According to Atlanta’s 11alive news, the Atlanta city council could vote to approve a Falcons stadium bill as soon as today, which — after the state Georgia World Congress Center Authority gave its expected rubber-stamp on Friday — would pretty much guarantee the project’s passage, with only the vote of the city-run Invest Atlanta needed for final approval. That’s pretty alarming, given that there still hasn’t been any official attempt made to figure out how much the stadium would cost city taxpayers, taking into account the excess hotel-motel taxes that would go to subsidize future stadium operations and improvements.
So if the Atlanta city council isn’t going to do the math, let’s give it a shot ourselves:
- Previously established costs include $200 million in up-front construction costs, $30 million in construction sales tax rebates, and $24 million in land costs, for a total of $254 million.
- Once the first $200 million in public stadium bonds were paid off, anything left over of the Falcons’ share of the city’s 7% hotel-motel tax — 39.3% of the tax proceeds, according to the latest MOU released Friday — “will be applied for the maintenance, operation and improvement” of the new stadium. The MOU doesn’t put a total cap on this annual subsidy, but from the chart of past hotel-motel tax collections (see page 5, and thanks to FoS reader cityzen for the link), we can see that the Falcons’ share of the hotel-motel taxes is currently about $17 million a year.
- Under the MOU, the hotel-motel tax funding for the Falcons would be extended through the year 2050. Thirty-seven years’ worth of $17 million payments equals $629 million.
- Normally, I’d point out that that $629 million is in nominal payments, so we’d need to calculate the present value — the same as when you figure the price of your house, you do it by calculating what you paid now, not by adding up all your mortgage payments for the next 30 years. But since the hotel-motel tax revenues have been pretty consistently going up each year, the two factors should roughly cancel each other out, so we should still be at around $600 million in present value.
- The first $200 million of that $600 million comes off the top to pay for the city’s stadium bonds. Also, whereas previously some of this money was being used to pay off debt on the Georgia Dome, under the new deal the Falcons would pay off the remaining debt, which comes to around $100 million, per Forbes. So that would leave the team with $300 million worth of future excess hotel taxes to spend on pretty much whatever it felt like.
- Add the $300 million to our original $254 million, and we get a total public subsidy for the project of $554 million.
Could this be off? Sure: growth in hotel tax revenues could be less than what it has been; the financing costs for the stadium could eat up more of the money than I’ve estimated; or half a dozen other uncertainties. But as a best guess for how much the Falcons deal would cost the public, “more than half a billion dollars” is an excellent starting point. Now to see if anyone mentions that figure during today’s council meeting.