All that Glitters…

January 29, 2013 9:15 am

by Stefan · 98 comments

The new home of the Los Angeles Falcons of Los Angeles?

No, not the Staples Center, that thing behind it.

Arthur Blank is ramping up efforts to get a new stadium in Downtown Atlanta approved – by suggesting business groups from Los Angeles have been sniffing around our Atlanta Falcons about a move three hours into the past.

In speaking to the Mayor and some Atlanta city council members, Blank has warned in non-specific terms that LA is a very nice place with great weather and celebrities live there.

Moving to LA has long been the spectre called upon by NFL owners to encourage their current local governments to improve or replace their stadia, but in the past that has never resulted in a team actually moving there. However, now there are plans for a stadium to attract an NFL team on a timeline that dovetails nicely with a Falcons move.

Despite the other hurdles that still remain for a LA move (other team owners approval, actual finding of buyers, lease terms, massive smog, Amanda Bynes driving), that the Falcons owner is mentioning LA is a significant change in the negotiations. Next step: Brinkmanship and ultimatums, which are my favorite part of any healthy relationship.

UPDATE: Falcons move ahead with design and narrow down architecture firms. (AJC)

 

griftdrift January 29, 2013 at 9:20 am

Mayor Reed was on 790 The Zone five minutes ago and flat denied Blank or the Falcons had anything to do with this story.

Stefan January 29, 2013 at 9:38 am

I’m sure he did. This is the “implied threat” stage, but apparently the City Council members weren’t willing to go along with it. Want to guess at the two who called Diggs? I do.

griftdrift January 29, 2013 at 9:41 am

Anonymous sources. Connections made by supposition. Yeah, we’re at that stage.

I encourage anyone to go to the 790 The Zone page and listen to the interview themselves. I’m sure it’ll be up soon since they are THE ONLY MEDIA STATION THAT ACTUALLY ASKED THE MAYOR TO COMMENT.

Judge for yourselves.

Stefan January 29, 2013 at 10:23 am

Every page on the 790 site has the Falcons logo as the background. Just sayin’.

griftdrift January 29, 2013 at 10:28 am

They no more hide their affiliation than Peach Pundit does. Listen to the interview and you tell me if they softballed the questions.

Stefan January 29, 2013 at 10:32 am

I would love to and will as soon as they post it. I am not suggesting they are hiding an affiliation – just that they have one.

What affiliation are you suggesting that PP is or is not hiding?

Ed January 29, 2013 at 10:46 am

You know they paid a lot of money for the AM-radio broadcasting rights and the marketing licenses that go along with that, right?

griftdrift January 29, 2013 at 1:41 pm

Yep. Point?

Ed January 29, 2013 at 9:42 am

Another hurdle for the Falcons: there are literally multiple teams in California alone for whom it would be beneficial to move to L.A. and the league would be able to win league approval.

This is such a bluff and anyone who falls for it (or tries to use it as a bargaining chip) is a bigger idiot than me and grift…combined.

griftdrift January 29, 2013 at 9:42 am

That’s a high bar

Nathan January 29, 2013 at 9:45 am

We still love y’all though….well, tolerate, at least. :)

Stefan January 29, 2013 at 9:48 am

The Chargers would make more sense as a straight move, but as a purchase agreement, The Falcons, Jaguars, etc aren’t bad targets. When was the last time the NFl turned down an owner’s request to move? Do you know, I am seriously asking.

Three Jack January 29, 2013 at 9:59 am

Oakland to LA early 80s which led to lawsuits.

Stefan January 29, 2013 at 10:04 am

Good point. So it ended up being cheaper to move and litigate than to stay and abide by the league and lease dictates.

Three Jack January 29, 2013 at 10:44 am

Not sure about cheaper to move, we’re talking about Al Davis here. He was determined to move despite owners voting unanimously against him. Then it became a battle of mine’s bigger than yours….if I remember correctly, Davis ended up winning in the courts and on the field.

Ed January 29, 2013 at 10:01 am

Don’t forget the Raiders who have already expressed interest in moving…

It has happened, can’t remember when but the League is pretty happy with its teams and doesn’t want too much change and put in extra barriers for an LA move.

Stefan January 29, 2013 at 10:05 am

They have long militated for a team in LA. The league sees it as a problem – having the #2 market without an NFL team isn’t particularly good for business.

mpierce January 29, 2013 at 10:28 am

It’s good for owners as they use L.A. in negotiations to get more public money.

Bob Loblaw January 29, 2013 at 10:19 am

The Raiders and Oakland have a commission studying a new stadium in Oakland right now.

Nathan January 29, 2013 at 9:44 am

Bernie Marcus spent millions of dollars to give Atlanta the Georgia Aquarium.

Arthur Blank wants Georgians to give millions of dollars to give himself a gift and is using scare tactics, threats, and ultimatums to get his way (if he’s not now, then he probably will when it looks like the deal will fall apart)?

Seriously, Mr. Blank, is Atlanta in dire need of a brand new stadium? If it’s such a “great deal”, then why not get a few of your buddies together to fit the bill…maybe even sell the naming rights to some of the sections. I’m sure folks wouldn’t mind sitting in the “Delta”, “Kia”, “AFLAC”, “Coca-Cola”or even “Home Depot” section of seating.

griftdrift January 29, 2013 at 9:48 am

Or since he doesn’t care about Atlanta, he could just build his own stadium outside the city limits.

