Enough Of This Anti-Stadium Silliness, Already

January 15, 2013 9:00 am

by Mike Hassinger · 73 comments

Polls show Georgians don’t like it. Polls show Atlantans don’t like it. Georgia Common Cause opposes it, as does the Tea Party and several people I know, some of whom I respect. But they’re all wrong on this deal to replace the Georgia Dome with a new stadium.

First, let’s address this “public money” nonsense. The Georgia World Congress Center Authority has the legal power to issue bonds, (about $200 million worth) to fund things related to the Georgia World Congress Center “campus,” which includes the Congress Center, Centennial Olympic Park and The Georgia Dome. The job of the authority is to bring convention, sports and entertainment events to downtown Atlanta, and it’s been doing that since 1976 when the Congress Center hosted the Bobbin Convention. From time to time the Georgia legislature put state dollars into various projects on or near the campus -sometimes for direct purchases of land, sometimes for improvements, sometimes for parking -the “stuff” you need to have from time to time keep one of the “top five biggest convention destinations in the country [and] one of the best sports and entertainment campuses in the world” being “biggest,” and the “best.” 

In 1989 the current dome was built to accommodate the demands of then-owner Rankin Smith, because Smith wanted a bigger share of the parking and concession revenues than he was getting by sharing the old Atlanta-Fulton County stadium with the Braves. So the legislature and the governor crafted a deal whereby the legislature let the GWCC borrow $210 million to build the Dome, and let the City of Atlanta pay the borrowers back with revenue generated by a hotel-motel tax. So, are we clear on that? The ONLY reason the hotel-motel tax exists is to pay back money borrowed to build and improve things at the Congress Center, Centennial Olympic Park and the Dome. And since 1989, Georgia hasn’t put a bunch of direct “State tax” dollars into those facilities -it’s been revenue from Atlanta’s (and Fulton County’s) hotel-motel tax. And that’s better than using taxes that all Georgians pay (as they used to do) to create “economic benefit” for Atlanta and the surrounding area. (For you low-information types, “economic benefit” = “jobs.”)

Well, then, how big is that economic benefit? Former Governor Zell Miller claimed it was $10 Billion -but when Politifact fact-checked him, did some of their own calculations, contacted Georgia State University economist Bruce Seaman, and came up with somewhere between $5 billion and $7.5 billion. Assuming the lowest possible number available, Atlanta and the surrounding area gets a $5 billion boost in economic activity because we let the GWCC Authority borrow money to make the Congress Center “campus” attractive to sporting, convention and entertainment events -and then pay those bonds back with revenues from a hotel-motel tax, which is mostly levied on visitors. Yes, it’s a tax, and yes, it’s technically “public” money that could be used for something else -if Atlanta wanted to use it for something else. (They don’t.) But as a means of paying back bondholders, levied only on those folks who choose to stay in a hotel in Atlanta and originally authorized only for the specific purpose of paying for improvements to the things the GWCC Authority owns and operates, it’s about as far from “tax money” as a revenue stream could be and still be called “public.” Put it this way: I live in DeKalb County, and have no reason to stay overnight in an Atlanta hotel. I’ll never be charged a DIME of taxes to pay for this new stadium -and neither will most of the people in Georgia- but we’ll all see more economic activity because of the conventions, trade shows, concerts and sporting events the venue attracts. 

And as for Common Cause’s objection that this process has been devoid of “meaningful public input…” well, go back and click those links. They’re to publicly available news sources, The New Georgia Encyclopedia and the Georgia World Congress Center’s website, which even has a set of chronological links to all the documents about this deal. There’s a public timeline from the biggest media organization in the State for crying out loud! The facts are out there -and have been since the beginning. As my grandmother used to scold us when we didn’t arrive promptly at the dinner table, “Whaddya want, a gilt-edged invitation?” 

Yes, there are LOTS of things that Atlanta and the legislature could spend $300 million on -but none of those other things were the reason for the hotel-motel tax. The reason for that tax was to build the Dome. There’s no denying the Dome benefits Atlanta, the Metro region and Georgia. And creates jobs without raising taxes. 

-Isn’t that what we want the legislature to do?

Baker January 15, 2013 at 9:07 am

“There is no denying that the Dome benefits Atlanta, the Metro region, and Georgia…”

Bingo. So why do we need a new one again?

