The Atlanta Falcons plan to take out construction loans totaling $850 million to help fund the team’s portion of the cost of building the new retractable-roof stadium downtown, a team official told a state agency Tuesday.
Greg Beadles, the Falcons executive vice president and chief financial officer, told the Georgia World Congress Center Authority board that the team expects to secure the loans from a syndicate of up to eight banks within the next couple of weeks.
Stadium agreements have been in place among the Falcons, the state and the city of Atlanta for two years, but Tuesday’s meeting marked the first time the Falcons have said publicly how much they will borrow to fund their portion of the cost.
The Falcons reported on the status of their financing as the city’s economic development agency, Invest Atlanta, prepares to issue bonds in May to cover the city’s $200 million commitment toward stadium construction and to cover additional issuance costs. The bonds, and the interest on them, will be repaid from Atlanta hotel-motel tax revenue over the next 30 years.
The final hurdle to issuing the bonds was cleared last month when the Georgia Supreme Court upheld the city’s financing plan, following challenges by citizens.
“This has been a long, long road, but we’re comfortable where we sit in the road,” said Jim Beard, the city’s chief financial officer.
The Falcons’ loans will be for up to five years, by which point longer-term financing would be secured. The Falcons would be able to reduce the loan amount at that point with revenue generated from sales of sponsorships, suites and seats.
The eight banks met with Falcons officials on April 16, according to Elliott McCabe, managing director of the Sports Finance & Advisory Group at Bank of America, the Falcons’ stadium financial advisor. The lenders’ response has been positive, McCabe said.
“I can report the expressions of interest are very strong,” McCabe told the GWCCA board. “In fact, we have received verbal and written commitments in excess of the amount we need. So we are in very good shape.”
After hearing from the Falcons and the city, the GWCCA board voted to authorize a “final closing” next month on the agency’s voluminous stadium agreements with the Falcons. The GWCCA will own the stadium.
“This is the last step of the journey we’ve been on, starting a little over two and a half, three years ago,” GWCCA executive director Frank Poe said.
The stadium — under construction next to the Georgia Dome — has a construction budget of $1.4 billion, not including interest costs. The NFL will contribute $200 million.
Another source of revenue for construction is sales of personal seat licenses, or PSLs, which are one-time fees for the right to buy season tickets. The Falcons have repeatedly declined to say how much they expect the PSLs to generate and again resisted that question when posed by GWCCA board member Doug Tollett.
Beadles replied that the team won’t have a projected total until more prices are set this summer. The Falcons have been selling PSLs for the stadium’s 7,700 club seats since January, at prices ranging from $10,000 to $45,000, and plan to seek GWCCA approval of prices for the other 60,000-plus seats by early June.
About the Author
