DEL.ICIO.USEconomy threatens sponsor for Gwinnett stadium
The Atlanta Journal-Constitution
Friday, November 21, 2008
The take-no-prisoners economy is threatening to take down yet another target: the naming rights deal for Gwinnett County’s new baseball stadium.
“The expectation of doing a naming rights deal right now is not as good as it was eight or 10 months ago,” project manager Preston Williams said Friday.
HKS
A photo-rendering of the entrance to the stadium, by HKS, the architect of the stadium.
Williams, who is the general manager of the Gwinnett Convention and Visitors Bureau, said uncertainty over the economy has made it virtually impossible that a deal will be signed before the stadium opens in April to house the top minor-league affiliate of the Atlanta Braves.
It may also be hard to make a deal by August — when a contract provision with the Braves kicks in that could permanently reduce the amount of revenue available to the county.
It’s common for corporations to pay the owners of sports and entertainment venues for the rights to attach their names to the facilities. Many such deals are worth tens of millions of dollars.
While Williams believes a deal will get done eventually, the lack of an early deal could pose at least a short-term headache for county officials. The county built the sale of naming rights into its financing package for the stadium, counting on the deal to provide $500,000 a year to help repay money borrowed to build the ballpark.
The county projected selling naming rights for $800,000, but a portion of the proceeds would go to the Braves. If the county can’t make a deal by September, the Braves get to sell the rights and keep more of the money.
If naming rights don’t bring in enough to cover the debt, the county might have to cover the cost even as it is cutting staff and expenses amid an effort to trim $35 million from its annual budget, said County Administrator Jock Connell.
“The bottom line is we’ve got a bond payment coming due and we’re operating on the assumption right now that those revenues are going to come through.” he said.
If not?
“We would have to look at what other revenues are out there,” he said. “I don’t want to lead you to believe there are lot of them.”
The likely contender is property tax revenue from the county’s general fund, although there’s been some discussion about a longshot option — using proceeds from the county’s Special Purpose Local Option Sales Tax. Connell indicated that’s unlikely.
The county will get guaranteed minimum revenue from the Braves for rent, ticket sales and parking revenues, and Connell said it is possible those figures could be higher and could help offset some or all of the shortfall caused by the lack of a naming-rights deal.
Another thing that could help is the county’s new car rental tax, which the County Commission approved in January specifically to help repay the debt. It was on track to exceed the intial $600,000 expectation as recently as a few months ago, Connell said. He said he had not seen figures recently.
Taxpayers have already contributed $31 million to the $64 million project, including $5 million to buy the land and $26 million for construction.
The news that county officials are having trouble finding a naming rights deal wasn’t a surprise to J.C. Bradbury, a Kennesaw State University sports economist who has been critical of the county’s handling of the stadium deal.
He said naming rights deals are one of the first things corporations pull back on in a bad economy. That no one knows how well the team will be received is also a hindrance, he said.
“I wouldn’t be surprised if it took a few years,” he said.
Williams said he does not know what the stadium would be called without a paid deal in place.
“In the absence of anything else, probably ‘Gwinnett Braves Stadium,’ ” he said.
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