Mike Hassinger January 15, 2013 at 9:28 am

Better stadium = bigger benefit.

mpierce January 15, 2013 at 2:39 pm

Before the Dome we lacked a large venue. We have a large venue now (and it’s not that old). I would expect far less economic benefit from replacing something we already have.

Bob Loblaw January 15, 2013 at 4:10 pm

Well, Charlotte (not the State of NC) just kicked in $125M to upgrade its stadium. Similar to the proposed Atlanta stadium, the State Legislature would have to approve.

http://profootballtalk.nbcsports.com/2013/01/15/charlotte-council-approves-plan-to-give-panthers-125-million/

$125M to upgrade vs. $300M to replace with a state-of-the-art, retractable roof stadium.

Not paid for by locals and others dining out like in Charlotte, but by hotel guests.

You’ve now seen Buffalo and Charlotte each kick in half of what it would cost Georgians for a new stadium to just make upgrades to their existing ones.

You may not like the idea of hotel guests’ tax dollars going to finance the bonds for partial construction of a new stadium, but you have to admit that the math is better for citizens in Atlanta, where the tax would be levied, than for the citizens of Buffalo or Charlotte, whose elected officials are passing these votes.

Charlie January 16, 2013 at 9:27 am

Really gets old watching the same talking points of “only out of town guests”. The state is buying the land. The state will be waiving sales taxes. The City has hinted at up to $250 Million in bonds for unspecified infrastructure improvements related to this project. And yet Arthur Blank’s letter to the fans and every one of his apologiest lie and say that it’s only the hotel motel tax money paying for this. It’s not.

Mike Hassinger January 16, 2013 at 9:39 am

The state already owns the land -additional purchases will be fractional. Sales taxes are waived on all projects of “regional significance” -not just for this project, right? And if the city of Atlanta wants to donate infrastructure improvements, isn’t that their business? Local control and all that.

Charlie January 16, 2013 at 9:51 am

None of which makes the statement that only $300 Million of taxpayer dollars from hotel motel taxes will be used to finance the project, and “The Falcons will pay the rest”, true.

IndyInjun January 16, 2013 at 10:38 am

Indeed. The $300 million more accurately is the projected bond issuance possible from leveraging up the current $17 million a year hotel motel tax stream earmarked for Dome bond payments (39% of H/M tax), plus a 1% hotel motel tax increase. On an aggregate basis this is 30 years time $17 million or $510 million.

About $100 million remains outstanding on the dome. Proceeds would first go to retiring this amount, hence the borrowing authority has to be something like $300 million to cover the $200 million new debt and initial period before the old $100 million can be retired.

The costs are a LOT MORE than $300 million. Anybody saying otherwise is lying. The devil is in the details and I believe the details spells out a multiple $billion cost shift to taxpayers over 30 years.

Preliminary review of the signed term sheet is flashing WARNING!!!!!!! More later.

Bob Loblaw January 16, 2013 at 11:46 am

So how can you end up with “multiple billions” cost shift to the taxpayers over 30 years on a building that costs $1b roughly and will be paid for with bonds on fixed terms? If your math ($510B) is correct, then the $30oM + the $100M to retire the Dome bond debt, then the monies collected by the Hotel-Motel tax cover the debt. The agreement from the GWCCA and the Falcons can’t have an open-ended obligation on the State to pay more if the facility costs more. Help an old lawyer out, here with the math, sir. Thanks.

IndyInjun January 16, 2013 at 1:20 pm

Patience, Bob, patience. I just started my review last night.

There are so many costly questions I guess I could irresponsibly unload on this thing with the assurance that more than one bullet would strike squarely, but my preliminary works suggests that I might want to do more – a lot more.

Dave Bearse January 15, 2013 at 6:11 pm

Law of diminshing returns.

heroV January 16, 2013 at 10:40 am

The Falcons are actually seeking to have the seating capacity in the new stadium to be smaller than the Georgia Dome’s.

The Last Democrat in Georgia January 16, 2013 at 11:06 am

But with more luxury boxes and high-end seating, I presume.

Bob Loblaw January 16, 2013 at 11:47 am

You ever sat in the upper last row? The lighting rig is below the seats.

griftdrift January 15, 2013 at 9:28 am

Because the business model of the NFL has changed over the last 20 years and now requires new revenue streams that the old facility can’t provide. There are other tangential issues but I don’t want to get down into the weeds. That’s the bottom line.

