’s why we have chosen to make it our home. However, it makes a better home than it does a travel destination. We don’t have amazing mountains or pristine beaches When family came to visit when I was a kid, they’d ask me what they had to see while they were here. I never knew what to tell them. Now I can say the Aquarium, or the World of Coke, and maybe seen I can say the Civil Rights Museum, College Football Hall of Fame…but few people come to Atlanta unless there is a convention or family or something else that brings them. Which is why the Falcons stadium and the Gulch transformation are key to keeping the evolution of Atlanta as a tourist attraction going. And that, eventually, brings dollars. And while they cannot be tied to the stadium specifically, it, along with that entire area’s improvement, are necessary to the continued growth of the city.

And lastly, people love the Falcons. On game days, southside and northside, black and white, young and old, all are out there tailgating or on their way to the game. Sports teams bring cities together. They increase the affinity people have for where they leave. The presence of a team has shown to bump up rents across the entire metro area. They help create a shared identity that we need to solve regional problems. That identity encourages investment

And all of the above are jobs that government is best at. The benefits of the stadium are primarily for the Falcons. But the secondary gain is small, but spread over all of Georgia. The argument for the stadium can be expressed in economic terms, but that’s really too narrow a window to see the full effect. Imagining the loss of the team makes it clearer, but it is when you consider what the building can do, as part of an area improvement, that makes it such a valuable investment. The stadium is a good deal. And the best one we can get. And we should take it.

AMB December 10, 2012 at 10:17 am

No.No. No. Hell no. No.

Keep repeating till the GA power brokers hear it.

No taxpayer money for a private enterprise.

atlanta_advocate December 10, 2012 at 10:18 am

We give taxpayer money to private enterprises all the time. See above.

Stefan December 10, 2012 at 11:00 am

All this is is allowing GWCC to sell bonds against future hotel tax revenues. it’s not general fund income tax money. it was specifically dedicated to this purpose back in 2010.

I don’t really understand the blanket “no taxpayer money for private enterprise”. I assume you then want the DOT to build roads entirely using its own staff. And they clearly can’t rent any equipment under your statement, and they certainly couldn’t buy any from a private enterprise, so all of their trucks and cranes the state will have to build. So Georgia needs to create its own truck plant, concrete plant, crane plant, yellow construction helmet factory, reflective vest company etc, all to prevent taxpayer money from going into the hands of a private enterprise.

Joshua Morris December 10, 2012 at 10:21 am

I agree with AMB – No. No sports team should shakedown city/county/state leaders to support its wealth building.

Stefan December 10, 2012 at 10:34 am

what about non-sports teams?

Joshua Morris December 10, 2012 at 11:14 am

As in…

Stefan December 10, 2012 at 11:50 am

auto plants?

atlanta_advocate December 10, 2012 at 12:02 pm

Shhh. No one wants to talk about public-private partnerships that are routine in this state (and country).

Joshua Morris December 10, 2012 at 12:30 pm

I get your point there, Stefan. I would certainly hope that we are being told the truth about financial analyses and ROI regarding tax breaks for attracting industrial plants.

I think a distinct difference is that automakers, tractor builders, etc., produce a tangible product through different levels of skilled labor, accounting for valuable private sector jobs. They also attract suppliers and other economically beneficial support to locations nearby them.

I understand that a sports team has an economically beneficial support structure as well, but it is purely an entertainment enterprise that produces service-oriented jobs to a mostly unskilled workforce, some only part-time. In my opinion, this society puts far too much value on entertainment, which overly rewards the stars and far undervalues the hard work of the lowest levels of the support staff.

If we’re going to help business in this state (when economically prudent), I support helping those who provide full-time jobs where fewer jobs exist, to people of varying skill levels, where government will not be asked to fund capital expenditures over and over again.

Stefan December 10, 2012 at 1:07 pm

The decisions that government makes (or do not make) subsidize certain industries and behaviors over others. However, if we decide not to help one entire group of businesses because we subjectively don’t value their skills, we are picking winners and losers, which I recall people not liking very much.

Joshua Morris December 10, 2012 at 2:12 pm

You’re right. I don’t like government picking winners–or losers, as Romney so eloquently put it. I was looking at it above from the lone standpoint of long-term economic benefit. It seems we’ve gotten into the tax-breaks-for-incoming-industry business based on tit for tat with other governments who will pass out the freebies to bring companies home. I don’t know how we break that cycle.

