Well, that was fast: Atlanta Mayor Kasim Reed announced last Friday that he’d have a revised Falcons stadium finance plan ready to go by the end of the month, and now only a week later, there is a new plan:
Mayor Kasim Reed said the city would provide $200 million of construction costs through bonds backed by the city’s hotel-motel tax. The Falcons franchise, owned by Home Depot co-founder Arthur Blank, would provide $800 million and be responsible for construction cost overruns.
The Falcons would pay for up to $50 million in infrastructure costs not included in the construction budget and help retire the last few years of debt on the Georgia Dome, which was publicly financed entirely using the hotel-motel tax.
Also, Blank’s private foundation and the city each would spend $15 million on surrounding neighborhood development.
That’s actually pretty much the old plan, along with $30 million thrown at surrounding neighborhoods to make local city council members happy, though half of that will come from tax money collected by an existing city TIF district, so really it’s only an extra $65 million from the Falcons. And there’s still no official word on the $100 million or maybe more in future tax revenues that the Falcons have been reported to be asking for — the terms of the operating agreement for the stadium aren’t official yet, and that’s where those kind of future subsidies would be revealed. And, of course, it’s not a “deal,” no matter what the headlines say: the Atlanta city council still needs to hold hearings and vote on this.
Speaking of hidden subsidies, this might be a good time for me to address the analysis that Atlanta blogger Al Gray posted recently claiming to show that the Falcons would only be on the hook for $43 million out of a total $1.17 billion stadium cost. Simplifying Gray’s chart a bit, we have:
- Hotel/motel tax money for construction: $359 million
- Hotel/motel tax money for future maintenance and improvements: $178 million
- PSL sales: $150 million
- Construction sales tax rebates: $30 million
- Donated public land: $24 million
- Atlanta infrastructure costs: $53 million
- Value of naming rights and concessions rights given to the Falcons: $128 million
- NFL G-4 program: $200 million
- Falcons: $43 million
There are a couple of quibbles I have here: It’s not entirely clear where that $359 million figure comes from, since Reed is claiming it’s only $200 million in up front hotel/motel tax proceeds (or rather, it’s clear it comes from here, but not whether that represents the actual final bond amounts). Counting PSL sales as public money just because the state would be handling the sales is a bit dodgy, since if anything it’s money that will cost the Falcons some as fans plunk their spending money down on the right to buy tickets rather than on tickets themselves. (You could certainly argue that PSLs could be used to offset the public share of costs, but that’s a different debate.) The Falcons now say they’ll pay for the $50 million in infrastructure costs, though whether that’d be offset by some other concession in the lease we won’t know until that document is released. And naming rights and concessions rights usually end up going to the team, though again, you could make an excellent case that naming rights in particular for a publicly owned building should by all rights go to the public.
Even bending over backwards to eliminate any contestable items, though, we still have $200 million in construction costs, plus $178 million in present value of future improvements, plus $30 million in construction sales tax rebates, plus $24 million in land costs, for a total of $432 million in public costs. And after selling naming rights and PSLs and all, the Falcons would indeed be on the hook for only about $43 million, though in using naming rights and PSL proceeds they’d be giving up a big chunk of the new revenues they’d otherwise be looking to get out of a new stadium. That sounds a heck of a lot worse for the public than the “$200 million public, $800 million private” headlines, but then, that’s undoubtedly why Reed put his number and not the other one in their press release.