Ghost of William F Buckley January 15, 2013 at 9:38 am

I remember that what was said about skyboxes at the Braves stadium.

You and Mike both have legitimate points, RE: business model and who gets to vote on the use of their public resources.

It’s gonna be a doozy of a stadium, if and when it gets built.

Ghost of William F Buckley January 15, 2013 at 9:20 am

Mike,

Are you employed by any factions that wish to tear down the perfectly good stadium to build the new-fangled retractable roof stadium?

This project is a poor use of public fund – Atlanta could finance it’s Beltine with these funds. If the net benefit for the Beltline are correct, it offers a much higher return on investment.

That said, we may get that new stadium, despite the good man from Ellijay’s public comments.

Chris January 15, 2013 at 9:28 am

Let’s also not forget that there will need to be improvement to infrastructure (roads, bridges, etc.) to accommodate the new stadium which would probably be in the hundreds of millions of dollars. Where does that money come from?

Mike Hassinger January 15, 2013 at 9:32 am

I’m not employed by anyone who wants to tear down the “soon-to-need-maintenance” stadium, and replace it with one that’s bigger and better and will continue to create jobs in the metro region.
And unless you’re an Atlanta resident and voter, do you have a right to tell them how they should spend the taxes they raise?

Baker January 15, 2013 at 9:39 am

Blank did a huge renovation in what, 2006?, why is it “soon-to-need maintenance”?

I am an Atlanta resident and voter but I also firmly believe that for metro Atlanta to really succeed, the second half of that, the “Atlanta” part needs to be successful. Marginal upgrades to the pro-sports piece of our city’s economy are not what we should be talking about.

griftdrift January 15, 2013 at 9:43 am

You want to talk about marginal upgrades? The renovation of 2006 you mention wasn’t much more than a fresh coat of paint.

mountainpass January 15, 2013 at 9:57 am

$300 Million worth of paint?

griftdrift January 15, 2013 at 10:12 am

Yeah I may have exaggerated. But here’s the bottom line, the reno (which is now nearly 7 years old) took the stadium to a point where it was nearly sniffing modern standards, but now that’s tapped out. You simply can’t build more suites. And you can’t charge PSL fees without certain amenities.

And lest I’m accused of being on the take for the tear down folks, I’ll say it again. I think Baker’s and others arguments are strong ones that need to be heard. However, the headwind they face are more than just a greedy billionaire and his ego.

In my mind they are as follows:

1. As Mike pointed out, it’s not just a change in the law that would be required, but a complete re-thinking of how the original law was intended

2. The Dome is more than the dome, it’s Centennial Park, it’s the GWCC. It’s all the state owned properties downtown that would suffer if we start losing events. Speaking of…..

3. Yes, there’s the Superbowl and how the NFL blackmails cities is heinous, but there’s also….

4. The SEC championship. Jerry Jones is already sniffing around and with the first new NCAA championship game all but confirmed for Jerry World, how long do you think we’ll hold on to our big games as other facilities outpace ours?

There’s a lot to think about here and the conversation needs to be held.

Charlie January 16, 2013 at 9:29 am

Jerry Jones’ stadium is West of every SEC team. Every one, including Texas A&M.

If the SEC game gets moved, it would much more likely be to New Orleans. And their stadium is much older than ours. So I really don’t think the facility is the problem.

The Last Democrat in Georgia January 17, 2013 at 7:02 pm

It’s no secret that Jerry Jones stays in constant contact with SEC Commissioner Michael Slive and the league office in Birmingham in an effort to eventually and steadily maneuver SEC postseason events to his Cowboys’ Stadium (Jerryworld) in Dallas (particularly the SEC Men’s Basketball Tournament and, especially, the SEC Championship Game, which is the jewel of postseason college football conference championship games).

Dallas may be west of every team in the SEC footprint, including Texas A&M, but the fact remains that the addition of Texas A&M to the SEC has put the Dallas market in the geographical footprint of the SEC. It also hasn’t stopped Jerry Jones, a guy with a well-known reputation for being the ultimate hustler, from trying to finagle SEC postseason events to Jerryworld in Dallas.

With the presence of Texas in the SEC geographical footprint, Atlanta isn’t the biggest and/or only game in town anyone.

