The Marietta Daily Journal, which is emerging as the go-to source for early news on the Atlanta Braves stadium plan (it was the first to announce the deal on Monday), has some more details today about Cobb County’s proposed financing for the project:
- The Braves would buy 60 acres of land at the intersection of Interstates 75 and 285, then deed the 15 acres required for the stadium and 2,000 parking spaces (why only 2,000 for a 41,000-seat stadium?) to the Cobb County coliseum authority. The rest would remain Braves property, and would pay property taxes, which relieves one of my concerns from yesterday. Still, the stadium itself being exempt from property taxes is an additional subsidy to the team, though I don’t have figures for how much of one.
- The previously announced county expenses will include money for a new pedestrian bridge over I-285 and a new exit ramp off the interstate, though it’s still unclear whether that will be sufficient to allow Braves fans to get to the game without massive traffic tie-ups.
- The $8.7 million a year that the county would get from “reallocating existing property taxes” would actually come from taking three property-tax surcharges that are currently funding parks projects, and which were set to expire in 2017 and 2018 once those projects were paid off, and instead extending them for another 30 years. This is “existing” taxes in the sense that it’s taxes that are being paid now, but it’s also undeniably a tax hike in that property owners will be charged more in taxes in the future — an extra $26 a year for a $200,000 home, according to the Journal — if the stadium is approved than if it isn’t.
Cobb County chair Tim Lee, naturally, says all this will be more than worth it, since “this small investment by the residents will bring back and yield a significant growth in our digest, in our sales tax, in our economic viability.” But how likely is that? Let’s use our old friend, math.
In terms of sales taxes, Georgia Public Broadcasting reported yesterday that losing the Braves would cost Atlanta about $4 million a year in sales tax revenues, according to a study by Georgia State University economist Bruce Seaman. (The state of Georgia, he concluded, would lose pretty much nothing, as spending would just shift from one part of the state to another.) Atlanta has a 1% local sales tax surcharge, so that would imply $400 million a year in spending by Braves fans, a figure that defies belief given that the Braves only bring in $225 million a year total, including cable fees and other items that aren’t subject to sales tax. GPB didn’t provide a link to Seaman’s study, but presumably he applied some kind of multiplier that assumes that Braves fan spending recirculates throughout the local economy — the number still seems high, but let’s go with it for now.
Cobb County actually has a 2% local sales tax compared to Atlanta’s 1% local surcharge, so if the same money is spent in Cobb instead of Atlanta, the county would be looking at a gain of $8 million a year. That would be enough to pay off about $120 million in stadium bonds, or 40% of the county’s $300 million cost.
What about the “growth in our [property tax] digest”? Currently, property tax receipts for all of Cobb County run about $190 million a year. That means that for property tax receipts to rise enough to pay off another $180 million in stadium costs — that’d be about $12 million a year — the average value of every parcel of Cobb land, including those 20 miles away in the opposite corner of the county, would have to rise in value by 6.3% solely by virtue of sharing the county with a baseball stadium. Or everything within three miles could double in value, which would have the same effect.
Given that previous studies have found that property values only rise very slightly when a new stadium is built — just over 3% for properties in the immediate vicinity of a new MLB stadium, according to one report — the idea of either the stadium district doubling in value or properties way out in Powder Springs gaining 6% seems pretty far-fetched.
So, Cobb County would certainly steal some revenues from Atlanta by virtue of hosting the Braves, which would offset its costs somewhat — but Cobb taxpayers would still likely be looking at a loss in the $100-200 million range. And that’s not accounting for the opportunity cost of taking 15 acres of land and handing it to the Braves tax-free for their stadium, removing the possibility of future development there that might actually pay taxes. Or the opportunity cost of what else the county might do with its $300 million that could increase economic activity (and tax receipts) some other way. It’s not the worst stadium deal ever — that’s going to be a tough record to break — but it still looks like an awfully high price for Cobb taxpayers to pay for a slightly shorter drive to the ballgame.