INSIDE THE DEAL
The Memorandum of Understanding between the Braves and Cobb County, released late Tuesday, includes these points:
- The Braves have "determined that it is in the best interests of the team and its fans to relocate to a site that will provide greater access to its regional fan base," and that the move "is important to providing the team with the opportunity for long-term economic and competitive viability."
- The parties expect a total stadium budget "not to exceed" $672 million, with the county ultimately responsible for $300 million and the Braves for up to $372 million. Of the Braves' $372 million, however, $92 million will be from additional bonds to be issued by the county and repaid from $6.1 million annual payments by the Braves to the county.
- The Braves will have "sole and absolute discretion" to cut the project budget by up to $50 million, which would reduce the team's contribution but not the county's.
- The Braves will hire the architect, subject to the county's approval.
- The Braves will retain all revenue from the stadium (except for the $6.1 million annual payment to repay part of the team's commitment toward construction) and will be responsible for routine maintenance and operating expenses.
- The team and county will make equal annual contributions into a fund for capital maintenance and repairs, but the agreement does not specify a dollar amount for those contributions or the source of the county's portion.
- The county will have the right to conduct up to three special events per year in the stadium, with the net revenue from those events to be used toward debt service.
- The Memorandum of Understanding "is not intended as a complete and final agreement."
— Tim Tucker
Cobb County’s agreement with the Atlanta Braves to build a new stadium in the Cumberland Mall area leaves a lot of issues to be resolved in future negotiations.
The county late Tuesday released a 20-page Memorandum of Understanding that outlines the basic terms for building a $672 million ballpark and an adjoining mixed-use development on the 60 acres of land. The County Commission will vote on the proposal next week, without holding any public hearing related to the deal.
The agreement, as expected, calls for the county to be responsible for $300 million of the cost of building the stadium. However, it stipulates that the Braves have the option of cutting the stadium budget by up to $50 million, and thus reducing the team’s contribution by that amount.
Cobb Commission Chairman Tim Lee acknowledged there is a lot of work yet to do, and that meeting the deadlines in the agreement won’t be easy.
The Braves want the ballpark to be ready for the first pitch of the 2017 season. The agreement dictates that the county’s bonds be issued by Dec. 31, 2014; that construction starts by Jan. 1, 2015; that the team takes occupancy by Dec. 15, 2016; and that all construction be finished by Feb. 1, 2017.
The agreement runs through 2047, with the Braves having the option for a five-year renewal. The Braves will hire the architect and construction manager.
“It’s going to be a challenge,” Lee said. “This is a huge project and it’s very involved. But I think … we’ll put a good team together that will be solely focused on getting it done, and we’ll do what we need to do to get it done.”
Other agreements still to be negotiated between the county and the team include a stadium operating agreement, a development agreement, a transportation and infrastructure agreement, and bond financing documents.
The first page of the agreement spells out the parties’ reasons for making the deal. It says the Braves have “determined that it is in the best interests of the team and its fans to relocate to a site that will provide greater access to its regional fan base” and that the move is “important to providing the team with the opportunity for long-term economic and competitive viability.”
Steve Labovitz, an attorney who negotiated the Philips Arena deal on behalf of the city of Atlanta, hadn’t reviewed the MOU Tuesday but said it is typical for those documents to leave a lot of issues unresolved. Labovitz also negotiated on behalf of the city of San Diego, when it built a new ballpark for the Padres.
“The MOU is a document that says we’re going forward if we get everything else negotiated,” Labovitz said.
The Braves’ MOU with Cobb is much less detailed than one reached earlier this year between the Falcons and the state regarding a new downtown stadium. That agreement runs 87 pages, more than four times as long as the Braves’.
The county’s plan to pay its $17.9 million annual debt payments had previously been disclosed. It will cover half that amount by redirecting property tax revenue that is currently being used to pay off parkland purchases. Additional revenue will come from existing hotel-motel taxes, a rental car tax in unincorporated areas of the county, and a tax hike for businesses and rental housing in the Cumberland area. There also will be a per-night hotel room fee in that area.
Of the Braves’ $372 million portion, $92 million will be from additional bonds to be issued by the county and repaid from $6.1 million annual payments by the Braves to the county.
The Braves have full control of the stadium and will pocket revenue from concerts, festivals or other special events. The county can host three events per year, and must use any earnings on paying debt service on the bonds until they are paid off.
The memorandum states that the county and the Braves will share responsibility “on an equal, 50/50 basis” for all capital improvements, maintenance and repairs needed in the stadium. It includes a 2 1/2-page list of covered items, ranging from scoreboards and seats to carpet and painting. The team and county will make annual contributions to a fund to cover such expenses, but the preliminary agreement does not put a dollar amount on them.
Opposition to the stadium deal has welled up across the county — and elsewhere.
Emails to commissioners over the past week are dominated by people in opposition.
Beyond that, transparency advocates, tea party groups and environmentalists are all seeking to rally opponents against the deal. Common Cause Georgia, the watchdog group that challenged the use of Atlanta hotel/motel taxes for a new Falcons stadium, plans to demand that Cobb legislators call a referendum, as well as allow more public discourse.
“We certainly don’t think there should be referendums on every issue, but when you’re talking about a project with this amount of money and with this much impact on the region, we just think voters should get to weigh in directly,” said William Perry, the group’s executive director.
An alliance between the Atlanta Tea Party Patriots and the Sierra Club, an odd-couple partnership that fought last year’s transportation tax, has reunited to oppose the stadium deal.
Lee scoffed at a reporter Tuesday when asked why there wouldn’t be a public hearing before the commission’s vote.
“We’ve made a decision we’re not going to do that,” he answered. “I don’t know that having a public hearing would add to the objective of getting more input since we’ve got a lot of input to date.”
The stadium’s boosters aren’t sitting idle. Cobb business leaders have created the Cobb Home of the Braves in support of the stadium enterprise. And backers filmed a commercial boosting the project that began airing Tuesday night.
John Loud, the owner of Loud Security Systems who helped pay for the ads, said the property that now produces only a trickle of tax revenue could soon be funneling millions of dollars that could boost schools and improve other services.
“It’s a no-brainer,” Loud said.
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