Fulton County court to rule on whether Falcons owe $700m in property tax on grounds their “public” stadium really isn’t

Ever since a New Jersey court ruled that the New York Red Bulls had to pay property taxes on their new stadium even though it was city-owned, because it was a private use, a small subset of people — okay, probably just me and Geoffrey Propheter — have been wondering when some other jurisdiction, or its residents, would try a similar gambit. And some Atlanta residents are doing just that with the Falcons‘ publicly-owned-and-subsidized, privately controlled stadium:

For a year and a half, some residents have argued that the stadium — which has been exempted from property taxes since it was built — should be paying into city, school and county tax funds. A lawsuit the group filed in 2017 estimates its tax bill at $26 million a year under June 2018 tax rates…

Over the life of a 30-year agreement the Falcons have to use the stadium, it might generate more than $700 million in property taxes, according to estimates by attorney Wayne Kendall, who is representing the residents who filed the suit.

This suit has been kicking around since 2017, and already got bounced by Fulton County Superior Court, but was revived by a state appeals court last month and kicked back to county court for reconsideration. The key argument for the Falcons having to pay property taxes is that, unlike in its previous deal at the Georgia Dome where it just rented the place 20 days a year, the new stadium is fully controlled by the team: “The Falcons manage the stadium year-round, and receive the revenue from all events held in the building, not only ticket revenue. Kendall argues that under the new agreement, the Falcons are a long-term leaseholder, and long-term leases are taxable under state law.”

College of the Holy Cross economist Victor Matheson tells the Atlanta Journal Constitution that this would be “a real game changer nationwide” if the Atlanta suit prevails, and while Matheson is almost always right, the Harrison case hasn’t been a game changer yet, so it’s possible this wouldn’t be either. Though for Atlanta residents looking to get back some of the $700 million they’re spending on Megatron’s Butthole, it would be a huge deal indeed.

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7 comments on “Fulton County court to rule on whether Falcons owe $700m in property tax on grounds their “public” stadium really isn’t

  1. Interesting development, but it does appear to be heavily predicated on state law as regards property taxation in Georgia… which doesn’t necessarily mean other jurisdictions would see long term leaseholders in the same way (too bad Cincinnati, Glendale, Columbus et al).

    It’s really interesting to me that long term leaseholders appear to be held liable for property taxes… a burden that almost always goes to the property owner (which we assume would be the state/county in this case).

    To illustrate why this it is the building owner that carries this burden… supposing the court rules the Falcons do have to pay property tax on their leased building… and the Falcons refuse to do so (or simply ignore the repeated demands for payment). Under ‘normal’ rules, the district authority for collection would begin proceedings to seize the delinquent property for a tax recovery auction… which um, yeah.

    In all districts I am familiar with, the district authority may not seize an “alternate” property owned by the same entity or person for arrears, so the notion that they might try and seize either the Falcons, their equipment or the nearest Home Depot (and I’m sure Mr. Blank had the forethought to create multiple independent businesses to hold his Georgia based corporate assets, possibly even in non-Georgia districts…) to obtain payment is likely a non-starter.

    I guess they could lock the Falcons out of the building… but that seems like an ultimately self defeating method of coercion doesn’t it?

    1. They could seize the lease for non-payment, no? Which comes down to the same thing as locking the Falcons out of the building, but either way it would give the public entities leverage to demand a fairer lease.

      Or alternatively, to offer the building to another prospective NFL owner, then sue the league on antitrust grounds for not allowing them to move in. Which would probably be fruitless, but still extremely amusing.

        1. Rovelling should be an…. um adverbial???.

          Now cue the other 1.5 million lawyers in this country to file class action suits pursuant to all 150-175 other plays in this game, each of which will have some claim to have ‘decided’ the outcome.

          Bonus point if no action is filed over the Brees interception in OT….

  2. This is Atlanta we’re talking about. They could just stall legal proceedings on this for another 15 years or so, declare MBS obsolete, and build a new stadium at taxpayer expense with the support of a fresh set of bribed public officials.

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