After many reformulations in the past two years, and four amendments in the final hours before an Atlanta City Council vote last week, a deal to build a new downtown stadium for the Atlanta Falcons is on the cusp of completion.
Approved by the City Council and the Georgia World Congress Center Authority, the deal needs one more key approval. The board of Invest Atlanta — the city’s development authority, which would issue the bonds to fund the public portion of the construction cost — was scheduled to vote last week but delayed action in light of the late amendments. It is not clear when a vote will come.
Today, the Atlanta Journal-Constitution sorts through 150 pages of agreements and breaks down the deal, from its big-ticket items to interesting minutiae.
What would be built: A retractable-roof stadium with seating for 66,000 to 72,000, expandable to 80,000 for special events.
When would it open: 2017, if all goes according to plan.
Where would it be built: Immediately south of the Georgia Dome if the property can be acquired and feasibility studies are satisfactory. (If that site is not confirmed by Aug. 1, plans would shift to an alternate location 1/2 mile to the north.)
How much would it cost to build: Ballpark estimates have ranged from $948 million to $1.03 billion, but the stadium hasn't been designed yet.
Who would own it: The Georgia World Congress Center Authority, the same state agency that owns and operates the Georgia Dome.
Who would operate it: The Falcons, who would pay the GWCCA annual rent of $2.5 million with 2 percent increases per year.
How much public money eventually goes into the stadium depends on how much revenue Atlanta hotel rooms generate through 2050. That’s because 39.3 percent of the city’s 7 cents-per-dollar hotel-motel tax is committed by law to the stadium — the same percentage that has gone into the Georgia Dome for the past 21 years. The tax money would be used first to make the annual principal and interest payments on the bonds that would fund $200 million of the construction cost. And whatever is left after that — potentially hundreds of millions of dollars over 30 years, according to some projections — would go to offset the Falcons’ expenses of operating and maintaining the stadium. In another use of public money, the GWCCA is responsible for acquiring the land on which the stadium would be built.
Other than the $200 million from the bonds, the rest of the construction cost – about $800 million – would come from private sources: the Falcons, the NFL and personal seat license sales. The Falcons have said their portion would be at least $500 million. In addition, the team has committed up to $70 million for related roadwork and up to $20 million for off-site property acquisition, potentially including Friendship Baptist Church. The church is across Martin Luther King Jr. Drive from the preferred site but would need to be relocated to re-route the road. Falcons owner Arthur Blank’s family foundation also has pledged $15 million for community development in the area near the stadium.
The Georgia Dome, which opened in 1992, would be demolished after the new stadium is built, and the site would be converted to surface parking. The cost of demolition, estimated at $9 million, would be paid out of the stadium construction budget.
Fifteen “Georgia Dome legacy events” would be assured relocation to the new stadium under similar arrangements as they have in the current facility. These events include the Chick-fil-A Bowl and Kickoff games, SEC Championship football game, Bank of America Football Classic, Georgia State and high school football games, college basketball postseason tournaments and Monster Jam. The GWCCA would continue to manage the legacy events, including negotiating contracts with them. Provisions also are made in the agreements for the stadium to host GWCCA events, such as conventions, and city of Atlanta bid events, such as the Final Four.
The Falcons would be responsible for all costs of operating and maintaining the stadium, although they would recoup some of that from excess hotel-motel tax revenue after debt payments. Deal documents describe a “waterfall” of such revenue into different buckets — first for refurbishment and maintenance expenses, next for capital improvements, then for expenses of legacy and other special events, then for other operating expenses.
The Falcons would keep all stadium revenue, including that from non-Falcons events. The team’s revenue streams would include food and beverage, advertising, suites and new parking developed as part of the stadium project. The Falcons would have the right to select — and sell — the stadium’s name.
DESIGNING AND BUILDING
The Falcons would serve as the stadium’s developer with responsibility for design and construction. . The GWCCA would have some approval rights, and Invest Atlanta would have a right to “review and comment.” The Falcons and the GWCCA would jointly select the lead architect.
Send the bill to the Falcons.
EQUAL BUSINESS OPPORTUNITY
The Falcons agreed to a minimum goal of 31 percent participation by minority and female business enterprises in design and construction.
The GWCCA would not be allowed to alter the parcel of land known as Georgia International Plaza, which includes Falcons Landing and is used for pre- and post-game activities. The area, between the Georgia Dome and Philips Arena, would have to be kept in its current form “to preserve the fan participatory experience” and “to maintain the views of downtown Atlanta (from the new stadium),” according to the deal documents.
The agreements provide for premium seats to stadium events for the GWCCA “for civic and marketing purposes” and to Invest Atlanta for “economic development” purposes. Some City Council members have questioned whether it would be legal for Invest Atlanta to accept the tickets because the council in 1997 banned city officials from receiving free sports and entertainment tickets as political perks. The city attorney told the council she will seek an opinion from the ethics department.
As expected, the deal provides that personal seat licenses — one-time fees for the right to buy season tickets in a specific seat — would be sold to help fund construction. The Falcons would have the right to set the prices and other terms. The team has not revealed any specifics of its plan. Such licenses would be a first for an Atlanta pro sports franchise but have been used at many other NFL venues.
The Falcons stadium lease would run 30 years. Penalties for failing to stay in the facility would include repayment of the construction bonds and other substantial damages. The lease also would have three five-year renewal options.
Atlanta doesn’t have a Major League Soccer franchise, but the agreement makes provisions for one by ensuring it would have access to needed dates on the stadium’s “booking calendar.” The Falcons have expressed interest for years in bringing an MLS team to the city.
Among the City Council’s late amendments were stipulations that Invest Atlanta will facilitate a “community benefits” plan to boost surrounding neighborhoods before issuing bonds and that no city general-fund dollars will go into the stadium or related infrastructure.
The deal is conditional on the 32 NFL owners passing a resolution authorizing financing from the league’s “G4” stadium loan/grant program. The Falcons are expected to seek the maximum $200 million from the program. The earliest the deal would go before the league for approval would be the May owners’ meeting, Falcons president Rich McKay said.
Although the current agreements are believed to cover all major deal points, they would be expanded into much more detailed contracts long before bonds are issued in, perhaps, mid-2014. The deal documents have a vernacular of their own. Two terms that appear commonly are “NSP” and “StadCo.” NSP refers to the stadium (New Stadium Project). StadCo refers to the Falcons — more specifically, Atlanta Falcons Stadium Company, a subsidiary formed to develop and operate the NSP. Now you know.
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