Baker December 10, 2012 at 2:24 pm

We’re already picking winners and losers and it needs to stop and heres a chance.

Stefan December 10, 2012 at 3:05 pm

So when it is downtown Atlanta’s turn to sell bonds to cover construction, then it’s time to stop? It never seems time to stop when we are talking about the building of a Wal-Mart in Ocilla.

I see y’all’s point – I really do- but this is the current way in which corporations decide whether to stay or go. Would it be better if Governments offered no tax incentives to any company, ever? Maybe, but that’s simply not the system we have. My problem with all of this is it seems we only get super-principled about these things when Atlanta is involved.

Baker December 10, 2012 at 7:26 pm

I dont want Ocilla to do it either.

Atlanta really is positioned to be an amazing city. A new stadium is not one of the pieces of that puzzle.

atlanta_advocate December 10, 2012 at 10:25 am

While I am for this project, I acknowledge that the chances of losing the Falcons if this does not go through are extremely remote. Blank will sell the team, but the new owner is likely to keep it in Atlanta. Of course, the new owners might want to move the stadium to the suburbs, and at that point we will see if the opposition to public-private partnerships will hold. But the whole “approve this or lose the Falcons” bit almost certainly isn’t true. There are a lot of cities far closer to losing their teams (i.e. Buffalo, Tampa, Jacksonville) than Atlanta.

Stefan December 10, 2012 at 10:33 am

I agree, it won’t happen immediately, but if the Falcons don’t feel they can continue to be competitive (and what we are talking about is post-2017) they will start looking for buyers and potentially moving the team.

Yes, the Jaguars and the Bills are more likely to move in the next two years, but if the Falcons don’t get a new stadium, they will top that list starting in 2017.

atlanta_advocate December 10, 2012 at 10:42 am

No they won’t. Blank won’t move the team. He will sell it. And he will have no problem finding a buyer willing to keep it in Atlanta in exchange for the privilege of being in the exclusive club of billionaires with expensive – and moneymaking – playthings. Of course, the next buyer will want a new stadium too, and probably won’t be willing to put up $700 million of his own money since he will just have spent $1 billion of his own money to buy the team. So it is either do this now on extremely favorable terms (when compared to how stadium deals are usually done) or later on less favorable terms, and very likely for an owner who is nowhere near as capable or is as good a public citizen as Blank. (Blank might sell to another Smith family or Atlanta Spirit Group type owners.) While that would be bad for the Falcons and for the city, it isn’t quite the same as “we will lose the team.”

Stefan December 10, 2012 at 10:45 am

your condition on resell to an Atlanta buyer is “will want a new stadium”, that’s really no difference from where we are now. The entire question is whether or not we choose to plan for an overall improvement to our city or a stopgap stadium which we throw up towards the end of this decade.

atlanta_advocate December 10, 2012 at 12:03 pm

Looking at the post by Buzz Brockway immediately below yours, looks like the former is an abomination, but the latter is just fine.

Baker December 10, 2012 at 10:45 am

I just wanted to jump in here while the typeface was still bold (hoping it still is or this will seem silly).

In short, I disagree with Stefan, think it’s a terrible idea, atlanta_advocate is right but usually it’s $300 freaking MILL for a new building even though the one they have is fine in everybody’s eyes but the owner, & also everyone should go here: http://www.facebook.com/pages/Save-Falcons-Habitat-Keep-the-Dome/147025202029129

Baker December 10, 2012 at 10:45 am

that should read: “usually it’s not”

Stefan December 10, 2012 at 10:48 am

I tried to fix the bold, may give it another shot. The issue isn’t whether the Dome is serviceable – it certainly is. But the Dome created a lot of neighborhood problems in the way it was built and situated, and those need to be fixed. Additionally, you may have noticed that Kroger, Publix, Home Depot etc have business models that depend on replacing serviceable stores with new ones and seeing huge increases in traffic because of it. The fact that the building still serves its base intended purpose is not enough if it isn’t providing the other benefits of a new building.

Baker December 10, 2012 at 12:11 pm

But Stefan, you just made my point. Kroger, Publix, and Home Depot (must have been Bernie’s decision) don’t come crying to the public tough to build them new stores.

Stefan December 10, 2012 at 12:27 pm

Don’t they? There are a number of tax code advantages and direct tax incentives that are given to these businesses to do exactly that.

