Atlanta mayoral candidates debate Hawks arena deal that they won’t get to decide anyway

Atlanta Mayor Kasim Reed is term-limited out of office after next year, which means the city is gearing up for the election of a new mayor in 2017. And, as befits a city that just spent almost $700 million on a Falcons stadium and saw the Braves leave for the suburbs in exchange for $355 million in stadium subsidies and is facing a demand for $142.5 million in arena renovations for the Hawks, sports subsidies are becoming an issue in the campaign:

Candidates Cathy Woolard and Vincent Fort have come out swinging against the proposal, calling it a giveaway to a billionaire. Councilwoman Keisha Lance Bottoms, a key negotiator in the deal, is a hearty backer, while competitors including Atlanta City Council President Ceasar Mitchell, Councilwoman Mary Norwood and businessman Peter Aman, have been more sanguine…

Bottoms, who threw her hat in the ring to run for mayor just days before news of the Hawks deal broke, is also head of the Atlanta-Fulton Recreational Authority that owns Philips and will recuse herself from voting. But she said the project would be a boon to Atlanta’s hospitality community.

“It’s not just about sports,” she said. “It’s an arena that has a lot going on. It’s about being a good steward of a city-owned asset.”

By contrast, Fort said recently, “This is another instance where billionaires are making out like nobody’s business and the citizens of the city are getting very little in return.”

Yep, those would be the two stock arguments. Not that any of the candidates — except Bottoms, Mitchell, and Norwood, since they’re on the city council — will actually have any say in this matter, since the council is expected to vote on it way before the mayoral election, but the public debate could help influence how that vote goes. Especially with candidates saying stuff like this:

Woolard said there was little risk of losing the Hawks after Cobb County Commission Chairman Tim Lee was ousted by voters following his deal with the Atlanta Braves.

“I’ll call that bet,” she said. “I’m not sure the NBA would let Atlanta not have a pro team. And what other jurisdiction in metro Atlanta is going to do this deal after Tim Lee lost [re-election] after the Braves deal?”

That’s a good point! Also not likely to carry much weight, especially when we just saw the Texas Rangers get $500 million in subsidies for a new stadium to replace their 22-year-old one in part by dropping hints that they’d move from Arlington to Dallas even though Dallas hadn’t made any moves to offer them a stadium. But it’s nice to see mayoral candidates using logic as an argument, just for a change of pace.

Atlanta mayor proposes giving Hawks $142.5m for arena renovations, because they asked nicely

Nine months after saying he wanted to offer up to $150 million to the owners of the Atlanta Hawks for arena renovations to get them to sign a lease extension, Atlanta Mayor Kasim Reed has offered $142.5 million to the owners of the Atlanta Hawks for arena renovations:

The city will put $142.5 million into the renovation, with the Hawks contributing $50 million.

About $110 million will come from extension of car-rental tax and the city will contribute $12.5 million from the sale of Turner Field, which is expected to close by year end. The remaining $20 million from the city will come from a series of expected future land sales, Reed said…

Hawks officials have previously said they are looking to, among a number of upgrades, replace the bank of suites that dominate one side of the arena, install a variety of different-size suites, improve the connectivity so fans can navigate around the arena on one level and create better floor seating by changing the layout which originally had oval ends to accommodate hockey.

So how bad would this deal — which still requires approval by the Atlanta city council and the Atlanta-Fulton County Recreation Authority — be for city residents? Let’s come at it from a variety of different angles:

  • Having the public put up 74% of the renovation costs for a privately run sports facility sounds pretty bad, unless the Hawks are agreeing to share more arena revenues with the city in exchange. The deal is just being described as a “lease extension,” though, so presumably they’re not.
  • On the bright side, $142.5 milllion is a lot less than the almost $700 million in public funds that the Falcons are getting for their new stadium. On the less bright side, they’re getting a whole new stadium out of the deal, whereas this is just rejiggering the suites and concourses.
  • Philips Arena only cost $213.5 million to build in the first place, so this is almost paying for its construction cost all over again.
  • The Hawks’ lease already runs through 2028; this would extend it through 2046. That makes this a public tithe of a little less than $8 million per each added year, which is cheaper than the $14.6 million per year that Charlotte is paying the Carolina Panthers for their lease extension, so, um, good negotiating?
  • Now Hawks fans don’t have to worry about the team moving out of town in 2029! Which will be a real worry following the economic upheaval in the first year of the Farkas Administration.