And they are going to replay the interview in a couple of minutes. Especially if you have heard the line “the current stadium is fine” line. Mayor Reed has some interesting numbers on that.

Of course he’s obviously an advocate so YMMV.

Oh, and comparing an NFL franchise to an aquarium? Comparing apples to elbows.

Mike Hassinger January 29, 2013 at 9:52 am

” Georgians to give millions of dollars to give himself a gift…” Nathan that is an absolute lie and you should stop repeating it.

Baker January 29, 2013 at 10:46 am

Are Georgians going to be staying those hotels and motels? If the law were changed would it be possible to spend this money on other things?

If the answer to both of those is yes, then what Nathan said is definitely not a lie.

Mike Hassinger January 29, 2013 at 10:54 am

Yes, it is. The hotel/motel tax revenue goes to the GWCC bonds -not to Blank. The tax was created specifically for the purpose of building a dome, before Blank owned the Falcons. No Georgian who wants to avoid paying the hotel/motel tax is forced to pay it ever.

Putting hypotheticals in front of a statement that is a lie doesn’t make the statement more true.

IndyInjun January 29, 2013 at 11:21 am

Those are GEORGIA bonds, are they not? The Barrett Sports studies, adjusted for 2011 financials, show in excess of $725,000,000 HM taxes go to the new Falcons stadium over the 30 year term and that as much as $464,000,000 in bonds could be serviced by that stream (the 39.3% share that goes to stadium), and that was without figuring higher revenues obtained and lower interest rates since then. This says #1 that if they are truly ‘only’ wanting $300 million that $150 million of the state’s bonding authority (that could be used to fund other things) is being wasted.

There is more – a lot more. I support doing this deal, but the numbers need to ALL be put on the table and Blank needs to give up $100,000,000 or more.

IndyInjun January 29, 2013 at 11:20 am

I agree totally with Baker

Noway January 29, 2013 at 9:49 am

No big loss if the go, take the Hawks with you.

Ghost of William F Buckley January 29, 2013 at 9:49 am

@DIRTYBIRDS, @ABLANK:

Delta is Ready When YOU Are….

griftdrift January 29, 2013 at 9:50 am

Didn’t take long to reach the bottom

Ghost of William F Buckley January 29, 2013 at 10:52 am

You are right, Blank pulls a lowly ploy used in RE negotiations, “I’ll leave you.” To which any good negotiator says, “OK.”

griftdrift January 29, 2013 at 11:02 am

A lie begets a lie. The only person speaking on the record about the conversation in the City Council flatly denies Blank made any threat.

Ghost of William F Buckley January 29, 2013 at 12:04 pm

A ploy is not a threat.

griftdrift January 29, 2013 at 3:24 pm

I have some angels and pinheads for you to play with

Trey A. January 29, 2013 at 9:51 am

Not surprised. Blank is nothing if not shrewd. He took the Smiths’ good ol’ family business and turned it into a money-making machine.

The Smiths were ridiculed in this town for years for basically running the Falcons like a small town mom and pop shop–incredible loyalty to employees, fans and the city, albeit without the world’s greatest business acumen.

Blank roams the sidelines like some of the most ridiculed and controversial owners in sports. He’s repeatedly jacked up ticket prices. He bought out nearby parking to jack up those prices. He unceremoniously ran the only coach to ever take our team to the super bowl out of town. He payed #7 some $70 million and supposedly knew nothing about his off-the-field activities (think about how smart and experienced Blank is and try to believe that). Now, he wants to tear down the Dome, use public funds to replace it and is supposedly holding up the spectre of a sale and move as leverage. And yet, it’s nearly impossible to find anything outside of universal adoration for this guy in the press–especially the Atlanta sports press.

Stefan January 29, 2013 at 9:57 am

Huh? Rankin Smith did the same thing in 1989-1990? And loyalty to employees? Do you think we should still have #7 around?

griftdrift January 29, 2013 at 9:59 am

Actual what Rankin Smith did was flat out say, I’m moving this thing to Jacksonville if you don’t build me a stadium and we built him a stadium with 100% taxpayer funds. Read those last three words again.

Not the same.

But congratulations to Fox 5! The Blank threatened to move story now has unstoppable momentum!

Stefan January 29, 2013 at 10:00 am

True, what Rankin Smith did was much higher on the tyrant scale, but I was trying to let Trey down easy.

Three Jack January 29, 2013 at 10:09 am

Smiths – loyalty….ha! As Grift points out, Rankin Sr. was all but calling the moving trucks for his impersonation of Jim Irsay, Sr. The Smiths were a joke.

Blank definitely raised prices, but he did so while also consistently putting a quality product on the field unlike his predecessors.

Ed January 29, 2013 at 10:17 am

Yes. I remember when there were multiple games with a media blackout. The previous ownership was a joke and to fault Blank for maximizing the NFL for the cash cow that it is is risible.

Harry January 29, 2013 at 9:55 am

Not worried about LA, but I’ll go against the grain and say that Atlanta and Georgia need to put some skin in the game here. The Falcons are on the ascent and worth an investment. Let’s not be penny wise and pound foolish.

Mike Hassinger January 29, 2013 at 9:56 am

Quick what has a-
Total economic output increase of $1.21 billion; $431.4 million in additional labor income; 13,452 in added jobs; $57.2 million in additional state tax revenue; $31.5 million in additional sales tax revenues for local governments; $17.0 million in additional hotel/motel tax revenues for local governments; and out-of-state attendance of over 980,000 people generating over 2.2 million out-of-state visitor days.
Do you want to ‘run government like a business’ or not?