Baker December 10, 2012 at 12:30 pm

You’re right, but $300 MILL outright is a whole other level

Stefan December 10, 2012 at 1:25 pm

True, except this isn’t 300m from the general fund to build a stadium, this is allowing GWCC to sell bonds against the hotel tax.

We could “recover” the 300m a lot faster if say, we taxed people who made over 500k per year at 8% instead of 6%…

LaFayette Underground December 10, 2012 at 10:55 am

We don’t ALL love Atlanta. Certainly not enough to have the state spend a single penny it could spend elsewhere on a new football stadium. I can watch the Falcons on TV just as easily if they’re in Atlanta or Los Angeles, but the road that doesn’t get paved because of their new home is something I’ll experience first hand every single day.

– LU

Stefan December 10, 2012 at 11:02 am

well, that originally said “Georgia” but I figured then you guys would get all upset at what I said about the beaches and mountains.

atlanta_advocate December 10, 2012 at 11:05 am

“We don’t ALL love Atlanta.”

So then why do you care? You won’t be paying for it. It won’t come out of your tax dollars. It will only come from the tax money for the people who ALL love Atlanta enough to live there or visit it. And that is precisely the problem that I mentioned in my comment on Buzz Brockway’s post, and have stated earlier. People who don’t love or even like Atlanta constantly find themselves in a position to make decisions that are vital to Atlanta’s future without having any financial responsibility for their decisions.

Stefan December 10, 2012 at 12:09 pm

So what you are suggesting is that the state should take money from the Atlanta Hotel tax and use it to pave a road in Lafayette, Georgia?

LaFayette Underground December 10, 2012 at 1:20 pm

Who’s ultimately responsible for the bond if any of the entities involved default? Doesn’t the state bear some liability with this? Doesn’t the state fund the GWCC? A single penny of state money or state financial liability for this is unacceptable in an era when the state (and all our local governments) blames inability to pave roads on a bad economy and no funds.

– LU

northside101 December 10, 2012 at 10:56 am

Building a new stadium to lure a Super Bowl (a one-time deal, since a Super Bowl always or almost always is played in a new or fairly new stadium) is like building yur chirch sancuary big enough to accomodate the twice a year Christians who show up at Christmas and Easter.

Stefan December 10, 2012 at 11:34 am

Where did I suggest that was a reason to do so? Oh, and you are going to hate department store design. They make the majority of their sales in the 2 weeks following Thanksgiving and so have to design their stores for that rush, leaving them overstaffed and feeling empty most of the rest of the time.

Jackster December 10, 2012 at 11:16 am

A stadium in the suburbs is a horrible idea, so I’m not sure why it’s in the pot.

My question is simply this: What is the ROI equation for Mr. Blank and the NFL? I haven’t seen any projections about seat lease fees, ticket prices, or other revenues coming in that would seek to explain how quickly the private investment will be?

According to Stefan’s analysis, the lifespan of a stadium is 30 years. So any ROI longer than 30 years should not be viewed as a good investment. With that said, is the falcons’ ROI longer than 30 years for their $700 mil investment?

Three Jack December 10, 2012 at 11:19 am

I have been wavering on this issue so I appreciate your analysis Stefan. You could also do a similar comparative analysis using the Kia plant or the failed Benz plant in Poole, GA where there were tens of millions set aside, then moved to some BS redistribution program when Perdueless lost the deal.

Jackster December 10, 2012 at 11:19 am

Also, if we look at a 30 year time frame, then the funding should be just under $200 Mill, which is in the current capacity for the GWCC.

That means that the $100 mil difference would either need to go to the falcons or simply be removed from scope.

Jackster December 10, 2012 at 11:31 am

So if we keep the cost at $1 Bil, then $200 Million gets funded by the CITY OF ATLANTA and its inhabitants.

$800 Mill gets funded by falcons / nfl. They would then need to make $27 Mil a yr to break even on their investment. Seems do-able.

But what does that translate to in lease fee / ticket price?

David Staples December 10, 2012 at 11:42 am

I’ve got a few questions / comments here.

1. When they say “out of town” visitors come watch the falcons. Are we talking about people from Alabama, Tennessee, Florida, South Carolina, etc? Or are we talking about people from Alpharetta, Macon, Augusta, Columbus, etc? In other words, are we simply transferring dollars that would be spent in other parts of the state to Atlanta, or does the state itself see added revenues?

