Draft docs: Braves initially asked Cobb for $442 million


The deal between Cobb and the Braves

The Braves will move from Turner Field in downtown Atlanta to a new stadium in Cobb for the 2017 season. The team has agreed to a 30-year lease and Cobb has agreed to borrow at least $368 million to go toward stadium development. The cost of borrowing will be roughly $25 million annually, which will be paid for with a mix of taxes and rent payments from the Braves.

Stadium construction costs: $622-$672 million

What the public will contribute:

  • $368 million in bonds devoted mainly to stadium construction
  • $14 million in special purpose sales tax for infrastructure
  • $10 million from the Cumberland Community Improvement District

What the Braves will contribute:

  • $230 million to stadium construction
  • $50 million (the Braves have the option to spend this amount on parking)
  • $6.1 million in annual rent payments

How the public debt will be satisfied:

  • $8.6 million from a property tax levy
  • $6.1 million in annual rent payments from the Braves
  • $5.1 million from new property taxes on businesses in the Cumberland CID
  • $2.7 million from a $3 per night hotel room fee
  • $940,000 from existing hotel/motel tax
  • $400,000 from new 3-percent rental car tax

The mixed-use development

The Braves will invest $400 million to construct a mixed-used entertainment complex surrounding the stadium featuring shops, restaurants, housing and office space.

On Oct. 14:

“The County and the Authority have agreed to contribute [$442,000,000] for the construction of the stadium…”

Draft Memorandum of Understanding, written by the Braves.

On Nov. 14:

“At no time in our discussions with Cobb County … have the Braves referenced a $450 million public investment.”

Braves public statement posted on the team’s website.

On Aug. 15:

“We don’t intend to revisit the negotiation process or comment on drafts of documents, which are now approved and final.”

Braves statement when asked if their November statement was made in error.

Digging deep

How local governments spend taxpayer money is a hallmark of The Atlanta Journal-Constitution’s investigative journalism. Prior coverage has examined previously undisclosed financing and legal costs of the deal. Read related coverage at our premium subscriber website, MyAJC.com.

HOW WE GOT THE STORY

Cobb taxpayers have hundreds of millions of dollars riding on the Braves new stadium deal. Atlanta Journal-Constitution reporters have been tracking the deal for months to keep tabs on the stadium costs and obligations public officials are making in their name. For this story, Cobb County Watchdog Reporter Dan Klepal obtained previously undisclosed documents under Georgia’s Open Records Act that detail the initial negotiations between Cobb County and the Braves. The documents provide the first glimpse into how the deal evolved.

Day 2 of a 2-day report: Today's story details early negotiation between Cobb and the Braves over a new stadium. Sunday, the AJC, reported how the documents show Cobb Commission Chairman Tim Lee hired an attorney without the county attorney or commissioners knowledge or permission to negotiate the deal.

The Atlanta Braves were hoping for more than just a new stadium with their first pitch to Cobb County officials.

The team’s initial draft of a Memorandum of Understanding agreement with Cobb asked for $442 million from the public for stadium project construction; revenue from mass transit stopping at the stadium site; tax dollars to move roads and build bridges; and a promise that the county would use its powers of eminent domain to help the team acquire land, if necessary.

Those demands, and more, are contained in about 30 versions of the preliminary agreement that was negotiated between August and November last year.

» DOCUMENTS -- See the Braves-Cobb agreement revisions and comment on them: Part One | Part Two

The documents were obtained by The Atlanta Journal-Constitution through the state’s Open Records Act, and give the public its first glimpse into how the deal evolved over months of secret back-and-forth negotiations.

The newspaper also reviewed other documents, such as hand-written notes taken in meetings and emails between attorneys negotiating the deal.

The documents are significant because they show aspects of the deal in which the county pushed back against the Braves, along with areas of general agreement. And they show issues that have never been acknowledged, such as the hope for a significant contribution from state government.

A spreadsheet included in the documents reviewed by the newspaper lists five stadium budget proposals from August through early October. That document shows how the budgets change with the hoped-for state funding at $25 million, $45 million and $60 million.

And on Oct. 21, as the two sides began editing drafts of the MOU agreement, a note was added after a county negotiator’s edit: “Think (we’ll) get about $50 million from governor.”

The Braves have said all along that they might increase the project’s $622 million budget by $50 million to pay for additional parking. They have said that decision will be made at the team’s discretion, but have never mentioned that additional public money might be involved.

A schedule of meetings for Lee and Braves executives, also among the documents examined by the newspaper, has an October meeting with Gov. Nathan Deal regarding “streets and roads, parking, Tourism Act.” It’s unclear if that meeting ever happened.

Georgia’s Tourism Development Act allows new attractions to retain a portion of the sales tax generated at their facilities for 10 years. It’s unclear what other incentives, if any, the Braves might seek for infrastructure.

But the team issued a statement through a spokeswoman Friday that said they will not ask the state for funding “to support parking needs on the site.”

“Our $50 million in discretionary spending on the stadium will depend on parking and transportation needs,” the statement says. “Those are sill being assessed.”

A spokeswoman Deal’s office said last week that no state funding has been requested for the project.

`Not if public’

Dan McRae, the county’s outside legal counsel and point man in the MOU negotiations, pushed back against several of the Braves initial demands, the draft documents show.

The AJC reported Sunday that McRae was secretly hired by Cobb Chairman Tim Lee, who chose not to tell the county attorney or his fellow commissioners that he enlisted the attorney to negotiate with the team on the county’s behalf. Lee did not require McRae to sign a contract before he started negotiating with $400 million in public money.

Only the Cobb County Attorney’s Office is authorized to hire outside legal counsel on behalf of the county. Nevertheless, County Attorney Deborah Dance said McRae did a good job, calling him a “vigorous advocate” for the county.