Stefan January 29, 2013 at 10:33 am

The Caterpillar plant?

Baker January 29, 2013 at 10:45 am

Umm…the Georgia Dome? Which is precisely what most of us are all advocating keeping.

Mike Hassinger January 29, 2013 at 10:59 am

The GWCC campus. And that’s just from LAST YEAR! Why don’t you want to enhance that economic powerhouse? Georgia has been paid back MANY times over for co-signing (not taxing) the bonds it took to build the Dome.
This is the best deal the State’s ever gotten, but y’all are so short-sighted you treat it like the Great Yazoo Land Fraud.

Baker January 29, 2013 at 11:13 am

You’re right but it’s the best deal of a wholly rotten system. Why just sit and take it? And we’re not building a new GWCC campus, we’re building a new stadium.

Seen Nealz Nuze today? Sure he’s crazy & over the top but you can’t ignore certain points.

http://www.boortz.com/weblogs/nealz-nuze/2013/jan/29/atlanta-taxpayers-bend-over/

“You also need to know that all of the grand words and promises about the economic impact of new sports stadiums are vastly overstated. Andrew Zimbalist, a professor at Smith College and a leading sports economist, has said “Generally speaking the independent research suggests that we can’t anticipate any economic impact” from sports teams and stadiums. . . . .

Robert Baade is a sports economist. Baade found “no significant difference in personal income growth from 1958 to 1987 between 36 metropolitan areas that hosted a team in one of the four premier professional sports leagues and 12 otherwise comparable areas that did not.” The authors’ conclusion: Arenas put a drag on the local economy by hurting spending on other activities in the city and boosting municipal costs such as security. OK … the study may be a bit old, but stadiums were quite a bit less expensive then. How can this situation be improved by multiplying the cost of a new stadium?

There’s another recognized expert on the subject, Roger Noll, an economics professor at Stanford University. Noll has found that when it comes to new jobs, yes … building a new stadium using taxpayer funds will create new jobs .. but at great cost. Remember Camden Yards in Baltimore? Noll’s study found that every job created by that stadium cost about $125,000 to create. Other Baltimore redevelopment programs managed to create jobs for about $6,000 a pop. “

Mike Hassinger January 29, 2013 at 11:55 am

Old studies versus current numbers. Baltimore vs. Atlanta. “Recognized experts” versus your own eyes. Just because you won’t change your mind doesn’t mean you’re not wrong.

Baker January 29, 2013 at 12:12 pm

I recognize the huge impact of the GWCC campus but the marginal impact of a new stadium will not be worth the new money spent, of which we still don’t have a real number.

Mike Hassinger January 29, 2013 at 2:31 pm

What new money spent? The hotel/motel tax that was created, I repeat for the 10 billionth time, for the express purpose of building domes. The money borrowed from the bond market?
Do you realize how idiotic and close-minded you sound when you say it’s not “worth this new new money of which we don’t have a real number” –? If you don’t know the number, you can’t evaluate the worth.
We do have numbers. You just don’t like them.

Baker January 29, 2013 at 3:00 pm

Ok Mr. Smarty-pants: What is the number that the city is going to spend or has admitted it will spend on infrastructure upgrades for the area around the proposed new stadium?

Mike Hassinger January 29, 2013 at 3:12 pm

I don’t know. I’m not a city taxpayer so it doesn’t concern me what the city of Atlanta chooses to spend on its infrastructure. Perhaps you should take your concerns up with the Mayor and Council and not the Georgia legislature.

Baker January 29, 2013 at 3:17 pm

“not the Georgia legislature.”

Umm…is the law that allowed this not from the Ga legislature? And does the Ga legislature not have to vote to allow the extra $100 MILL in bonds? Maybe this is not the case, I’m a mere close-minded idiot.

IndyInjun January 29, 2013 at 11:28 am

The 2011 numbers for the Dome were 1.53 million attendance, of which 0.65 million were for Falcons games. Of the total GWCC complex, the Falcons attendance is even smaller.

As for the financial results, what is the value of the seats rights/costs, food/bev, etc belonging to nonFalcon events being transferred to the Falcons? What does the agreement do to the $14 million the Dome made in 2011?

Mike Hassinger January 29, 2013 at 11:51 am

$14 mill? Is that gross or net? I heard the net is more like $1 mill or $1.5.

IndyInjun January 29, 2013 at 10:23 pm
David Staples January 29, 2013 at 2:26 pm

“out-of-state attendance of over 980,000 people generating over 2.2 million out-of-state visitor days” – “The GWCC campus”….

So how many of those 2.2M out-of-state visitor days do you think are attributed to Falcons attendance and how many are attributed to other events? You know the GWCC has a number of conferences and events all year long that have absolutely nothing to do with the Falcons, right? Just looking at some of the upcoming events… none of which use the Dome:

International Production & Processing Expo
NACAC National College Fair
CheerSports 2013 National Championships
Bronner Brothers International Mid-Winter Hair Show
SECO International
Move Production National Dance Competition
Atlanta International Auto Show
Northwood University Florida
2013 Big South National Qualifier
National Propane Gas Association

http://www.gwcc.com/event_calendars/gwcc_calendar.aspx

Mike Hassinger January 29, 2013 at 2:36 pm

Better Stadium = better GWCC campus. Old, aging dome = old, aging campus. Pull the hotel/motel tax out of the closed loop of financing the operations of the Campus (which includes the Dome/new stadium) and then Georgia taxpayers WILL be on the hook for 100% of the maintenance and upkeep of the property.
If the State is going to be involved in a private enterprise like this, I prefer minimal risk to the taxpayers, and a profit where/when possible and a corona of jobs and economic activity, with no new taxes. This deal does all that.
But then, I’m a conservative.