2. I don’t live in Atlanta (or FulCo even) and am fine with Atlanta building another / replacement stadium if they want to. In keeping with the suggestion by Mike Dudgeon in the previous column, just please don’t use state money or have the state become liable in any way for the project.

3. What to tell family / visitors to go see? You’re right – Atlanta is not a destination city. It’s a hub / layover / working city. We don’t have any major geographical attractions that are draws for large crowds. No beach (unless you count the one at Lake Lanier Islands), no huge waterfalls like Niagara, no snow skiing, etc. It takes a certain kind of person to come here as a tourist. There either has to be a large festival or convention (Gay Pride and DragonCon for instance) for people to flock here in large numbers for an entire weekend.

Maybe not being much of a sports fanatic (I don’t proactively watch pro sports… only when they may happen to be on a tv in a bar or whatever), I’m a bit out of touch, but I don’t see a handful of Falcons games on a Sunday afternoon or late evening being something that’s going to attract large numbers of tourists to Atlanta. Wouldn’t it perhaps be better to keep the Dome and instead spend those hotel / motel tax dollars sprucing up Atlanta’s image a bit so the people who do visit don’t leave with an impression of Atlanta being full of potholes or full of traffic jams with a mass transit system that doesn’t really make it easy to get to already existing attractions? (For instance, Zoo Atlanta is over a mile from the closest MARTA station and Turner Field is so far away from the rail line that people have to transfer to a game day bus to get there without having to walk quite a ways.)

4. Since I don’t have a say in this from an Atlanta resident perspective, I’ll offer an alternative that can be looked at from a statewide level. Want to know what would get people like me downtown more often? A casino. A real casino – not just video lottery terminals. Table games where I can play poker, blackjack, and roulette. Stations where I can place a wager on horse races perhaps at another location. Perhaps those same stations could even let fans place bets on the outcome of the Falcons games.

And you know what? That casino doesn’t just draw fans for 8 to 10 games per year. Of course, this would take some action by the state legislature to legalize these types of things first. Perhaps once legalized, a developer may be interested in coming in and building out some sort of nice complex that could even include shows and everything. And since we’ve been attracting the movie industry a bit lately, something like this would even give them another “set” to use for any movies or shows that have a gambling scene in them.

When I travel, I usually stop in the casino for a bit. Whether it’s in Alexander Valley, Cherokee, Niagara, or Vienna – it’s something I enjoy when I travel. I would imagine many others probably do as well. But taking in a football (or other sports) game? Not likely to be on my itinerary.

atlanta_advocate December 10, 2012 at 11:51 am

What great things for the New Orleans economy did their casinos do? And no, Atlanta is not going to compete with Las Vegas or Atlantic City. (Do we even WANT to compete with Las Vegas and Atlantic City?)

This is another example of people who are quite willing and able to say “No!” to the ideas proposed by the elected Atlanta leadership being unwilling to come up with better ones of their owns.

We have:
1) Using the hotel/motel tax to build highways (that will be mostly used by suburbanites)
2) Using it for a property tax rebate (a whopping $250 a year … that will REALLY cause those supply side Laffer curves to explode!)
3) Using it to pave roads, fix sewers and other nuts and bolts things (which won’t help Atlanta attract a single company or job)
4) Using it to build a casino, to make Atlanta a major gambling hub with all the things that come with the gaming industry (most of which are not positive)

So far, the one GOOD idea is to use the money on the Beltline. (It is kinda-sorta good because the financing model, $15 million a year over 20 years, likely wouldn’t do nearly as much good for the Beltline as it would for the stadium). But I don’t know that the legislature would approve it for that purposes. But at least it is a good idea from the perspective of someone who is actually thinking about what Atlanta needs to remain being a competitive city.

David Staples December 10, 2012 at 12:08 pm

I didn’t say a casino alone is what makes a city great. Otherwise Wetumpka, Alabama would have a bit more name recognition. New Orleans has a number of differences from Atlanta. Las Vegas is a bit of a better comparison since other than desert and the Grand Canyon not too far away, they don’t really have any major geographical enticements. How many conventions are held in Las Vegas every year? How many corporations have incorporated in Nevada? See:

http://en.wikipedia.org/wiki/Nevada_corporation

And it appears you completely misunderstood my post, so you’ll have to completely re-write item number 4. I didn’t say Atlanta should build a casino with the tax revenues. I said the state legislature should make it legal for a private developer to buy land and build a casino in Atlanta. There’s a huge difference.

