Falcons stadium: a battle between north and south

April 13-14, 2010: The Georgia Legislature authorizes extending Atlanta's hotel-motel tax through 2050 to partially fund a new or renovated stadium on Georgia World Congress Center property.

Feb. 22, 2011: The GWCC Authority agrees to enter negotiations with the Falcons on a $700 million open-air stadium that, according to the plan at this point, would be home to the NFL team and other outdoor events while the Georgia Dome would remain in operation for indoor events.

April 25, 2012: After more than a year of negotiations, the GWCCA and the Falcons abandon the idea of an open-air stadium, shifting the plan to a retractable-roof stadium that would cost about $1 billion, host indoor and outdoor events and result in demolishing the Georgia Dome.

Summer 2012: The focus shifts from building the stadium on a site a half-mile north of the Dome, which had been the Falcons' preference, to a site immediately south of the Dome, preferred by the GWCCA and the city.

Dec. 10, 2012: The GWCCA board approves a "term sheet" that outlines a non-binding stadium deal with the Falcons, contingent on the Georgia Legislature authorizing the state to issue bonds backed by Atlanta's hotel-motel tax to fund the public portion of the construction cost.

January 2013: The December "term sheet" deal unravels when it becomes clear the Legislature will not authorize the state-issued bonds. The city of Atlanta begins negotiating a deal under which it, rather than the state, would issue the bonds.

March 15: The GWCCA board approves a reworked deal, which calls for $200 million of the construction cost to be paid from proceeds of city-issued bonds backed by the hotel-motel tax, and the rest to be paid by the Falcons, personal seat license sales and the NFL. In all, the deal calls for 39.3 percent of Atlanta's 7-cents-per-dollar hotel-motel tax to go toward costs of financing, operating and maintaining the stadium through 2050 — likely hundreds of millions of dollars more than the initial $200 million, according to projections.

March 18: The Atlanta City Council votes 11-4 to approve the deal.

April: Negotiations begin with two churches, Friendship Baptist and Mount Vernon Baptist, that would have to be purchased and razed for the stadium to be built on the "preferred" site just south of the Dome.

April 30: Kansas City-based 360 Architecture is hired to design the stadium.

May 21: NFL owners agree to provide the Falcons with $200 million in league funding.

June 11: The Falcons choose a team of general contractors led by Atlanta-based Holder Construction. The joint venture also includes Arizona-based Hunt Construction and Atlanta-based H.J. Russell & Company and C.D. Moody Construction.

June 18: The GWCCA board approves 360 Architecture's conceptual design, which features a futuristic roof that will open in eight pieces and a soaring wall of glass that will showcase the downtown skyline.

July 30: The Falcons declare the preferred south-of-the-Dome site "not feasible at this time" because the needed property hasn't been acquired, and the team begins a study of the "alternate" site one-half mile north of the Dome.

August 1: The GWCCA terminates negotiations to purchase Mount Vernon Baptist after the church rejects a $6.2 million offer and seeks $20.375 million.

August 6: Atlanta Mayor Kasim Reed announces a tentative $19.5 million deal for the Falcons to purchase Friendship Baptist and calls on the GWCCA to "try harder" to reach a deal with Mount Vernon Baptist.

— Tim Tucker

WHAT’S AHEAD

Oct. 1: This is the deadline for the Falcons to complete their feasibility study of the "north site." If the Falcons and the GWCCA have not agreed that one site or the other is feasible by this date, then either party has the right to terminate the stadium agreement signed in April. This also is the date by which the Falcons, GWCCA and City of Atlanta are scheduled to sign more definitive transaction documents, which require an agreement on site.

Oct. 31: Deadline for completion of preliminary schematic drawings.

Mid-2014: Construction is scheduled to begin.

March 2017: Construction is scheduled to be completed.

Atlanta Mayor Kasim Reed wants the future Falcons stadium to be built on land just south of the Georgia Dome. Doing so, he hopes, would provide a linchpin for development along a corridor in desperate need of new investment.

But right now, there are 9.3 million reasons that might not happen.

The site is home to Mount Vernon Baptist Church, one of two churches that would have to be bought and torn down to make way for the sports behemoth. The state offered Mount Vernon the appraised value of $6.2 million for its property in late July, which the church quickly rejected. Instead, it asked for $20.4 million. That figure dropped last week, according to Reed, who announced Friday that the church had lowered its asking price to $15.5 million.

State officials say the law prohibits them from offering more than the property’s appraised value. Any additional money would have to come from another source. So where might the money come from? Reed’s grand vision of a stadium connected to public transportation and new development teeters on finding an answer.

It’s a predicament that has Atlanta’s business elite talking about how the mayor can move the ball forward, whether through negotiations, political pressure, raising private funds or creative accounting.

“There are lots of ways he can go about this,” said A.D. Frazier, an Atlanta businessman known as the mastermind behind the 1996 Olympic stadium project.

Though Atlanta cannot chip in money directly from its general fund, per legislation passed by the Atlanta City Council in March, officials could explore options such as passing another tweak of the hotel-motel tax, Frazier said.

“I think they can find (money) in the budget or a special tax increase for use of hotel-motel taxes, allocating a part of it for paying off the building,” suggested Frazier, noting he is not involved in the financing deal. “I would look at that as the most simple straight-forward way to go about it.”

How feasible this or any financing strategy might be is unknown. And nothing about closing the gap seems simple or straight forward so far.

The Falcons, the obvious potential source of private funds that could secure the Mount Vernon property, have not said whether they are willing to contribute additional money. Falcons officials declined an interview request for this story.

Long-time Atlanta sports and marketing executive Bob Hope said if the Falcons put up more money to acquire the south site, the team might be able to make it back in sponsorship sales: “I think they would do much better on sponsorship sales on the south site than the north site because it would be part of an overall complex, with more synergy and energy,” he said.

