The Atlanta Journal-Constitution has been doing generally excellent work covering the Atlanta Braves‘ new stadium in Cobb County, and today reporter Meris Lutz does something that is rarely attempted in press coverage of stadium deals: Trying to add up the actual costs and benefits of a new building after the fact, and seeing how it all worked out compared to what was promised by proponents.
First, the promises:
“Thanks to serious, conservative leadership, Cobb County will realize a 60 percent annual return on investment from the SunTrust Park partnership,” [former Cobb County Chairman Tim Lee] wrote. “In fact, it will be the first private public partnership of its kind to result in a return on investment to taxpayers in the very first year.”
Those are some promises! Now, how has reality lived up to that?
The public debt obligation on the stadium amounts to $16.4 million a year. Of that, $6.4 million is paid by Cobb residents out of the county’s general fund, while the remaining $10 million is funded through taxes and fees, including a countywide hotel/motel tax, a countywide rental car tax, a localized Cumberland hotel/motel tax, and localized Cumberland commercial property taxes.
Cobb pays another $1.2 million for stadium operation and maintenance and about $1 million for police overtime and traffic management at games and events.
None of these costs take into account the tens of millions spent on transportation infrastructure that critics say would not have been built but for the Braves. Nor does it account for the cost of the new parks, which were funded with another bond issue after money was diverted to pay for the stadium.
In total, Cobb County is paying a minimum of $8.6 million out of its general fund just for debt service, stadium operations and public safety.
So that’s $27 million a year, plus “tens of millions” for transportation and parks, in costs. How do things look on the revenue side?T
The Battery commercial project around the stadium has generated about $460,000 in property taxes for the county’s general fund and $1.3 million for schools. Those numbers are expected to rise as the development fills up — it is already at more than 50 percent capacity.
The county declined to give an estimate of sales tax income from the stadium and Battery, but a previous study projected $1.7 million annually. That money goes toward special funds for education and transportation, not the general fund.
So if property tax receipts double, Cobb County is looking at $5.2 million in new revenue, for a return on investment of at least negative-80%. That is something less than a 60% annual profit.
Cobb County is currently in a fiscal crisis — as Lutz notes, “Since the first pitch in April, fees for everything from senior centers to business licenses have gone up. Libraries are in danger of closing, and there’s talk of a new penny sales tax to fund the police.” None of that is solely the fault of the stadium, as she notes, but starting each year with an extra $20 million-plus hole in your budget does not help at all. If only someone could have pointed out beforehand that paying for half the costs of construction and getting none of the stadium revenues wasn’t the best idea!