Stefan December 10, 2012 at 12:15 pm

Most of those corporations aren’t actually IN Nevada you know, they just exist there, so that should things go very wrong the owners of said corporations can remove all the assets from the structure without being worried about the potential for personal liability. IT’s not really great public policy.

David Staples December 10, 2012 at 1:06 pm

Oh, I completely understand that they’re not actually IN Nevada. But one thing to keep in mind is the taxes section of that wiki entry:

“Nevada’s tax structure is also a large benefit to incorporation in Nevada. Nevada has no franchise tax. It also has no corporate income tax or personal income tax.”

…which I guess I made that argument in the other post by Buzz / Mike, but taxes are absolutely something that companies take into account when locating a business somewhere. (The hotel / motel tax probably isn’t one they take into account much, but a state elimination of the corporate income tax might be a better draw for businesses to locate / stay here than individually choosing companies to give incentives to.)

Stefan December 10, 2012 at 12:03 pm

1&2. I don’t know the percentage of Falcons attendees that come from other states, regardless, a number of studies show that sports entertainment money often isn’t spent otherwise. That’s why there is a less of a downturn in sports spending in a recession (there is still a reduction, just less of one)

That said, I don’t think it matters. This is revenue from the city’s hotel tax – which is driven by convention attendance. Those taxes are then given to the convention center. The convention center wishes to sell bonds to capitalize on future income from the taxes. The only question the state has to answer is, are you gong to allow the selling of bonds to a 200m limit or a 300m limit, and what interest rate should the GWCC have to pay. It should not matter if the visitor is from Columbus or Phenix City.

3. You don’t absolutely have to have geographic amazement to lure tourists. But if you don’t, you need an area with visual interest, people walking about, and stuff to do. Honestly, all Paris has is a slow moving river, and they seem to do ok. How? Sidewalk cafe culture, museums, cool buildings and a surfeit of rude people. I am willing to do my part to achieve the latter.

4. I agree. We should have a downtown casino. We should also have a funded beltline and carbon dioxide monitors in schools. But none of these are mutually exclusive. they only become mutually exclusive if you don’t want to raise taxes or raise revenue in any other way.

David Staples December 10, 2012 at 1:29 pm

“This is revenue from the city’s hotel tax – which is driven by convention attendance. Those taxes are then given to the convention center. The convention center wishes to sell bonds to capitalize on future income from the taxes. The only question the state has to answer is, are you gong to allow the selling of bonds to a 200m limit or a 300m limit, and what interest rate should the GWCC have to pay. It should not matter if the visitor is from Columbus or Phenix City.”

Or perhaps another question could be should the funds collected from a hotel / motel tax be going to the GWCC or instead be redirected to other worthwhile projects?

Stefan December 10, 2012 at 2:12 pm

That’s totally valid as well. The problem is that the legislature already appropriated it toward that purpose back in 2010.

But this is what happens when the legislature refuses to consider any tax increases – it finds whatever least objectionable revenue there is and then debates what they should do with it.

AMB December 10, 2012 at 11:49 am

1 billion dollars. 1 billion dollars. For a stadium. To play football for a few weeks a year. 1 billion dollars.

I don’t care how you fiddle the numbers; that is an absurd amount of money to pay for a football stadium.

Stefan December 10, 2012 at 12:06 pm

I totally agree! Within the context of cities, the NFL, and why people live places and not others, it makes sense.

You could go larger and say, “why do people pay money to watch grown men play a game”, and you might get closer to finding out why a stadium costs 1 billion.

saltycracker December 10, 2012 at 11:58 am

Comparing the Dome with industry – The locals kicked in but maybe not enough. Maybe the Cat money should come from an Athens-Clarke & Oconee Co. motel tax and not from state coffers (thought they said initially 800 jobs growing to 1.400).

Doesn’t seem like a good plan to have all these one off negotiated payouts or waivers of state monies with clever companies holding an auction. The guys already here get screwed and are disadvantaged. Why not just eliminate the entire industry from some or all state taxes ?

saltycracker December 10, 2012 at 12:17 pm

If it flys, sure hope Atlanta hires a decent architect. Atlanta public projects must have connections or low standards for architects because of the eyesores they design.

Stefan December 10, 2012 at 12:29 pm

I totally agree with this. If done correctly, you may not have to replace it after 25-30 years, and if you make it part of a larger plan with the multi-Modal…

I also think that with any new stadium build, the Falcons should agree to move their practice facility downtown so that it could also be a tourist attraction.