David Staples January 29, 2013 at 2:49 pm

Oh, I certainly understand the aspect of wanting minimal risk for taxpayers and a profit when / where possible… but perhaps this is our chance to have the government get out of a business is perhaps shouldn’t be involved in in the first place, no?

Just looking through Wikipedia, it shows the state of Georgia owns the Georgia Dome, yet the “Atlanta-Fulton County Recreation Authority” owns Turner Field and the Phillips Arena. Just throwing out ideas here out of curiosity (I don’t stay in hotels in Fulton County, nor do I live in Atlanta / Fulton)… what is the possibility of Blank teaming up with the Atlanta-Fulton County Recreation Authority to build the stadium he wants? Seems like that would leave the state with the Georgia Dome, which if no longer necessary means that the hotel motel taxes could be used on renovations / upkeep of the rest of the GWCC, no? Aren’t there perhaps some upgrades we’d like to see to the other moneymaking part of the GWCC campus that doesn’t have to do with the usage of the Dome that could perhaps lure even more conventions here?

Looking through the calendars, it looks like the Dome is being used much less than the rest of the GWCC. Compare the Dome calendar to the previous GWCC calendar I posted the link to:

http://www.gwcc.com/event_calendars/DOME_Calendar.aspx

Mike Hassinger January 29, 2013 at 3:10 pm

Well, if you don’t want the state to subsidize business, then let’s make trucking companies build their own roads. But right or wrong, we’ve been in the Dome-convention-tourist business for 40 years, and let me be clear: getting out of it will cost the taxpayers of Georgia more than staying in it will.

Can’t re-direct the revenue without changing the law that created it. $200 million in State-backed financing is already approved -I think it just needs re-authorization if that hasn’t been done. I spotted the Atl-Fulco Rec Authority’s bonding capacity about a month ago, and I think they could issue $100 million in bonds. $200 million in bonds from the GWCC, $100 million in bonds from the AFCRA, $700 million from the Falcons, and *poof* a new stadium. State will probably make a little less money, but them’s the breaks.

David Staples January 29, 2013 at 3:40 pm

The road thing is an interesting comparison, but I don’t think it’s correct. It’d be more like making trucking companies buy their own trucks (though there are issues with that comparison as well). Roads (with the exception of tolled roads) are “free” for the general public to use – paid for by all who pay a fuel tax or various other taxes which end up going to pay for the roads. But you don’t have to pay to use the road directly when you go to the grocery store or even to the Falcons game. Now, if we’re talking about opening up the doors of the Dome for free entry like we would a public park (or a road), then that I would think would be a better comparison. But we’re not talking about doing that, right?

I’m not saying that we should immediately get out of the Dome-convention-tourist business immediately… but I don’t think the state getting out of the stadium business would be as expensive as you propose. I would propose the state hanging onto the rest of the GWCC complex and running that alone as a profitable business – without the Dome / stadium aspect which has only 15 days worth of events on the calendar in addition to half of the Falcons football season. It seems to me that Georgia high schools also used to hold season opening football games at the Dome as well… does that still happen? (Didn’t see it on the calendar.) If not, are we really only holding 25 days worth of events at the Dome per year (15 days plus 10 Falcons games including preseason)? That’s less than 7% occupancy.

So when are we going to open those doors up to the public to be able to go play on the field on non game-days? ;-)

bgsmallz January 29, 2013 at 4:44 pm

David-

Just as an FYI…the GWCC isn’t a profitable business without their primary and, to my knowledge, only permanent leaseholder…the Atlanta Falcons. Counting event days or occupancy is less helpful that counting dollars from the occupied days, no?

The difference to the GWCC is about 4.5M a year in revenue if the Falcons aren’t on the campus…which pushes the GWCC from being 2.5M in the black annually to about 2M in the red annualy.

How do you suggest the GWCC turning that loss into a profit?

I have a suggestion…a public-private partnership.

In my ‘hypothetical’… that the best way for the state to run the GWCC as a ‘profitable business’ as you suggest is for the state to float $300M in bonds in a private-public partnership to build a $1B building from which the revenue is derived through lease/license fees and other fees to keep the entire GWCC in the black without other direct subsidies from the state or the City.

And this whole idea that in order to have a public purpose, the building has to be open fully to the public for whatever use they want is poppycock. It’d be fun to have birthday parties at the courthouse after hours. It’d also be fun to drive police cruisers when they aren’t in use. But obviously that whole line of thought is ridiculous and doesn’t make any sense in this instance either.

Let the troll-bombs of inaccurate information that do nothing to move the discussion forward commence in …three….two….one….

bgsmallz January 29, 2013 at 5:10 pm

BTW- If there was a modify, I would add in a :) after the sentences on poppy cock and police cruisers. That was supposed to be a rather light comment and instead came off a bit ‘jerky.’

Baker January 30, 2013 at 11:36 am

“BTW- If there was a modify, I would add in a :) after the sentences on poppy cock and police cruisers. That was supposed to be a rather light comment and instead came off a bit ‘jerky.’”