Some observers said leaders could get inventive with funds available for infrastructure in the city’s public works department, utilize leftover dollars from quality of life bonds or tap into the Westside tax allocation district, or TAD, funds. But a person in the mayor’s office said those options are highly unlikely, especially in an election year.

If a resolution isn’t reached, the $1 billion stadium likely will be built on land a half mile north of Reed’s preferred spot, an area by Northside and Ivan Allen Jr. Boulevard. The Falcons have started a feasibility study on that site.

All along, Reed has touted his belief that the project — if built on the south site — poses the most economic promise for the poverty-stricken neighborhoods of Vine City and English Avenue. With its proximity to two MARTA stops and a future potential multi-modal passenger station in the Gulch, a south-site stadium could be the catalyst for change.

The stakes are high for the mayor, who has long supported plans for the retractable roof stadium within city limits. After a plan for the state to issue bonds fell through, he championed legislation in March authorizing the city to issue $200 million in bonds backed by hotel-motel taxes to partially finance stadium construction.

“I took significant political risk to support this stadium. I have been unwavering in my support for this stadium,” Reed said at an Aug. 6 press conference. “I didn’t do it so that whatever happens, just happens. I have a vision for this city and what it should look and feel like.”

Arguably, stadium supporters say, Reed has done his part. After passing the legislation to help build the stadium downtown, he negotiated a $19.5 million deal for the Falcons to buy Friendship Baptist Church. That deal still must be ratified by the congregation, but no problems are anticipated.

In recent weeks, he and former mayor and Atlanta Falcons board member Andrew Young stepped into talks with Mount Vernon, resulting in the church lowering its asking price.

“Fourteen million was really hard. (Nine) million, I think, is really achievable,” Reed said last week, declining to discuss specific strategies.

The challenges in acquiring Mount Vernon are clear. State officials — who through the Georgia World Congress Center Authority were tasked with acquiring Mount Vernon — can’t offer more than they already have. The Atlanta City Council’s legislation authorizing use of hotel-motel taxes stipulated no general fund dollars can be used toward property acquisition. And even with creative accounting measures, Atlanta officials are loathe to contribute more city dollars in an election year.

“We need creative thinking. … We need a creative solution,” said Mike Koblentz, chairman of the Northwest Community Alliance, a coalition of neighborhood groups that opposes the north site.

He believes Reed will find a way to bring the stadium back to the south parcel.

“I think the mayor has a huge bully pulpit,” Koblentz said. “He obviously has widespread political support, and he has strength within the neighborhoods and the business community. So he is uniquely positioned to reach out to whoever.

“… The mayor wants to get it done and I think will do what it takes to get it done,” he said.

To that end, Reed has publicly urged GWCCA officials to revive negotiations with Mount Vernon.

In the Aug. 6 press conference, a fiery Reed said the parties must "try harder" to close the deal, a plea he repeated last week.

Reed has also noted the remaining leverage he may have to bring the south site to fruition: he and the city council must approve how to spend $30 million in a community benefits plan before construction bonds can be issued and the project gets underway. The Arthur M. Blank Family Foundation is contributing $15 million to that pot for communities impacted by the stadium, which has a target opening date of 2017. The other $15 million comes from the Westside TAD.

Yet, late last week, the GWCCA said it remained “focused on completing the due diligence work on the north site as outlined in the executed memorandum of understanding between the Falcons, City of Atlanta and the Authority.” That agreement allowed the Falcons to shift the focus to the north site by declaring the south location unfeasible, which the team did because the needed property hadn’t been acquired by an Aug. 1 deadline. The north-site study must be completed by Oct. 1.

Neil deMause, a close observer of stadium negotiations nationwide and co-author of the book “Field of Schemes,” said the process for acquiring the property for the Atlanta stadium is unlike any he has seen elsewhere. He was referring to the arrangement that made the GWCCA responsible for acquiring Mount Vernon’s property, and the Falcons — a private business without legal restrictions on how much it could spend — responsible for purchasing Friendship’s.

“As far as I know, this is totally new ground,” deMause said. “Usually, you have one entity – one agency – that is in charge of the project. … It feels like it’s a big game of chicken at this point to see who’s going to give in. It’s really bizarre.”

DeMause said he’s rarely surprised by the various ways stadium deals are worked out, but the posturing in Atlanta has his attention.

“Question is, are the Falcons going to put in more private money just to (satisfy the city’s site preference) or are the Falcons going to say we’re not doing anything more, you’re the ones blowing up this deal?”

The mayor himself didn’t rule out the possibility of additional city funds when asked last week.

“I’m not going to pre-judge anything related to the stadium negotiations,” Reed said. “But I am making it very clear that I believe the stadium should be located on the south site.”

Georgia State University economist Bruce Seaman predicts the deal could likely come down to private donors, whether it’s from the business community, the Falcons or even the NFL kicking in extra cash.

“Everybody at the end of the day so wants this done, whether it’s the Falcons, the mayor or business interests involved,” he said. “It’s hard to believe somebody is not going to come up with the money. Whether or not the church will be more flexible with their demand? That’s the key issue here.”

While the focus of negotiations has been the churches’ property, there also are three other small parcels, owned by different entities, that are needed for the south site, according to the GWCCA. Among them is a parcel that currently holds an advertising billboard.

“While Mount Vernon would be a piece of the south site puzzle, it is certainly not the only piece,” GWCCA spokeswoman Jennifer LeMaster said.

It’s not the first, nor last, time Atlanta faces a financial roadblock in its plans.

As one former city official said, pointing to the Atlanta Beltline, the streetcar and Olympic stadium projects: “Everybody is worried about where the money comes from. But the point of the matter is Atlanta has always been able to find money for the things that are important.”