Mike Hassinger January 15, 2013 at 9:53 am

The “pro-sports piece of our city’s economy,” AND the convention and the other stuff that goes on at the Congress Center facilities are a huge part of what contributes to making the “Atlanta” part successful, and providing jobs to Atlantans and metro Atlantans as well. On ongoing economic advantage and job engine is a better investment than the Beltline boondoggle which may boost the real estate development community, and some engineers and architects with connections to City Hall.

Baker January 15, 2013 at 10:16 am

As far as I know, they’re not talking about redoing the Congress Center or any of those facilities.

Also, as an Atlanta resident, I’m very excited about the Beltline. A massive increase in park space for a city that isn’t exactly known for outdoor recreation is a good project.

You’re just jealous because you live in DeKalb County and can’t keep officials out of jail…. :) Atlanta got out of the Sending-officials-to-prison business way back in 2006..?

(As I write that I know that can’t actually be correct, i’m sure someone went to jail since then…and I’m not counting the county elections chief who got the DUI. DUIs are pretty bad but not corruption and…usually…won’t land you in prison)

Stefan January 15, 2013 at 10:52 am

But they won’t fund the Beltline. It’s either a new stadium or the money goes into the general fund to take $7 off of your property taxes.

Baker January 15, 2013 at 11:09 am

i know that money can’t just be diverted to the Beltline, new/ changes in law would have to occur…mostly my comments about the Beltline were in response to Mike saying it’s a boondoggle….

Stefan January 15, 2013 at 12:16 pm

So, look at it this way. GWCC needs the new stadium to grow, more and better conferences mean more hotel rooms are occupied and at higher rates, which means more hotel taxes for the City of Atlanta, which they can use to fund the beltline.

Baker January 15, 2013 at 1:24 pm

or they can use to fund all the as yet unaccounted for improvements around the new stadium…

Ghost of William F Buckley January 15, 2013 at 9:42 am

Intuitively, a building with a movable roof is going to be a real maintenance nightmare in 20 years.

Of course, by that time, we will be wearing headsets that make us feel like we are at the 50 yard line…

seekingtounderstand January 15, 2013 at 10:16 am

Ghost: Just saw a new tv/projector from Japan that has not hit the market yet in America…..
its like you are on the field. No need to go to games anymore……truly a game changer.

seekingtounderstand January 15, 2013 at 10:11 am

But Mr. Blank allow us to ask could the unwashed share in your profits? When you sell your falcons business care if we get a 10% cut for our investment?

seekingtounderstand January 15, 2013 at 10:13 am

Trusting a group of men to say no to football is like asking a dog to give back a steak bone.

Spacey G January 15, 2013 at 10:16 am

Bottom line is… I drive through the current Dome’s surrounding neighborhoods twice a day, back and forth from work. Outside of the Castleberry District area the place looks like a movie set for something straight outta Third World Nation. It’s sad and pathetic; boarded-up old houses and stores, riddled with poverty and crime, and all sorts of assorted and utter degradation.

The only functioning commercial spots are an overpriced gas station or three, a day-labor shop, the prison, check-cashing joints, a dialysis clinic, and that server-farm on Jefferson. Every now and then a cruddy wing shack will spring to life, for a week or two. Oh, and the Atlanta Community Food Bank over that ways sure is expanding. Supermarkets? Get real. (Wal-Marts don’t count for community-building commercial entities, in my opinion.)

Yet it has this amazing and under-utilized (except for game days) infrastructure of wide streets and roads. Not to mention some lovely Atlanta skyline vistas for any potential luxurious high-rise residences. Oh, and Ga. Power sure likes running loads of its infrastructure alongside the roads on that side of town too, so the power supply seems first rate.

Real estate in the area has got to be dirt-cheap. Invest now! If you really feel this will be the greatest thing for the SW side of Atlanta area since sliced bread. It could very well be.

But didn’t they all run around town saying that very same thing when they built/funded the Dome we’ve got now?

(Jeez. I’ve written yet another freebie op/ed, when I just set out to make me a ‘lil ‘ole comment.)

Spacey G January 15, 2013 at 10:20 am

Charlie, could you change “it’s” to the possessive “its” for me in the above comment? I don’t like typos. Or poor grammar. And don’t wish to be caught waving any around, either. Tx!

Mike Hassinger January 15, 2013 at 10:41 am

Done. We can’t let important public conversations get derailed by typos!