Ha. Love that. Funny internet happenings.

mpierce January 30, 2013 at 12:05 pm

The difference to the GWCC is about 4.5M a year in revenue if the Falcons aren’t on the campus…which pushes the GWCC from being 2.5M in the black annually to about 2M in the red annualy.

How do you suggest the GWCC turning that loss into a profit?

Is that before or after the Dome bonds are retired (in about 5yrs)?

bgsmallz January 30, 2013 at 1:05 pm

Present tense.

mpierce January 30, 2013 at 2:17 pm

I believe the current lease runs through 2020 (after the bonds are expected to be paid). 2011 Debt service interest was $6.8M. So when would this $2M in the red occur?

bgsmallz January 30, 2013 at 2:38 pm

The lease doesn’t expire in 2020. It expires on the later of year 20 (which has passed) or the maturity of the bonds….which is pegged at 2017-ish.

And just so I understand you clearly, your suggestion is that when the bonds are paid off, instead of using hotel/motel tax to pay bonds on a new building which would most certainly generate more annual revenue to the GWCC in license fee payments, royalties, subtraction of costs that will be born by the Falcons (staffing, insurance, etc.), etc., the city of Atlanta should just use roughly 66% of the current hotel/motel tax payments to instead directly subsidize the operational losses of the GWCC so that it doesn’t run in the red?

I’m really struggling to understand how direct subsidies to a state owned/run organization is true conservative while subsidizing a public/private partnership that generates more revenue to said organization is not conservative.

mpierce January 30, 2013 at 3:07 pm

Interesting how your definitions are changing.
If we use the hotel/motel to pay for a new stadium it is without direct subsidies. But using it without financing a new stadium is a direct subsidy. The current (2011) $14M in net income from the Dome includes $18M in hotel/motel revenues, so we are already subsidizing operational losses so that GWCC doesn’t run in the red.

which would most certainly generate more annual revenue

Net revenue? That has yet to be seen. The new deal would transfer more revenue streams to the Falcons and there would obviously be new bonds to pay for.

bgsmallz January 30, 2013 at 3:38 pm

I see…so my ‘definitions’ are changing but the fact that your premises and ‘facts’ are proven wrong…over and over again…that’s not a problem? :)

I think servicing bonds is by definition different than paying for operating revenue short-falls. I’m not sure what person would actually argue that they are the same. Related? I guess so…but the same? No.

Anyway, I’m spent…feel free to continue to justify your beliefs however you want..with facts, premises, whatever… You’ve convinced yourself that the Falcons aren’t a huge part of the engine driving revenues for the GWCC and want to argue against anyone that says otherwise…including Mr. Math. Carry on.

mpierce January 30, 2013 at 4:19 pm

My numbers came from the GWCC (link provided above by IndyInjun). Perhaps you should look at it. But if you take issues with those number feel free to provide a better source.

Yes the Falcons bring in a lot of revenue to GWCC. I have never claimed otherwise. But there is a difference between gross and net revenues. The NSP term sheet shows quite a bit of that revenue moving to the Falcons from the GWCC. That with the additional costs of building a new stadium have an large effect on net revenues (something you apparently want to ignore).

FYI, I get along with Mr. Math just fine. I happen to have a Math degree.

The Last Democrat in Georgia January 29, 2013 at 9:05 pm

David Staples, January 29, 2013 at 3:40 pm-

“Roads (with the exception of tolled roads) are “free” for the general public to use – paid for by all who pay a fuel tax or various other taxes which end up going to pay for the roads. But you don’t have to pay to use the road directly when you go to the grocery store or even to the Falcons game.”

…But we should as motor fuel taxes should be eliminated and drivers should have to pay for each use of the road, at least on major roads which have the greatest need for frequent and constant maintenance and expensive improvements and upgrades.

“It seems to me that Georgia high schools also used to hold season opening football games at the Dome as well… does that still happen? (Didn’t see it on the calendar.)”

…You mean the Corky Kell Classic? Yep, that still happens, five Saturday games that mark the ceremonial start to the high school football regular season in Metro Atlanta.
http://www.gwinnettdailypost.com/news/2012/dec/15/matchups-announced-for-2013-corky-kell-classic/

Engineer January 29, 2013 at 11:07 am

I say, let them leave for LA. I’d rather support the routinely bad Jacksonville Jaguars than keep hearing this same thing over and over.

drjay January 29, 2013 at 11:41 am

no, if the falcons leave, i won’t be able to go to atl to watch the steelers in years when they play the nfc south….

Nonchalant January 29, 2013 at 12:14 pm

Having lived there, I’d advise Arthur that if he likes trees, they are somewhat scarce, as well as to be sure to leave for games with time to spare. L.A. traffic is awful.

As far as the NFL, I certainly understand why they would not want a team in the hometown of Martin Luther King, Jr. My best wishes to all of them.

Vesuvius January 29, 2013 at 12:21 pm

I think you are missing what is really going on with this “announcement.” Of course the Falcons are not going to L.A. There is, however, the problem of the $200 million dollar cap on the bonds that can be sold that is $100 million below what is “needed.” While the State would be happy to foist this extra burden on the public right now, it would take a law change that legislators are not willing to make because of constituent concerns. This panic piece of information – however untrue – is being offered up as something legislators can tell their constituents they had no choice but to act upon to prevent the loss of the Falcons when they ultimately break down and vote to increase the cap this session.

Balderdash? Of course. But it is an often used, tried and true tactic by government officials and their beneficiaries to get what they want.

