Cobb County’s “existing property taxes” for Braves stadium are actually a tax hike

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.


25 comments on “Cobb County’s “existing property taxes” for Braves stadium are actually a tax hike

  1. I would like to see a breakdown of the types of businesses within the CID, because as a nearby resident I just don’t see how the majority of these businesses will benefit enough from a new stadium to generate enough tax revenue. The pedestrian accommodations are terrible in that area, so even with (or perhaps because of) a bridge over I-285 linking Galleria/Cumberland with the new stadium, I don’t see much foot traffic to local businesses before or after games without significant additional improvements. It’s quite a stretch for me to imagine many fans walking or taking a shuttle to Galleria/Cumberland Mall just to eat anyway. It’s a bit of a haul. If you take a drive around the immediate area of the proposed stadium, you’ll see lots of fast food chains, a few extended-stay motels, gas stations, and some retail. I’m not sure how this will be appealing enough to visiting fans to generate much revenue. And if the argument is that the presence of the stadium will bring the business needed to drive improvements in that area with regard to the number and quality of restaurants, etc., how come that never happened around Turner Field? If you think just because the new stadium will be in Cobb County that it will be a nicer atmosphere than the ” ‘hood” around the Ted, don’t be so sure. It’s not an altogether great area. And whatever restaurants, etc., would jump on board because of a new stadium would have to find a way to make money all year round.

    Yes, 2000 parking spaces seems ridiculously low. Maybe that number refers only to the portion that will be deeded to the coliseum authority, while the rest would not be. (The same coliseum authority that ran a $1.5 million-dollar deficit last year, BTW.) Seems like the total parking would have to be much higher, especially this was one of the Braves’ main complaints about the Ted.

  2. Any word on the actual ballpark design? Will it have a retractable roof or some other kind of shade/climate cooling designs to counter those Hotlanta days??

  3. Looks like I was wrong about property tax rates staying the same (or, at least, half wrong). For residents I guess it’s just a matter of whether they feel extending the property tax surcharge is worth having a stadium nearby. I’m guessing they’ll like the boost in property values (which will rise far beyond the 3% in that study concerning stadiums with almost no similarity to the Cobb County project).

    BRW,

    When I am in that area for work, I walk between the office, hotel (Hyatt Place across the highway from the stadium site) and restaurants. I will agree that it’s not made for walking, though. My guess is that they’re expecting offices to offer night parking for games. That works well in San Jose, where the SAP Center has a decent sized lot, but not one big enough for all of the cars that show up for Sharks games.

  4. According to a radio news break this morning, the Atlanta Business Chronicle reports that potential development in the area around the new stadium is over ONE BILLION DOLLARS. The two or three blocks around the stadium site will be completely redone in three years. As I said to my co-workers this week, the name Cobb County just got splattered across every sports web site and newspaper in America for two to three days. At least 100 million people now know that the Braves will be playing in Cobb come 2017. That publicity is worth millions alone.

    Ask any town that has lost a professional sports team and they will tell you that it means something. Maybe it means more than it should, but it does yield some clout. Ask Atlanta hockey fans who have lost not one, but TWO pro hockey franchises.

  5. How did Atlanta survive the loss of two hockey franchises? If only they had shelled out hundreds of millions to keep them around, people would still know that Atlanta was a city that still exists.

    What’s funny about deals like this one is that the Braves will still be called the ATLANTA Braves, not the Cobb County Braves. So Atlanta gets whatever marketing juice the team delivers (if any), while Cobb County taxpayers pick up the tab. But I’m sure they’ll be consoled by the fact that their county got some newspaper mentions.

  6. Scott,

    Cobb County must have some real GUNSLINGERS in the commercial/residential property business–to “potentially” invest 1 billion dollars in development based on a stadium deal that was just announced this week and hasn’t even been figured out yet. My first question is if Cobb County is so hot as to be getting 1 billion dollars in investment why in the world would they take any land off the tax rolls?

    I don’t think the deal is that unusual. The issue in Atlanta and many southern states is that there really isn’t scarcity in land, so its hard to bid up the costs. A county-wide increase in value at that level on a baseball stadium is less plausible than say investment in education, transit, or infrastructure to make the region more attractive for high-value businesses. Sports doesn’t really do that.

    Unless there is a radical name change (“Cobb County Braves”?), the current sports-paged focused news isn’t really going to last. Quick–what Miami suburb is the Miami Dolphins stadium in? How’d that stadium help “economic development?” That should tell you something.

  7. > it’s still unclear whether that will be sufficient to allow
    >Braves fans to get to the game without massive traffic tie-ups.

    I’ll go ahead and answer a big “No” for that. I-285 is already a parking lot during rush hour, and adding in people heading for a game will just make it worse.

  8. When I lived in Atlanta several years ago, there was talk of building a ‘northern arc’ more or less going from Suwanee to Alpharetta to Kennesaw. At the time, there was a lot of NIMBY’s backed by a lot of wealthy folks trying to stop it. Setting aside the (lack of) merit of a taxpayer funded stadium, this might bring back some impetus to possibly restart that project? Not that it should be built purely for Braves fans, but it would seem to allow a lot more folks to get to this new site by going west to, and then south on, I-75, avoiding I-285 entirely.

    Any thoughts from those still living in the area?

    Peace be with you.

  9. Neil,
    From what you have read this far, is there any reason to believe that the ‘Pleasure Island’ the Braves want to build around the stadium will be exempt from property or sales tax collection by Cobb as part of this ‘deal’? I’m thinking that the Atlantic Station project in Atlanta might be a comparable scale for this project?