Ghost of William F Buckley January 15, 2013 at 10:48 am

Spacey: Improving the surrounding neighborhoods is similar to the situation that Atlanta Station is now currently experiencing. A $500Million investment and still Home Park holds the area back. Unless crime is abated, no decent investment can be made by GWCC or any other entity.

‘Highest and best use’ drives commercial real estate investment, and crime is a very difficult characteristic to overcome. I, too drive around that area, it has huge potential, but the initiative to make the area safe belongs to Mayor Reed and the Atlanta City Council, area churches, and the residents themselves.

DISGUSTAGORGEYA January 15, 2013 at 10:56 am

some say building the new dome will help bring the super bowl here. well two other cities are banking on that strategy as well. Georgia’s got a mad case of keepin’ up with the joneses’ when it comes to “capital improvements”

Lawton Sack (GATA Eagles!) January 15, 2013 at 1:23 pm

I think they need to just play the Super Bowl every year in Jerry Jones’ stadium outside of Dallas, along with the National Championship game. That stadium is going to end up costing taxpayers billions of dollars across this country as teams try to keep up with him.

Ed January 15, 2013 at 11:27 am

“Assuming the lowest possible number available, Atlanta and the surrounding area gets a $5 billion boost in economic activity”

I say this as someone who has looked a lot at the economics of sports, mega events and stadia… I can’t speak specifically to the Dome I am always highly skeptical of any claims that such events deliver significant ROI because…well, almost universally, they don’t and in many instances are losers.

griftdrift January 15, 2013 at 11:31 am

Difference between singular events and ongoing economic activity.

Ed January 15, 2013 at 11:35 am

Yes. The ongoing activity is singular events that don’t deliver economically, certainly not to the tune of $250 million a year.

griftdrift January 15, 2013 at 11:44 am

No. It’s the integration of multiple vectors of economic activity that are anchored on properties the state has developed. It’s the difference in the economic impact of a Super Bowl vs the economy that involves everything for the new bar district on Marietta to the Aquarium to the new hotels around the park.

None of that happens without the “campus” that is the Dome, the park and the GWCC. And all of that will be affected by the moves that are made here. Including your precious Georgia State.

Ed January 15, 2013 at 11:53 am

Dude, I get it. I am very well familiar with all the projections and how they are calculated (frankly, far more than you) and they rarely deliver the profits people say the can/will/do.

griftdrift January 15, 2013 at 12:01 pm

I am familiar with exactly what you are talking about. The multiplier effect of a singular event like the Super Bowl is dubious at best. So is a singular venue if you look at it in isolation.

However if you look at the each of those being a part of a larger integrated economy over a period of time, the effect is apparent. Ed you may be too young to remember a time when there was no Fairlie Poplar district. No hotel district. No activity downtown of any less than seedy means. I do.

To deny the Dome and others pieces as parts of the whole had no impact on that revitalization is the worst kind of silo thinking.

Ed January 15, 2013 at 12:34 pm

“To deny the Dome and others pieces as parts of the whole had no impact on that revitalization is the worst kind of silo thinking.”

I am not.

Also, your Twitter account is sending me spam.

griftdrift January 15, 2013 at 12:54 pm

Then stop muddying the waters by confusing complex economic systems with single data points. Or you get more spam.

Ed January 15, 2013 at 1:04 pm

I am not. I am saying people should be even more circumspect than they are.

griftdrift January 15, 2013 at 1:19 pm

I’m the last one to believe economic development fairy dust,, especially specious examples like Super Bowls. But neither can we ignore long term trends and not use them for long term future planning.

Now buy me a beer.

chamblee54 January 15, 2013 at 1:05 pm

What is the plan for Rankin Blank to put up $700 million? Is the State of Georgia going to pitch in if he can’t raise the loot? If the State is going to partner with Rankin Blank on this project, then a financial plan needs to in place now.
chamblee54

T-Bone January 15, 2013 at 2:29 pm

Mike makes some excellent points in this post. I’m a moderate who’s willing to march with the Tea Party on this issue, but I’ll admit Mike has given me some pause.

That said, it’s impossible to ignore the optics of an NFL team asking for anyone other than the Falcons or the NFL to pay for a new stadium during an historic economic downturn. Unemployment is still near 8%, we’re fighting over the debt limit, and we just lost the payroll tax holiday. Meanwhile, the NFL continues to increase in popularity and its revenues are climbing. Yet, in addition to fans paying for the rights to watch games on television and for tickets to attend the games, you would also like folks in town to visit relatives who have never seen a Falcons game in their life to chip in on a new stadium for the team. Mull it all over this afternoon while you’re slowing merging onto the Downtown Connector and before you run over those potholes.