Lawton Sack (GATA Eagles!) December 10, 2012 at 12:35 pm

The Falcons are not moving and there is no threat of them moving. It is nothing but a scare tactic to say that there is a chance. Atlanta has the 8th largest TV market in the country. The NFL does not just give up on a TV market like that.

The last NFL team to move was in 1997 when the Oilers moved to Tennessee. Three other moves were made in the 90′s were the Browns to Baltimore (Ravens), the LA Raiders to Oakland (in state), and the LA Rams to St. Louis. The Jaguars are the most likely team to move, if any team does move.

On the idea of caterpillar, the AJC reported that it would have an economic impact of $1.4 billion per year, with $33 million in annual state and local tax revenues. You got to remember that sales taxes are collected on the sales of the equipment produced. That would take less than 3 years to repay the incentives.

In regards to state taxes, Georgia only gets half of the state taxes for Falcons players, as you pay income taxes to the state that you play the football game in. Of course, Georgia does get the taxes from the opposing team players. This amount of income taxes will not go up with a new stadium, though.

Also, if you look around Turner Field, you will see that it has done little to nothing to develop the area around it.

There is nothing to gain for Georgia or Atlanta with a new stadium. The only one that will benefit is Arthur Blank.

Stefan December 10, 2012 at 1:36 pm

In reverse order, Summerhill got messed up by Atlanta-Fulton County Stadium, not by Turner Field, but yes, superblock stadiums are a bad idea. That’s part of the problem with the Georgia Dome. cf. Camden Yards.

hat’s not exactly how duty days work, but it is close enough. It doesn’t make a difference for this analysis.

Send me the link to the AJC article. If we are allowed to take the economic projections of interested parties into account, well then have I got some GWCC numbers you are going to love!

The NFL won’t abandon the #8 market? Why not, they abaondoned the #2 market (LA) and the #10 market (Houston).

Lawton Sack (GATA Eagles!) December 10, 2012 at 2:00 pm

http://www.ajc.com/news/business/landing-caterpillar-plant-a-major-economic-victory/nQRQ3/

There are no other teams anywhere close to Atlanta’s TV market. Charlotte is 24. Nashville is 29. Oakland is 6, PLUS the games still play well in LA.

It was a simplification of the income tax, but as you said, it is close enough for the numbers we are working with.

We all realize that numbers can be manipulated to make them say whatever you want.

The income tax and sales tax from Caterpillar are gains. The income tax and sales tax will not be gains, just a carry over from what they are now.

The truth of the matter is that the Falcons play in the stadium 10 times a year, possibly 11-12 if they make the playoffs. I do not see where a new stadium will generate more usage that the GA Dome currently is. We can’t get a larger bowl game. The Super Bowl may be played in it once, and they have been shown not to be popular. Wrestlemania may not come back in 10-15 years. We are on the cycle for the NCAA Basketball tournament.

Stefan December 10, 2012 at 3:07 pm

from the plant manager:
“The timeline is to have around 300 employees working in Athens by the end of 2013,” Henry said. “When we fully ramp up through 2014, we expect to be around 600 employees. Then as we continue to ramp up with small track-type tractors, our employment should reach nearly 1,000 employees. As demands call for it and we continue to grow this business, we intend to have nearly 1,400 employees by 2018.”

so fully ramped up is 600 employees, if things go well 1400.

the lack of a loss is a gain as well. if we don’t eventually secure a new stadium for the Falcons, they will leave. That’s how NFL franchises work.

Lawton Sack (GATA Eagles!) December 10, 2012 at 3:32 pm

Except for the fact that your statement is not true. 14 teams have moved in the last 91 years, none in the last 15. Neither Arthur Blank nor the NFL has said nothing about moving the team. Sometimes you just got to learn to be happy with what you have.

Stefan December 10, 2012 at 3:50 pm

I handled this point above. Houston and Cleveland would likely have taken teams from other cities, but were granted teams through expansion.

The NFL team won’t bring up moving until they have to, and Atlanta isn’t eligible to move until 2017. I explained that above as well.

poliscigal December 10, 2012 at 12:56 pm

I am pretty sure Stefan is playing devil’s advocate and does not really believe his own hype! The economic development argument is overblown by the stadium’s advocates, which Stefan pretty much concedes. The University of Utah’s Center for Public Policy and Adminstration after reviewing all the studies concluded that “there is no economic growth associated with professional sports franchises and stadiums.”

