PRO: Why Cobb’s deal is a potential winner

Staff writer Dan Klepal contributed to this article.


WHAT’S NEXT

Tuesday night: The Cobb County Commission is scheduled to vote on a Memorandum of Understanding that contains the key terms of a deal for a new Braves stadium in the Cumberland Mall area.

If deal is approved: The Braves will hire an architect and a general contractor. A series of more definitive contracts between the Braves and Cobb County will be negotiated. The team hopes to break ground in the second half of next year.

INSIDE THE DEAL

Highlights of the agreement on the table:

  • Cobb County and the Braves "anticipate" a total project budget, including the stadium, parking and related infrastructure improvements, of up to $672 million. The county will be responsible for $300 million and the Braves for up to $372 million. (Plus interest in both cases.) Of the Braves' $372 million, $92 million will be from additional bonds to be issued by the county and repaid with $6.1 million annual payments by the Braves to the county.
  • The Braves have the right to cut the project budget by up to $50 million, which would reduce the team's contribution but not the county's. (Braves executive vice president Mike Plant said such a reduction, if made, would be related to savings in the need for parking structures.)
  • The Braves will be responsible for cost overruns unless caused by changes requested by the county.
  • The Braves will hire the architect, subject to the county's approval, and will manage design and construction.
  • The Braves will retain all revenue from the stadium (except for the $6.1 million annual payment to the county to repay the $92 million in bonds funding part of the team's commitment toward construction). The Braves' revenue streams will include tickets, concessions, parking, suites, sponsorships and naming rights, among others.
  • The Braves 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 needed to keep the stadium up to Major League Baseball standards. The agreement does not specify the amount of those contributions.
  • The Braves commit to play in the stadium from the 2017 through 2046 seasons.

— Tim Tucker

When Cobb County commissioners decide whether to spend hundreds of millions of dollars in public money on a new Braves stadium, proponents will argue that the county should provide the money without hesitation.

Since the Braves and Cobb announced two weeks ago they’d struck a deal to move the team to the Cumberland Mall area, Commission chairman Tim Lee, a largely united Cobb business community and residents excited about living closer to games have said the move will boost the county’s image, make it more of a magnet for development and widen its tax base.

The Atlanta-Journal Constitution spoke with those close to the deal and experts in local government, stadium construction and large-scale retail development about the arguments in favor of the deal:

ECONOMIC PAYOFF WILL FOLLOW

The stadium will be a “grand slam” economically for Cobb County, proponents say.

Cobb County Commission Chairman Tim Lee and other officials have said the $672 million stadium and an adjacent $400 million entertainment-retail-residential complex planned by the Braves will create thousands of jobs during and after construction, as well as trigger more development in the already bustling Cumberland area.

Veteran developer Jeff Fuqua, who has analyzed the deal and is likely to bid to be a part of the mixed-use development, compared the plan’s scale to his own $400 million project known as Town Brookhaven. If the revenue from his project is any guide, he said, Cobb could look to generate at least $100 million in sales and property taxes over a 20-year period on the mixed-use development alone.

Bringing the Braves to Cobb also will raise the county’s profile, Lee has said. In fact, he argued it already has: “We would have had to invest many millions of dollars to get the publicity Cobb County has received the last two weeks.”

A GOOD DEAL FOR TAXPAYERS

The Braves are paying 55 percent of the cost, and the county is protected from cost overruns.

The Braves are responsible for up to $372 million and the county for $300 million of the stadium project’s estimated cost. Neither figure includes interest on debt payments.

It can be misleading to compare the public-private funding percentages of one stadium to another because of the complexities of individual deals, but a 55-percent private contribution to construction is higher than often has been the case over the past two decades, according to Holy Cross economics professor and sports finance expert Victor Matheson said. (In the case of the new Falcons’ stadium in downtown Atlanta, the private contribution toward construction is significantly higher, but that is at least partly offset by additional hotel-motel tax revenue that will help the team with operating costs.)

The Braves-Cobb agreement stipulates that any changes or upgrades that boost the cost will be paid by the party requesting them, protecting the county from cost overruns unless it seeks the changes. It’s an important protection because a typical baseball stadium incurs about a 30 percent cost overrun, said Villanova University sociology professor Rick Eckstein, who has studied stadium deals for years.

TRAFFIC ISSUE CAN BE SOLVED

Most fans will have an easier time getting to games, the Braves say.

A big issue is interstate traffic around the site near the I-285/75 junction. Cobb officials haven’t conducted a traffic study, but Georgia Department of Transportation data suggests that for many fans, the trip to Cobb could be the same or better as traveling to downtown Atlanta. According to the Braves, their largest concentration of single-game ticket buyers lives on the north side of the city.

DELAY WOULD BE DANGEROUS

The deal is a good one for Cobb and could fall apart if there is a delay, Lee has argued.

The County Commission chairman said delaying the vote even a month could threaten the deal as the county and the Braves face a series of deadlines to open the stadium in 2017. Last week, Lee scoffed when a reporter asked if the commission planned to seek public input on the deal: “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.” Since that time, commissioners have held four town hall meetings, although three were Monday.