I’m sorry, but it just stinks to high heaven.

Ghost of William F Buckley January 15, 2013 at 3:08 pm

“I’m sorry, but it just stinks to high heaven.”

That has never been a criteria to deny political action, anywhere….

northside101 January 15, 2013 at 4:20 pm

“In 1989 the current dome was built to accomodate the demands of then-owner Rankin Smith.”

Lets not be too subtle about it—when we say Rankin Smith made demands nearly 25 years ago, it was akin to someone putting a 9mm to your head and say “give me your money..or else.” In Rankin’s case, “build me a stadium..or the Falcons are off to Jacksonville.” Well, maybe not that directly, but the threat was clear, if veiled. And this was when the team,a fte rnearly 25 years of play, had never had back to back winning seasons.

Getting a Super Bowl here is absolutely not a reason to build it, as the NFL only wants to play that game in new stadiums. So we get it once, and then 10 years later, gotta have another one. Like the old saying, you don’t build your church sanctuary for Christmas or Easter Sunday-size crowds. Or build a bigger house to accomodate your in-laws a few days a year.

Haven’t heard UGA fans saying Sanford Stadium needs to be replaced because it is old, or Tech fans with Bobby Dodd Stadium.

griftdrift January 15, 2013 at 4:31 pm

Different business models. And both have underground upgrades and expansions.

mpierce January 15, 2013 at 8:34 pm

In 2006, the Atlanta Falcons and the Georgia World Congress Center Authority announced a $300 million renovation to the Georgia Dome. The project was separated into two stages. The first stage, which took place before the 2007 NFL season, focused on updating the premium seating areas, including the creation of eight ‘super-suites’ as well as an owners’ club.[8] In 2008, the exterior of the stadium was repainted from its original color scheme to match the Falcons’ team colors, and the stadium’s original teal seats were replaced with red seats in the 100 and 300 levels and black seats in the Verizon Wireless Club Level (200 Level). The entrance gates and concourses were also renovated and updated before the 2008 football season.[9][10] Additionally, in 2009 the two video screens in both endzones were relocated to a new exterior monument sign on Northside Drive. The interior endzones each received a new and considerably wider High Definition replacement video screen that significantly enhances views of replays and provides for state-of-the-art graphics and digital presentations. That year also saw the installation of a completely new sound system, replacing the previous one that was nearly twenty years old.

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

griftdrift January 15, 2013 at 8:41 pm

Point?

The Last Democrat in Georgia January 15, 2013 at 8:57 pm

I think that mpierce’s point is that the Falcons already “blew their wad” so-to-speak, by already spending $300 million to renovate the Dome just a few short years ago all the while seemingly knowing that they were going to turn right around and ask for $300 million more of public money to help finance a brand spankin’ new stadium just about three years after the renovations were complete.

Looks like ol’ boy Blank had the $300 million he needed for a new stadium before he spent it renovating a building that he always intended to replace a short time later.

griftdrift January 15, 2013 at 9:04 pm

I’m fascinated by people who think the world is static.

The Last Democrat in Georgia January 15, 2013 at 10:25 pm

I know, who cares? Because it’s not Blank’s money, right?

So I guess that there is no possible explanation for why Blank spent that $300 million on renovations when he could have been spending it and the $200 million that the Georgia World Congress Center Authority has now and the $700 million that he was willing to chip in, on a new stadium?

SKindregan January 16, 2013 at 11:51 am

mpierce–

I wanted to draw your attention to a factual error. There was not a $300 M renovation to the Georgia Dome in 2006. The renovation was actually $57.8 M.

The 4 phases of renovations were funded through a public/private partnership with the Falcons. The funds provided by the Dome came from surplus revenues and included the following:

2007 – Phase 1 – $23.1M funded by Falcons/ $1.5M funded by the Dome (Authority) – this phase included suite upgrades, repurposing of 40 – 16 seat suites into 8 super suites, audio upgrades in suites, redo of the club lounges, changes to all bowl premium seating, FF&E, HD sets in all premium spaces ,and an addition of a small kitchen on premium level

2008 – Phase 2 – $5.4M funded by Falcons/ $13.3 funded by Dome – this phase included repainting of the exterior, replacement/change out of seats in seating bowl (non-premium), public concourse lighting upgrades, HD sets in all public spaces

2009 – Phase 3 – $12.5M funded by Dome – this phase included new HD video boards and an upgrade from digital production studio to HD production studio

2010 – Phase 4 – $3M funded by Dome – this phase upgraded all audio systems in seating bowl, concourses and other public spaces.