I have not looked on the Ethics Commission website, but I would hazard a guess that whoever is lobbying this matter for the Falcons probably has folks out all over the place pushing this at the Capitol. Governor Deal probably has his minions right behind them.

We are getting this new stadium in Georgia, no matter how much it is not needed and how much a majority of the public does not want it. This is a power game, and it is everything that is wrong with government in this state.

Nonchalant January 29, 2013 at 12:30 pm

I wonder if you could eminent domain a team, kf you gave fair market value? I’m sure you could, given Kelo, and it would solve the extortion problem. And once you’ve decided to pony up 300 million, why not a bit more?

After all, team owners always talk about the public benefits their team brings, as part of the justification for the public stadiums they need to survive, and without which their team value would be far far less–as I believe Arthur himself is motivated by–he needs a stadium at public expese to increase his value.

Perhaps the NFL should be nationalized, or just teams by states, cities, to stop this extortion from going on further, or the continuing impovershiment of inner-urban areas to support billionaires and millionaires, as well as reduce ticket prices. One can then hire a private firm to run this public asset, much as was proposed with the Gwinnett airport deal, and as is often done with park concessions.

Stefan January 30, 2013 at 11:24 am

I assume you are kidding, but Kelo doesn’t apply to business entities – in fact eminent domain doesn’t apply at all.

Nonchalant January 29, 2013 at 12:49 pm

The current value of the Falcons is on the order of $800 million. Blank paid around $550 million or so, so he, a man worth over a billion, would get a nice profit, minus taxes. And since he is demanding state and city put in public funds on the order of at least $500 million (I’m including infrastructure costs the city would have to pay), at some point it makes more fiscal–and emotional–sense to just find an extra $300-400 million, eminent domain the thing, which is not something Blank gets a “yes/no” on, and shove it right back up his rear.

The NFL or Blank, even if they won in court, which would take actual litigation to determine, would still not come out smelling good. I don’t know if they noticed, but the public mood is currently not actually on the billionaire’s side these days. Especially since, by and large, when it comes to playing venues, all too often the NFL in fact “did not build that.” The people did.

And this is Martin Luther King’s hometown. How much do we sacrifice so some 70-year white guy can maximize his team value?

jbgotcha January 29, 2013 at 1:52 pm

The new stadium will go right on top of Vine City. If they force this through, then I wonder how many black owned construction companies will get contracts. How many vendors, etc. will be from the community displaced by the stadium? This is a terrible idea. The school system sucks. I hope they take there sorry rear ends to LA. I’d rather have schools, jobs, etc than a football team. The message to the youth: sports are more important than education.

atlanta_advocate January 29, 2013 at 2:14 pm

For the absolute millionth time, will people PLEASE stop raising this red herring.
1. This tax cannot be used for education or jobs programs.
2. Even if it could, the disbursement of the tax, $15 million a year for 20 years, would not make a difference. $15 million is the annual budget for a single high school. One high school. Really, the structure of how this money is actually going to be paid out precludes the commonly suggested alternative for these revenues – the Beltline – also, because that would require a lot more money – $1 billion and not $300 million – a lot sooner – 7 or 10 years instead of 20 – in order to be practical. But at least Charlie and all the people who propose the Beltline acknowledge that this tax isn’t general fund money and will have to be redirected to a specific purpose. The folks who keep claiming that we have other needs for the money, as if it is coming from sales, income or property tax, or if it should be handed out as supply side tax rebates are a major part of the problem.

jbgotcha January 29, 2013 at 2:18 pm

It just shows where priorities are. The legislature, the taxpayers, the mayor, and the governor have more important issues to address than an unneeded new stadium for a sports team. You don’t think the fix is in when it comes to constructions projects? I’ve seen this movie before.

griftdrift January 29, 2013 at 3:23 pm

Me too. Every time three out of the four entities you mention are asked to address those “important issues” that involve Atlanta.

Stefan January 30, 2013 at 11:27 am

I agree in part but dissent in part. If you dedicate the future revenue of the tax to the Beltline, then ideally the Beltline, Inc, would be able to sell bonds to raise immediate revenue then pay them back over time. However, GWCC makes a way better bet for a bond purchaser than the Beltline, so even that likely wouldn’t work as well. The irony here, is that the GWCC is the entity that fills the downtown hotels that pay for the tax, so, really, they are in part generating their own revenue.

Nonchalant January 29, 2013 at 2:32 pm

I was hoping for some pushback, but in the absence–some more thoughts.

First, I am not advocating anything on the cheap. Blank gets fair market value, he makes a profit on his initial investment. He just doesn’t own the team anymore, and since it has been done with just compensation, he does not get to say no. Period. I’m not advocating any trickery like “we’ve given this team two essentially free stadiums over 50 years, so we have some kind of equity.” Nope, none of that. He gets current market value (not necessarily top dollar, which I believe is the standard in these cases). He gets his profit, of a few hundred million dollars, at taxpayer expense.

Second, morally, city and state in fact have given this franchise two free stadiums over a half century, once every twenty five years, and we have no equity to show for it. It is time for this to end, and we need feel no shame in condemnation. We have contributed to the value of the Falcons, immensely, but we would be paying fair value for the team–thus we are on morally good ground, far more than Arthur’s case. And we would be stopping the threat of the next owner wanting his own Taj Mahal twenty years from now.

