As plans to build a new retractable roof stadium for the Atlanta Falcons advanced Monday, a remaining hurdle loomed larger: legislative approval to raise the $300 million public portion of financing for the project.
In a first step toward building a new $1 billion playing field, the Georgia World Congress Center Authority approved a “term sheet” with the basic elements of a deal. It affirmed the roughly 30-70 public-private split of construction costs for the new stadium, which could open by 2017.
But for the plan to work the legislature has to boost the GWCCA’s borrowing cap to $300 million, said GWCCA Executive Director Frank Poe. It is $200 million now.
Voting down a higher borrowing cap “would pretty well put the brakes on (the stadium)” Poe said.
Winning legislative backing could be a challenge. Several leading lawmakers, in Athens on Monday for a pre-session meeting, signaled mixed feelings about supporting the borrowing limit increase to enable the public part of the financing package.
House Speaker David Ralston (R-Blue Ridge) said he doesn’t think stadium supporters have made a forceful argument for the need for a new facility.
“This is more than about the Falcons. And because of that, we have to proceed very carefully,” Ralston said. “It’s a tough economic climate … I think we have to move cautiously.”
The GWCCA, a state entity, would issue bonds for the construction money, and an already-approved extension of the city of Atlanta and unincorporated Fulton County’s hotel-motel tax would pay them off over time.
The Falcons would be responsible for the rest of the money. The Georgia Dome was financed completely with hotel-motel tax collections.
State Rep. Harry Geisinger, a Roswell Republican, said he would likely vote in favor of enabling the project based on its economic development potential.
“When you look at all the facets of the issue and realize that most of it will be paid for by Arthur Blank – and in the end we [the state] will own the stadium – it’s a good deal and it will bring a tremendous amount of tourism to Georgia,” he said.
“Some are taking a knee jerk position asking what the government is doing,” he said. “But what the government is doing is providing jobs and revenues.”
“I’m currently agnostic about it,” House Minority Leader Stacey Abrams (D-Atlanta) said. “But we have a lot of critical issues to take on this year and we need better information to make sure we understand the proposal.”
The terms approved Monday also say the state would own the stadium, with the Falcons operating it under a 30-year deal and paying annual rent of $2.5 million, with that rising 2 percent a year. The Falcons would operate the facility and retain all revenue.
A deal could be undone if a firm estimate of hotel-motel tax collections cannot be agreed upon. Collections are projected to bring in between $270 million and $313 million, but Falcons CEO Rich McKay said a final figure is central to whether the team completes the deal or walks away.
That’s because the Falcons would pick up the tab if collections are low. The bonds are not backed by any other public financing.
Another big issue to be resolved is a specific site. The GWCCA and the Falcons have focused on two: one just south of the Georgia Dome, the other a half-mile north on Northside Drive. Either way The Dome would be demolished.
McKay said if the deal falls apart the Falcons would look at alternative sites elsewhere in the city and metro Atlanta.
The $1 billion construction pricetag would likely grow with related work. Mayor Kasim Reed, a supporter, has suggested the city could spend another $200 million in infrastructure improvements in the area.
Falcons owner Arthur Blank, in an interview after the authority meeting at his Blank Foundation offices in Buckhead, said he was pleased with the term sheet.
Blank also acknowledged that some of the team’s cost would be paid through Personal Seat Licenses, which require fans to pay for a seat before buying season tickets and could raise between $100 million and $200 million for the team.
Asked why the Falcons don’t pay the full costs of a new stadium, Blank said he is comfortable using hotel-motel tax collections because visitors largely pay them. He would have a different opinion if taxes came from another tax source, he said, though he did not elaborate.
Blank is on the board of directors of Atlanta-based Cox Enterprises, whose media holdings include The Atlanta Journal-Constitution.
Opinion polls have shown public skepticism of the project, with a survey commissioned by The Atlanta Journal-Constitution in July that found that 67 percent of respondents opposed using hotel-motel tax money.
Others have criticized the negotiating process, which they said has been behind closed doors with no public input. William Perry, executive director of Common Cause Georgia, said he was rebuffed when he asked to speak at Monday’s authority meeting.
“The fact that this board doesn’t want to allow a member of the public to share thoughts or give any kind of input is just shocking,” he said. “For a state agency to take this kind of $1.2 billion step without public input or trying to engage the public, I think is going to be detrimental to the process.”
The authority said it never got a request from Perry.
A spokeswoman for Reed said the Atlanta mayor supports a new stadium because it will help assure the city boasts “best in class” convention and tourism facilities.
Next steps include finding an architect, a process the GWCCA began after Monday’s vote by sending out an Request for Qualifications. The GWCCA and the Falcons also will work on a Memorandum of Understanding, a more definitive agreement that will hash out any details not finalized in the “term sheet.” Poe said he hopes to complete the MOU by mid-January.
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