An agreement to commit millions in taxpayer dollars to support a Forsyth County arena trying to woo an NHL franchise back to Georgia was greenlit Tuesday — albeit after undergoing a significant overhaul and some last-minute changes.
Forsyth commissioners voted 4-1 to approve a memorandum of understanding for $225 million in bond financing for the proposed 18,500-seat arena at The Gathering at South Forsyth, a $2 billion mixed-use project. That’s considerably smaller than the $390 million package disclosed to the public in January when commissioners approved an earlier non-binding deal.
But the decrease in public incentives is offset with cheaper rent payments for the developer and the county receiving less money per ticket sold at the arena.
To obtain the taxpayer support, developer Vernon Krause must still land an NHL expansion franchise, despite league leaders saying they aren’t looking to expand at this time.
The $2 billion Gathering project is of an unprecedented scale for Forsyth, one of the metro area’s fastest-growing counties, and it has prompted some heartburn over its number of apartments, potential public subsidies and promise of bringing big-city events to the wealthy and conservative suburban enclave. Commissioner Todd Levent, the sole dissenting vote, warned his colleagues against letting their guard down for the pursuit of pro sports.
“If we’re putting a glistening carrot out there to attract all of this over hockey, great,” Levent said during three hours of debate Tuesday. “But let’s make sure that we’re protected and not looking at a (hooked) worm that we bite real quick and they snatch us up.”
On Wednesday, Krause said he was “shocked and extremely disappointed” by some of the changes, which followed months of negotiations. He said in a news release that his team will evaluate whether to proceed after the commissioners tweaked some of the multi-phased project’s timeline and asked for more ticket revenue.
“The goal continues to be to strike a deal that is beneficial to the county, its residents — of which I am one — and Krause Sports and Entertainment, and present a solid plan to the NHL for consideration as they ponder possible expansion,” Krause said. “However, the county cannot keep moving the goal line if that is to happen.”
The new terms reflect in part an inability by the county to obtain state law changes that would allow Forsyth to create an arena authority to manage the facility, instead having to rely on the county’s existing development authority to issue the bonds. However, the plan still involves the creation of a Tax Allocation District or TAD, which, if approved by voters, would allow the developers to tap into newly created property taxes generated by the development to help fund the project.
The agreement allows the development team to move forward to the zoning and permitting to begin construction on the first phase, which is slated to include 600 apartments, a hotel and at least 500,000 square feet of office and retail space. Krause’s team has also agreed to build a fire station and sheriff’s precinct, a connector to the county’s trail network and agreed to set aside 5% of apartments to be built at rents affordable to first responders and teachers.
Fighting for the puck
The development team, led by Krause, who owns a network of car dealerships, refined some details of the proposed 84-acre project along Union Hill Road near Ga. 400.
Consisting of four phases, the entire project is proposed to include the $700 million arena, 1.6 million square feet of office space, hotels with a total of 500 rooms and about 2,000 residences, mostly apartments.
Krause’s group is one of two in metro Atlanta that have proposed arena and entertainment district plans anchored by an expansion NHL franchise. In Alpharetta, a group led by former NHL player Anson Carter has proposed a similar project at North Point Mall.
The NHL is not currently in expansion mode. If either development team lands an NHL franchise — and it’s a big if — it would be the third time the league has attempted to make top-level hockey work in metro Atlanta following the departures of the Flames and Thrashers. Other competitors like Houston and Salt Lake City haven’t had their first crack at the NHL.
The Gathering’s arena is scheduled as part of the second development phase. If built, the arena will be transferred to the county, where it won’t generate property taxes. The Gathering team agreed to pay $100,000 annually in rent — down 95% from January’s proposal of $2 million per year. The county will also receive $1.50 per ticket sold at the arena.
The county economic development arm, Forward Forsyth, was not included in the memorandum of understanding, even though its board will have to agree to issue the bonds.
Credit: Atlanta Regional Commission
Credit: Atlanta Regional Commission
Alex Warner, vice president of economic development with Forward Forsyth, said it will likely be structured where the county pays off the debt over 20 years, requiring $18 million in annual payments to cover the debt issuance fees. The county expects to pay off the debt through increased hotel-motel tax collections, ticket sales and the creation of a TAD.
In theory, as the area develops, increases in property taxes within the TAD are diverted to repay bonds. After the bonds are repaid, the city, county and schools receive the benefit of the new higher property values.
Warner warned the Gathering team will likely ask for more public investment as the arena gets older, similar to Atlanta pitching in more than $142 million to refresh what’s now known as State Farm Arena.
“A lot of our tax revenue benefits come down the line,” Warner said. “It feels like by the time it starts to get good, there’s going to be another ask.”
‘Not going to get mugged’
Several Forsyth residents sporting hockey jerseys showed up in support of the project during the three-hour meeting.
“My whole life, we went somewhere else to have fun, and we left our money with them,” said Forsyth native Derek Brooks. “So, I think it’s awesome to have an opportunity for people somewhere else to come to Forsyth County to have fun and leave their money that will improve our community long-term.”
Others decried having to take trips to Atlanta, saying it is urbanites’ turn to wait in traffic along Ga. 400 to attend events.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Commissioner Cindy Jones Mills tried to leverage fears of Atlanta crime when attempting to get the Gathering team to commit to giving the county $2.50 per event ticket at the arena, which the developers said would put them at a competitive disadvantage.
“I don’t see how this dollar more per ticket is going to put us out of competition,” Mills said. “You’re not having to go to downtown Atlanta. That means you’re not getting your purse stolen. You’re not going to get mugged.”
Only a few residents spoke against the project, fearing the number of renters who would join the predominantly homeowning county and the potential financial risk to taxpayers if pro hockey does come to town.
“We’re putting $225 million on the line,” said resident Brian Hughes. “That’s a lot of money.”
