The Georgia Supreme Court will issue an opinion on Monday in a case that could upend Atlanta’s plans to help finance the new $1.4 billion Falcons stadium, according to a court notice.
The decision comes more than a year after a group of residents from English Avenue and Vine City first challenged the use of public money for the project. At issue is Atlanta’s decision to commit $200 million in bonds backed by public money to help build the stadium, set to open in 2017.
The Supreme Court will decide whether to uphold a Fulton County Superior Court judge’s decision last May to validate the bonds backed by hotel-motel taxes, which allows the borrowing plan to go forward, or side with the residents. The legal challenge has long delayed Atlanta’s plans to issue the bonds, something city leaders hoped to do last summer.
The decision could have massive financial ramifications for the Falcons, as the sports team has carried the costs of the project while the dispute winds through court. Construction of the retractable roof stadium is well underway in downtown Atlanta, already reshaping this part of town.
The justices have mulled the decision since last November, when attorneys for both sides argued their cases. The Falcons are not a party to the bond validation case.
The residents of English Avenue and Vine City —- the Rev. William Cottrell, Mamie Lee Moore, Tracy Bates, Joe Beasley and John H. Lewis III —- say they’re not against the new stadium, but oppose the manner in which public dollars are funding the project for billionaire Arthur Blank’s football team.
Attorneys for the city said the Atlanta City Council acted within the law when it voted in March 2013 to extend the city’s hotel-motel tax and apply those funds toward the new stadium. They’ve also said the stadium will promote tourism and bring jobs to Atlanta, and therefore isn’t a project solely benefiting a private entity.
Should the justices greenlight the bonds on Monday, $200 million in hotel-motel taxes will be applied to construction, with potentially hundreds of millions more over the next three decades also funding the project.
Key issues in the residents’ legal challenge include:
*That the bonds are unconstitutional because the 2010 state law authorizing extension of the existing Atlanta hotel-motel tax for the purpose of replacing the Georgia Dome amended a general law, which can be applied across the state, to a “special law” affecting only one project. Attorney John Woodham, who represents the residents, explains that a special law cannot amend a general law. Atlanta attorneys counter that the decision to extend the hotel-motel taxes is allowed under exceptions to the general law.
*That the Atlanta City Council acted improperly when it voted last year to approve the use of future hotel-motel taxes for stadium construction because the Georgia World Congress Center Authority hadn’t yet issued needed certification. The certification was issued in February. Woodham said that makes the city council’s legislation null and void and requires them to re-adopt it. Attorneys for Atlanta agree the state must issue certification, but argued state law doesn’t require them to do so before the council can vote on the financing plan. They say the certification must only be issued prior to the bond issuance.
*That Invest Atlanta, the city’s economic development agency tasked with issuing the bonds, cannot issue revenue bonds because the money to pay the debt service on the bonds isn’t derived from the stadium itself, but from hotel-motel taxes. Woodham says in order for that to be proper, Invest Atlanta must own or operate the stadium. The Falcons stadium will be owned by the GWCC. Attorneys for the city argue that state law does not require Invest Atlanta to own or operate the stadium in order to issue revenue bonds.
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