Total: $30.3M – Dome (public)/ $27.5 M – Falcons

The mistake on the reported “$300 million” in improvements originates with an ancient AJC article which included a typo on the $30 million figure and was never corrected by them. Wikipedia then sourced that story and recent authors have utilized that figure. We are working diligently to have these repeated mistakes scrubbed from public records, however, the digital age makes removing all references of false reporting difficult to eliminate.

I hope this helps clarify.

mpierce January 16, 2013 at 4:58 pm

Thanks for the info.

griftdrift January 17, 2013 at 8:07 am

I knew that $300 million figure seemed wrong but couldn’t find anything to refute it. Thanks.

debbie0040 January 15, 2013 at 5:07 pm

The New Orleans Superdome is 10 years older than the Georgia Dome and has survived Katrina. Do you see the Saints demanding a new stadium?

There are times that fees/taxes are collected that is supposed to go to certain things like say teen driver education and they are diverted to other areas. So it would not be at all unusual if the hotel/motel would go to other areas that are a higher priority.

Mayor Reed talked about many more pressing issues Atlanta has during the whole T-SPLOST debate and yet he has 300 million dollars that he wants to use to build a new stadium. Heres a thought, that money could be used for water/sewer improvements and give the already over-burdened tax-payers in Atlanta a break. Instead, Mayor Reed and others want to give a billionaire a break.

George Chidi posted this article on Facebook about the stadium. It is well worth sharing:

http://www.facebook.com/gchidi

The Falcons stadium negotiations are fundamentally stupid, and if the folks from the GWCC Authority are advocating for the deal, at all, that suggests a kind of untoward influence from Arthur Blank’s people on a state-owned organization that is supposed to act in the interest of the public. The GWCC has fiduciary responsibility to the taxpayer; it shouldn’t be taking sides in public to say that it would benefit.

Arthur Blank’s annualized return on investment, given the financial leverage used to purchase the team, has been at least 12 percent. I was interested in the conditions of his current bonds because the question to ask is: how much does this have to benefit him financially for the deal to make sense to him? I think the key thing is how this shifts revenue away from the city and into his pocket.

The city and the county are being asked to put up $300 million for 30 years, plus whatever the city’s infrastructure cost might be — call it another $100 million. Forget profit: to break even, the city would need to earn an additional $25 million a year or so in hotel taxes and Dome-associated sales taxes, over and above the alternative case of not building the dome.

The metro Atlanta area has about 95,000 hotel rooms … but only Fulton County hotel rooms would pay the tax. Downtown Atlanta has about 17,000 hotel rooms, give or take. Let’s say there are another 28,000 in Fulton County. Each room would have to generate about $555 in additional financial benefit every year for the bonds just to break even. At a tax rate of 8 percent, that’s $6,944 in additional spending per room, per year, over and above what’s being spent now.

In 2006, the GWCC attributed about $23 million in tax benefit to the Georgia Dome. Total. That’s hotel taxes, sales taxes, income taxes for workers there, et cetera. Blank is suggesting he can double that for the city with a new stadium. Tell me, are there capacity problems at the Dome? People complaining about sold-out games? Not enough days in the week to book events? Any indication at all that demand is twice as high?

Suppose Blank takes the Falcons to LA, which is the worst-case scenario and not entirely realistic, given the restructuring costs Blank would probably incur. Atlanta still has the dome, so they would still attract all the events it gets now other than football. If football is 25 percent of the revenue, the city would be looking at a loss of about $6 million a year in taxes.

Gwinnett has about 15,000 hotel rooms, most of which are kind of crappy. Triple the revenue-per-room number I laid out above to cover a $400 million bond. Never mind that the good citizens of Gwinnett would shoot their highly-suspect commissioners if they even suggested building a stadium there using public money, given what’s happened with the AAA baseball park (and the recent arrests and convictions for corruption on the commission.)

No. This is about increasing the average revenue per attendee for Arthur Blank at Falcons games. Period.