    Also, was the study you referenced looking for a 6% property value increase per year, or after 30 years?

    Peace be with you.

  10. Cfountain72 – The Northern Arc is a non-starter. My bet is that it’ll never happen – stadium or no stadium. I haven’t heard mention of that project for some time. As I recall, Gov. Perdue (who served 2 terms) was an opponent. (Just my recollection – could be wrong on that.) Anyway, I think the Northern Arc is a concept whose time has come and gone. JMHO, having lived in the area for a long time.

  11. Cfountain72: According to the MDJ article linked in the above post, the surrounding development will be subject to taxes.

    As for the 6% property value increase countywide, that’s not from a study, that’s what you’d need to get $12 million a year in new property taxes in a county that currently generates $190 million a year total. If it didn’t happen for several years, then it would need to rise even more than that to pay off the accrued debt.

  12. Well, I live in intown Atlanta and I will say there’s a lot of really sore feelings going around. While Cobb residents are slightly in favor of the deal, the majority of the rest of Metro Area is vehemently opposed to the relocation for various reasons. Some of this is history….Cobb County has a history of being very anti-progressive, which cost them hosting any venue in the Olympics…….but the anger is at the same time wrongly taken out on current Cobb residents, who like the rest of the Braves fan base weren’t asked how they felt about this ahead of time. All that said, having a major league baseball team relocate to the suburbs seems, well, very 1980s-ish. And completely ignores the transformation of the City of Atlanta and grow of the Southern burbs, both of which are younger in demographics than the target “catchment” area and more likely to come out for, say, evening games during the week. Sounds like the Braves are even counting on a fall of attendance which they will offset by increased parking and other revenues. And while the Braves aren’t a public utility, this seems like a really bad trade, since a decreased fan base now will multiply in the future. Wouldn’t be surprised to see the Braves looking to relocate to, say, Charlotte, once the Cobb contract is up.

    I once loved you, Atlanta Braves, but not so sure I can anymore.

  13. It’s easy to throw out the “surrounding development” argument and get everyone thinking about entertainment districts and the like around the stadium, all subject to property (and TIF) taxes.

    But we should not forget one of the reasons why new stadia seem to cost so much and take up so much land these days… namely that all the ‘extra’ entertainment options that the team says it needs to entertain fans in the ‘ballpark village’ will actually be built inside the stadium itself. So if you are an enterprising business owner overjoyed at the prospect of maybe opening a jack in the box or in & out in one of the (expensive) commercial units adjacent to the stadium (and which carries the TIF penalty mentioned above), your business plan better include making a go of it on the scraps and leftovers that the team itself can’t exploit within the confines of the stadium.

    Time and time again business owners around sports facilities who welcomed the new building/team’s arrival are very, very disappointed in the actual uptick in their business once the facility is built. Some have even said their business has dropped, and many find the increase (if any) is so small that it doesn’t even cover their new imposed TIF payments.

    Taxpayer subsidized sports facilities aren’t about rising tides lifting all boats, they are about raising the team owner’s boat a very, very long way.

  14. Who currently owns the these 60 acres,at the intersection of I-75 and I-285? And what currently occupies these 60 acres, if anything?

  15. So when are the Hawks going to start crying for a new Philip’s arena? I’m going to say a year or two. Georgia is to giving away stadiums like Oprah is to giving away cars.. And YOU get a stadium, and YOU get a stadium, and YOU get a stadium, and YOU get a stadium….

  16. Most if not all of the sixty acres is currently wooded. I think it is already in public hands, maybe some owned by the State of Georgia but most by Cobb County. Several people who live up there have said there is a sewage treatment tunnel under part of the property that makes it smell terrible certain times of the day due to ventilation shafts. If that’s the case, they’ll have to do something about it. Will Cobb County’s water utility, and thus customers, have to pony up money to cover that cost?

  17. It is very clear that the county has A) done no independent economic study to come up with real numbers B) is exaggerating -as all those involved in these deals do- the benefit to residents C) has scheduled a process that allows for minimal public or independent input. (10 days from partial details to vote) and D) worst of all decided that the highest and best use of tax revenue is not for teachers and education, police ,fire, open space or infrastructure…but to give to a very successful private business (227 on Fortune 500), Liberty Media that announced recently to its shareholders that it has 1.5 billion in cash reserves and is worth over 11 billion http://ir.libertymedia.com/releasedetail.cfm?ReleaseID=743807

  18. The AJC has an article behind their paywall that alleges that investors with inside information bought up properties adjacent to the site of the new ballpark. Sad thing is, I doubt it’s even illegal is Georgia to do this. It must be nice to be so well connected.

  19. The opposition in Cobb seems to be better organized than the opponents of the Falcons’ new stadium. http://www.300millionreasons.com

  20. I don’t want any type of stadium in Cobb County. Traffic is bad enough at the I-75/I-285/Atlanta GA 41 (Cobb Parkway) Interchange/Exit without adding stadium traffic. Only people coming from the north of Smyrna (i.e., Kennesaw towards Tennessee) would be exiting at Windy Hill to access Circle 75. Everyone coming from the south of Smyrna would be exiting at the I-75/I-285/Atlanta GA 41 Exit, turning right on Cobb Parkway (GA 41) and right at the next light (Circle 75). Well, I now turn left at Circle 75 (Spring Rd.) to go home, and I do not want to drive in that stadium traffic.

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