Legally, Kelo says we can eminent domain and give to a third party. But I think we–city and state in partnership–should keep legal control, and be completely within the spirit of eminent domain. The same front office can be kept, if they wish to stay, and the thing ran somewhat akin to how Stone Mountain is ran. Just with lower ticket prices, and perhaps no media blackouts ever.

Emotionally, it would be nice to tell a bully that he has overplayed his hand, so that future bullies take heed. One does not twist the screws on the government as if it were another business, for the government is the people. If Arthur wishes to play hardball business, then when he plays hardball business he should realize the government has some extra toys at its disposal that a business does not, and that if the case is one that has an element of righteousness to it (so that the people will support), then the government can employ those toys. The state of Georgia and City of Atlanta are not football players, nor Home Depot subcontractors, to be told take it or leave it. For an extra 400 million (on the 400-500 million needed), Mr.Blank can be made to understand how he has overplayed his hand, and we can end this issue for Atlanta for all time. As well as keep the profits of the team.

Finally, few are supporting Blank because they think the Dome itself is a piece of crap, they are doing it because they do not want to lose the Falcons. Just eminent domaining the team takes care of that for all time and removes much of the support from Blank himself (which I guesstimate is thin). Blank has put the demanded public contribution for his dream within reach of the value of his team, so why not just cut the Gordian knot and solve multiple problems? Is it the best use of money? No, absolutely not.

But neither is the $300 million in bonds plus $200+ million in infrastructure, as well as the equity lost when the Dome is torn down or rendered less valuable. And there is the rub. The current value of the Dome should be included in considering the deal–it probably narrows the gap even further between loss of Dome/bonds obligations/risk/Atlanta infrastructure upgrades and just outright buying the team.

A private business that had the power of eminent domain would perhaps instantly concur that condemnation was better than anything Blank is offering, esp. factoring in the value of the Dome, and would therefore do so. But over to the MBAs for that. Certainly Blank has enough of them working for him.

Will Durant January 29, 2013 at 3:01 pm

Upon further review they don’t have Jacksonville to use as a foil anymore but LA is just not close enough to home to generate much of a provincial rivalry as a threat to the sheeple. Better they should use Birmingham? Alabama’s state sponsored NFL farm team is somewhat better than the one from Georgia.

UpHere January 29, 2013 at 7:31 pm

If you look at the term sheet, the state of Georgia will be getting less money in return for this new stadium. That is one thing no one is discussing. The percentage of funds that will flow back to the state will be decreased greatly. The agreement that was signed to build the Dome was much more generous to the state than to the Falcons. The opposite is true now.

bgsmallz January 30, 2013 at 2:43 pm

Hmm…the agreement to build the Dome included 70% public financing and 30% private financing while the new stadium includes 70% private financing and 30% public financing…>>>I’m sure that has nothing to do with the terms of the revenue from operations being more generous to the Falcons.<<—Sarcasm font needed.

IndyInjun January 30, 2013 at 4:09 pm

Where is that 70/30 split in the term sheet?

The term sheet says that the bond proceeds are to be maxed out based upon the” GWCC Contribution”, which is the HM tax allocation for stadium/dome (39.3% of total, excluding the 1% rate increase) and the seats rights for all events. The 2011 Barrett analysis put the amount of debt that can be attained at 1.25 coverage ratio, 2% revenue growth, and 5% interest rate at $464 million. The revenue growth and interest rate variables are a LOT more positive than that, with the coverage ratio probably being higher.

bgsmallz January 30, 2013 at 5:06 pm

So are you sourcing the term sheet, the statute, the Barrett analysis or are you hodgepodging them all together with your own assumptions in order to create your own hypothetical outlook? (I might add that you are also sourcing them incorrectly).

Look at page 12 of the Barrett analysis.

$1.032 B in funds
$700.4M in private sources
$331M in public sources.

That’s what I’m calling a 70/30 split. (Or a 68/32 split)

Now…separately…here’s what’s in the Term Sheet. (QUOTE:)

“GWCCA will endeavor, subject to market conditions and required governmental
and other approvals not controlled by GWCCA, to contribute toward NSP Costs
(described below) (i) the net proceeds of a revenue bond offering secured by
H/MT proceeds (“H/MT Revenue Bonds”) (with the parties endeavoring to
maximize the net amount available under applicable law after repayment of
existing Georgia Dome bonds and net of required reserves and costs of issuance)
and (ii) all net proceeds from the sale of seats rights at the NSP (collectively, the
“GWCCA Contribution”). StadCo/Falcons are responsible for funding the
remainder of NSP Costs, including cost overruns.”

So, let’s break that down….
1) Cost overruns? Falcons.
2) Sale of seat rights.
3) Bonds that are the “net amount available under applicable law.” What is the maximum amount allowed to be borrowed by the GWCC by law? Currently, by statute, the borrowing capacity is $200M. The proposed statute would raise that amount to $300M.

You and Mpierce are done in my book. Too much of an attempt to mislead and obstruct rather than argue conclusions based upon the facts.

IndyInjun January 30, 2013 at 5:26 pm

Quit, if you like, but please provide a link to the “proposed statute.” I did a search on House Bills and could not find it.

Then there is the matter of misdirection. IF the bonds are $300 million, as you say, the cash flow will be enough to fund 50% more in bonds. If not used for more bonds the cash flow is to spill over into $12 million a year capital and expense pots to fund maintenance and ongoing capital projects – things the TERM sheet starts out saying the Falcons pay for.