The Falcons sold about 550,000 tickets this year, roughly 70,000 per game at 97 percent capacity. Assume they can keep a new 80,000-seat Dome filled to 95 percent. That’s an extra 55,000 tickets a year, or about $4.5 million if the mix stays the same. This, assuming that the stadium isn’t one big corporate box seat with a few regular stands thrown in for the hoi polloi. You tell me what to expect. More likely, the stadium is rebuilt with about 75,000 seats … but the luxury box mix is going to change dramatically. It’s not going to be $4.5 million. I suspect the annual revenue increase target is closer to $35-45 million. That would put it in line with other new stadiums.

Blank has to come up with $700 million to construct the stadium. He can borrow half of it, probably. If he’s looking for 15 percent return on investment, his $350 million needs to generate an additional $52 million in profit for him, which is steep. But … suppose he doesn’t have to borrow any of it. Suppose he doesn’t need to put almost any of his own money in.

A new stadium allows Blank to sell personal seat licenses during construction, which he certainly can’t do right now. In a stadium of 75,000, suppose he sells 37,500 PSLs for an average of $7,500 each — that means he gets an additional $280 million in capital up front. Blank pulls $70 million out of his change drawer and voila.

Hell, he might be able to raise his entire stake strictly from seat licenses.

The benefit for him is that he captures all of the upside, and is levered like mad — he gets the benefit of incremental increases in ticket prices and firm value on a relatively small percentage of the actual invested capital. Because the additional revenue generated by the increased ticket prices and luxury suite sales ultimately increases the potential sale value of the team. Instead of a $1.3 billion Falcons franchise, Wall Street would value it at the discounted value of 30 years of this new cash flow. $40 million, over 30 years, or about another 800 million dollars. Instantly.

Arthur Blank makes $800 million if this deal goes through. On an out-of-pocket investment of something between $70 million and zero.

griftdrift January 15, 2013 at 5:23 pm

I thought you were about local control, Debbie

rrrrr January 16, 2013 at 4:25 pm

Your extremely detailed challenge of the data presented above has been duly noted…
(Nothing Debbie posted seems to contradict the position of local control, but the cash flow presented is intriguing indeed.)

As pointed out earlier, spending like this just can’t be studied in a vacuum any longer.

Just for grins, is there any reason the GWCC as we know it today isn’t named the FULTON or ATLANTA WCC? Answer: Owner-State of Georgia

Perhaps the county/city should BUYOUT the state interest?

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

At the time opened in 1976 the Georgia World Congress Center was the first state owned Convention Center in the United States. The A, B, and C buildings of the GWCC (the actual Convention Center), Centennial Olympic Park and the Georgia Dome are all run by the Georgia World Congress Center Authority under the auspices of the State of Georgia and funding for new expansions and other major project come from the Georgia General Assembly.

griftdrift January 17, 2013 at 8:05 am

“Nothing Debbie posted seems to contradict the position of local control”

First paragraph – “Heres a thought, that money could be used for water/sewer improvements and give the already over-burdened tax-payers in Atlanta a break”

Dave Bearse January 15, 2013 at 6:22 pm

Mike, you’re implying the Dome is 14% older than it actaully is. It opened in 1992, not 1989. The Dome is less than 21 years old. Hell, that’s not even twice as old as the average age of cars on the road.

Nonchalant January 15, 2013 at 7:13 pm

And when this new stadium is funded, when we see once again the affairs of state upended for a private business, when average guys are paying seat licenses and ticket prices through the nose just so they can bond with their sons, we will once again see the truth of Thucydides–”The strong do as they will, the weak suffer as they must.”

seekingtounderstand January 15, 2013 at 10:51 pm

The men at the dome will give them the money because its football. So for once could you put in the deal that gave something to the poor when it sales for a hugh profit?
Mr. Blank must give the state of GA a cut of the sales price that would go into a trust for the benefit of Atlantas homeless veterans.
A trust that would be run by Mother Teresa or Clark Howard or God. No politicans and no corrupt public housing authorities.

Daddy Got A Gun January 16, 2013 at 7:03 am

Mother Teresa pass away in 1997. She’ not available.

Clark Howard supported TSPLOST. He’s not to be trusted.

God. He has a better gig going.

IndyInjun January 15, 2013 at 11:33 pm

This is a grand deception.

We will expose it.

Here.

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