That comes through in McRae’s first pass through the Braves initial drafting of the document.

For example, when the Braves wrote that the county “shall use its powers of eminent domain,” McRae underlined the term and simply wrote “no” in the margin of the document.

And when the Braves wrote that the county would pay for a long list of infrastructure improvements, McRae suggested that was an “open-ended commitment” and that the improvements should be limited to the “agreed upon budget.” On the issue of the Braves getting revenue from “bus or transit stops and vehicles,” McRae wrote “not if public.”

When asked about their request to keep transit revenue, the Braves issued a statement saying they wouldn’t “revisit details about the drafts … and the negotiation process.”

But the statement also said the proposed circulator bus, which would help fans get to the stadium from distant parking lots and hotels, was important for the entire area. The circulator would run throughout the Cumberland Community Improvement District.

“The Braves have no expectation of a revenue share on the circulator; our interest is to have some oversight of the sponsorship, partnerships and signage on the circulator to prevent marketing tactics that may adversely impact the investments made by our partners,” the statement says. “The MOU and subsequent agreements take care of that concern.”

The Braves initial draft of the MOU says that the team would keep “all revenues from …train, circulator, bus or transit stops and vehicles …”

While the Braves get to keep revenue generated at the stadium, they are making a significant investment themselves — $230 million in the ballpark. The team has also said the mixed-use development will cost about $400 million, and has promised that most of it will be open in time for the first pitch of the 2017 season.

Proponents of the public investment say that the stadium and entertainment district will create new jobs, increase property values and bring in additional tax revenue for the county.

`Who does business like that?’

The Atlanta Journal-Constitution requested all MOU drafts in November, one day after the Braves’ Nov. 11 announcement that they would move into a new Cobb County stadium for the 2017 season. But it would be eight months before the newspaper received the documents.

In response to the AJC’s November request, filed under Georgia’s Open Records Act, the county initially said there were no such records; then said they were exempted as “attorney work product.” After being told by the newspaper’s lawyer that attorney work product was not a legal exemption, the county responded that the records were not technically “in existence” until the document was “disseminated” to county officials.

The next day the MOU was released to the public, but nearly 700 pages of drafts were never turned over to the newspaper.

Attorney T. Tucker Hobgood found out about the drafts four months later.

Hobgood, who was preparing for his court challenge against the county’s plan to issue bonds for stadium construction, was picking through hundreds of pages of stadium-related documents when he noticed the spreadsheet detailing early budget proposals for the stadium.

“Nothing else was included that could be construed as documents reflecting negotiations,” Hobgood said. “I think it was left there by accident.”

Hobgood then began asking County Attorney Dance for MOU drafts. Dance eventually tracked the documents to McRae, who had retained all versions of the drafts. Dance and the commissioners were not made aware of the Braves negotiations until early November, after the talks had been going on for months and just days before the public found out.

Hobgood said citizens have a right to evaluate how the deal was negotiated. And it’s important work, he said: the $400 million ballpark investment is more than the county’s entire general fund budget this year.

“Think about how much work goes into public documents and publications about how that money is going to be spent,” Hobgood said of the county budget. “If there was a county person involved in the Braves negotiations, they didn’t retain a single piece of paper. Who does business like that?”

The county has been continually hammered by critics over its handling of the Braves deal — from a vote to approve the MOU two days before Thanksgiving, to releasing important agreements after work hours on the Friday of a holiday weekend, to not allowing critics of the stadium deal to speak at a public hearing after proponents filled up all the slots.

Holly Manheimer, executive director of the Georgia First Amendment Foundation, said there is no question the draft documents should have been made public immediately upon the newspaper’s request. She said government documents in possession of private parties, like McRae, are still considered public under state law.

And they have the power to sway public opinion.

“That’s just the kind of thing that encourages community insight, discussion and activism,” Manheimer said.

Brought Up To Speed

Commissioner Lisa Cupid found out about the Braves deal three days before the public. She was summoned to a meeting with the county’s business leaders, and said it felt like everyone was in on the secret but her.

“It was very frustrating to be in a room full of people who were more aware of the deal than I was,” she said. “Why is somebody negotiating on behalf of the commissioners without talking to the commissioners, without the commissioners even knowing about it?”

Commissioner Bob Ott, who represents the Cumberland area where the stadium will be built, found out a couple of days before Cupid when he was invited to a meeting of the Galleria Authority Board. He was surprised to see Braves executives there.

“I got the impression that I was the only one in the room being brought up to speed,” Ott said.

Like other professional sports stadiums, public money is contributing heavily toward the Braves’ new home — $392 million. About one-fourth of the county’s debt payments will be covered by the Braves $6.1 million in annual rent.

To the south, the Atlanta Falcons are building a $1.2 billion stadium in downtown Atlanta, with $200 million in public financing and hundreds of millions more in hotel-motel tax revenue funding operations and maintenance over 30 years.

While Cobb’s county attorney and commissioners were kept in the dark about the Braves deal, Lee was certainly talking up the project in other circles.

A schedule of events related to the project shows Lee met with executives from the Cobb Chamber, the Cumberland Community Improvement District, the hotel/motel association, and the Cobb-Marietta Coliseum Authority in September and October. He needed money or contractual agreements from them all.

One of the last entries on the calendar address how the deal would finally be made public.

“Meeting with Marietta Daily Journal (news leaked),” the entry reads.

The MDJ posted their online story about the Braves move 20 minutes before the rest of Atlanta’s media was informed. And the next day, the newspaper ran a front-page picture featuring Lee in a Braves jersey.

Two months later, Lee was named the Cobb Chamber’s Citizen of the Year. The award was presented by MDJ publisher Otis Brumby III.

About the Author

Editors' Picks