If Blank wants a new stadium, he can pay for it himself. There are precedents for sports teams paying 100% of construction costs — the MetLife Stadium in New Jersey, for instance, where the Giants and Jets split the costs. Surely, the hotel tax can be put to better use in developing the downtown area for tourism. The idea that public funds would finance 30% of the project, and the Falcons would control 100% of the revenues is truly mind boggling.

David Staples December 10, 2012 at 1:11 pm

Now there’s an idea… maybe Arthur can put in the ability to make an ice rink and buy an ice hockey team to split the costs with. Or perhaps get the Atlanta Steam (I think that’s the name they ended up with) to play there on days when the Falcons are away instead of the Gwinnett Civic Center:

http://www.11alive.com/news/local/story.aspx?storyid=259369

Stefan December 10, 2012 at 3:10 pm

Ok, MetLife Stadium, we can talk about that. My recollection is the state had to pay off about 150m in old loans AND this was the result of a negotiation in which the NFL teams were in breach of the original operating agreement. So this was a settlement of a lawsuit, not just a product of a no-consequences negotiation. Second, the Falcons are paying 70% of the freight here, that’s more than either the Jets or the Giants. It is quite unusual that two NFL teams play in the same stadium and it creates additional funding strategies. Those weren’t available options here.

ugadog December 10, 2012 at 1:36 pm

Caterpilar is projected to create 1400 jobs and its suppliers another 2800 for a total of 4200. Don’t know where you got your numbers from.

Stefan December 10, 2012 at 1:39 pm

That’s their own projection. I used their projected numbers too, which are 300 by the end of 2013, 600 by the end of 2014, and IF everything happens as hoped for they MAY reach 1400. I used the most recent Athens Banner-Herald piece. Their analysis seemed more neutral.

poliscigal December 10, 2012 at 3:22 pm

I believe (correct me if I’m wrong, Stefan) that other teams have paid for their own stadiums: Patriots, Panthers, and Redskins. Going forward, it is more likely that people won’t be duped into believing that giving rich guys breaks helps us all (trickle down). The Falcons’ net profit per year is 27 milllion dollars, according to Forbes magazine. If they want a new stadium, they should pay for it.

Stefan December 10, 2012 at 4:12 pm

They are investing 30 years of profits (by your numbers), why should they do more? If the life of the stadium is 30 years, it wouldn’t seem to make sense to invest any more.

Stefan December 10, 2012 at 4:21 pm

I grant you, that’s not really fair, as there will be NFL money that goes toward construction as well as additional funding from seat licenses and the like.

The Last Democrat in Georgia December 10, 2012 at 4:18 pm

This new stadium talk isn’t about the Falcons. Well, it is about the Falcons, but it’s also about keeping the SEC Championship Game (and Basketball Tournament) in Atlanta and out of the hands of Jerry Jones in Dallas.

Ever since Texas A&M joined the league, Jerry Jones has talked with SEC Commissioner Michael Slive on a very regular basis at least once-a-week, every week, in an ongoing effort to lure the SEC Championship Game (and Basketball Tournament) out of the Georgia Dome in Atlanta and into Jerryworld in Dallas.

There’s also rumors that Birmingham is in the very early stages of making plans to build a new football stadium.

Though, I wouldn’t necessarily worry about Birmingham being able to compete with Atlanta on THAT particular level anytime soon.

Even though the SEC is headquarted there, Birmingham is still light years away from even being remotely in the kind of International league that Atlanta is angling into.

freeduck December 10, 2012 at 4:23 pm

Don’t know if you’ve had a chance to read the NY Times series on state and local government incentives to industry, but your comparison of the stadium to Caterpillar brought it to mind, and the Caterpillar deal is in fact included in the first part of the series. It’s a good read. The lesson I took from it is that nobody really measures the actual benefit to communities of these sorts of ventures once they are undertaken, and that it is unlikely these benefits are ever actually realized.

http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html

seenbetrdayz December 10, 2012 at 6:18 pm

You know, with all the computer graphics technology we have these days, I propose a cheap alternative:

Let our football team play in the middle of a grass field in front of an enormous green-screen. Then you can use 3d imaging to re-create a luxurious arena complete with animated fans and cheerleaders. Since it’s not really cheap to go see live sports anymore, and most people watch the game on T.V. with a bowl of cheese puffs in one hand and a remote in the other, it’s not like anyone will really notice or care.

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