Dave Bearse January 29, 2013 at 9:44 pm

My partner’s response when I told him the Falcons were threatening to LA unless the city ponied up three or four hundred million for a stadium?

Bye.

Mike, a recent local example support the experts that think the economic benefits of stadium are overrated: Coolray Stadium. Similarly the Coolray Stadium example likewise isn’t a very promising indicator of the prospect of moving the stadium to the boondocks.

Perhaps Bob Loblaw or other legal eagles that comment on PP can enlighten us, but NFL to the casual observer appear to be a monopoly, and as such perhaps may be subject to regulation.

Stefan January 29, 2013 at 11:44 pm

You mean antitrust regulation?

mpierce January 30, 2013 at 12:37 am

NFL has an antitrust exemption under the Sports Broadcasting Act of 1961. Basically they are a government sanctioned monopoly.

bgsmallz January 30, 2013 at 9:55 am

@mpierce

As is seemingly common place, you come to a completely false conclusion based on a flawed interpretation of a partial truth . The only reason the NFL needs an exemption is because the league is subject to antitrust laws. The Sports Broadcasting Act of 1961 is a specific piece of legislation providing a specific exemption…namely that the league can negotiate TV rights as a single entity…which was in response to a Supreme Court decision that says absent of statute, such negotiations would violate the Sherman Act.

If you have any doubt about what I’m saying, feel free to listen to the SCOTUS which ruled on this very issue in the American Needle vs. NFL case in 2010. In a unanimous 9-0 decision, the court ruled that the NFL’s licensing agreement violated anti-trust laws because it is not a single entity…it is 32 separate business entities.
http://blogs.wsj.com/law/2010/05/24/american-needle-high-court-delivers-9-0-shutout-against-nfl/

And just as a follow up to Dave Bearse above, this situation is exactly the opposite of anti-competitive behavior. There is a market for having an NFL franchise in your city. Atlanta and the GWCC is competing against those other cities.

Economic benefits, return on investment, etc. are all fair and relevant questions/criticisms. However, you can’t confuse that with the marketplace for a NFL team.

So, for example, when you want to purchase a car and the list price from the manufacturer is $50,000…you have to go through your processes and ask questions like ‘is that too much compared to other cars’, ‘how long can I drive my old car,’ ‘am I going to save money on repair costs’, ‘what about fuel bills on the new car?..Reg Unleaded?’ ‘what else can I spend that money on’ etc. etc. Those are all fair and right questions…

However, what isn’t really up for debate is the market price of the car. We can look and see what others have paid for the same vehicle. In fact, the dealer in Atlanta is charging $15,000 for it despite other dealers in other cities getting a significantly higher price (see Indy, Dallas, Houston, NoLA, Chicago, etc. etc.) In terms of the marketplace, we are getting a bargain. That’s a fact. Does that mean it is a no-brainer? No…but it shouldn’t be ignored in the analysis either.

And that’s part of the real disconnect here…folks citing facts and figures and Zimbalist reports without actually reading or understanding what’s in those.

For example, most of Zimbalist’s arguments on a stadium being revenue neutral to a local area are based upon the presupposition that the local taxpayer is funding at least 2/3 of the construction. So when Baker, the AJC, and Boortz quote him without actually reading his work or at the very least without understanding it so that they can accurately apply it to the current framework…it makes great radio, but bad economic analysis.

http://www.freakonomics.com/2009/01/09/questions-for-sports-economist-andrew-zimbalist/

In our Atlanta example, the state/city is funding less than 1/3 of the construction. But I assume most folks are going to believe what they want to believe…it just makes better radio.

Dave Bearse January 31, 2013 at 1:38 am

Supposedly independent NFL “suppliers” colluding to control supply and thereby establish articfically high prices and profits is textbook anti-competive behavior.

macchiefs January 29, 2013 at 11:30 pm

As I understand it, the hotel/motel tax does NOT have to be used solely on the Dome. It does have to be used to promote tourism, etc. To call the Dome old and outdated is ridiculous. I have attended Falcons games in every stadium in use in the NFL and overall, I will still put it in the top ten.
As for Rankin Smith, he did threaten to move the team if he didn’t get a new stadium. There are, however, 2 big differences. First, Fulton County Stadium was a dump, particularly for football. The worst seats in the house were on the 50 yard line. Secondly, when you paid for parking or bought food at the old stadium during a Falcons game, the Braves got paid.
As for Arthur Blank’s image in the area, it is no doubt greatly enhanced by the fact that he is on the board of directors of Cox Enterprises (AJC, 750 radio, Channel 2, etc).

The Last Democrat in Georgia January 30, 2013 at 12:30 am

“First, Fulton County Stadium was a dump, particularly for football.”

The old Fulton County Stadium was one of many NFL/major-league baseball stadiums built in a cookie-cutter like style (“Brutalist” utilitarian style of architecture) during the 1960’s and 1970’s.

Other multi-purpose NFL/MLB pro-sports stadiums built in the same cookie-cutter “Brutalist” utilitarian style of that era as the old Atlanta-Fulton County Stadium included stadiums in Oakland, San Diego, Cinncinati, Pittsburgh, Philadelphia, Washington D.C., New York and St. Louis and even domed stadiums in Houston and Seattle.

Harry January 30, 2013 at 11:45 am

I saw the Falcons suffer some brutal losses there.

The Last Democrat in Georgia January 30, 2013 at 5:32 pm

So the style of architecture of the stadium the Falcons played in for the first 26 years or so of their existence was totally appropriate.

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