In short, then, the owners of the Hawks complained that their 17-year-old arena was designed wrong and needed a $200 million upgrade 12 years before their lease was to run out, and the mayor of Atlanta said, “Sure, we’ll pay for three-quarters of that, if you extend your lease some.” It’s not the worst deal in the world — it’s not even the worst deal that Reed himself has brokered — but it’s not an especially good one either, especially if anyone in Atlanta was hoping to use that future tax money for something that would benefit more than one group of local rich guys. Atlanta city council, ball’s in your court.

Cobb County chair who masterminded Braves deal gets booted in landslide

Voters in Cobb County, Georgia went to the polls last night for a runoff election between Cobb County Commission chair Tim Lee and his challenger Mike Boyce, and it wasn’t close: Boyce trounced Lee, 64-36%. And the main issue in the campaign was Lee’s engineering of $350-million-plus in public subsidies for a stadium to lure the Atlanta Braves to the suburbs, a deal concocted in secret, pushed through in just two weeks with little public debate, and approved before finalizing a transportation plan, leading to possible traffic and transit nightmares; Boyce remarked following the vote, “

Lee’s name is now added to the list of elected officials who were bounced from office for giving public money to pro sports teams against the wishes of their constituents, joining Wisconsin state senator George Petak (recalled by voters in 1996 for casting the deciding vote for public money for a new Milwaukee Brewers stadium) and Miami-Dade County Mayor Carlos Alvarez (recalled by voters in 2011 after advocating public money for a new Miami Marlins stadium). That’s a short list, but it’s still longer than the list of local officials who were booted because they didn’t approve sports subsidies — Seattle Mayor Greg Nickels is the only arguable member of that club, and he was more reviled by voters for not putting down salt on roads before a snowstorm and leaving the entire city paralyzed, then giving himself a “B” grade for his snow removal efforts.

So once we’re all finished dancing on Lee’s grave, what happens now with the train wreck that is the Braves stadium? Probably not a whole lot: According to the Atlanta Journal-Constitution, Boyce indicated that “

As for Lee himself, he’ll probably have job options despite “couldn’t even find 15,000 people to vote for him” on his resume. The record in past ousters is mixed: Petak immediately landed a job with Wisconsin Gov. Tommy Thompson, the man who’d talked him into switching his Brewers stadium vote; Alvarez won an over-60 bodybuilding contest and then was arrested for assaulting his ex-girlfriend in a fight over his cat. If I’m Lee, I’d try to go the former route — Georgia does have a Republican governor who has backed the Braves project, so that’s always an option. Or, hey, the Braves could use a shortstop, and Lee probably wouldn’t hit much worse than the incumbent.

If nothing else, at least, we can rest assured that after two pricey stadium deals for the Braves and Falcons, Atlanta area residents have learned their lesson about signing on to large public subsidies to replace buildings that are barely 20 years old. Why, I bet no one could even propose something like that now without getting laughed out of

Compared to many other NBA teams, Phillips Arena is an old barn. I haven’t been to any of them, but I don’t have to. All that’s necessary is to crank up a recent edition of NBA 2K to see how far behind Phillips Arena is from like The Barclays Center in Brooklyn, or even The Amway Center in Orlando. … The Hawks provide their fans with a great product. How badly would some other cities like to have eight consecutive playoff seasons and counting in a row? … The only reason for the poor attendance has to be the almost-twenty year arena they have to perform in.

Sigh. Okay, settle in, we may yet be here a while.

Hawks seek sales tax breaks for arena development, total subsidy now umpteen gajillion dollars

The Atlanta Hawks owners want to build a big L.A. Live-style entertainment district around their soon-to-be-renovated arena, because of course they do. And along with the maybe $150 million they’re looking for in arena renovation subsidies, they want the entertainment district to get tax breaks, too, because duh.

If I’m reading the legislation right, the sales tax break would be on construction materials, which is a common enough giveaway to big development projects that’s not worth a ton — the sales tax rate in Atlanta is 8%, so even if half the project cost is for materials, that’s still only a kickback of 4% off the total cost — but does raise the question of why legislators are convinced that nobody will build anything ever without getting sales tax knocked off their bill. The rental car tax, which was originally passed to fund infrastructure around the arena, is likely worth more to the Hawks owners, but it’s targeted for “infrastructure” again, though we don’t know what that means yet, or it could go to pay for arena improvements, too.

So basically we have no idea what any of this will look like or who will pay how much for what, but the state legislature is voting on tax breaks for it regardless. Good ol’ Georgia.

Atlanta mayor “comfortable” giving $150m he doesn’t have yet to Hawks owner for arena remodel

Atlanta Mayor Kasim Reed still really wants to throw money at the Hawks for an upgrade to their 17-year-old arena:

“We have not settled on the number, but what we have looked at is our own capacity of what we can comfortably finance,” he said in an hour-long meeting with AJC reporters and the newspaper’s editorial board. “We think that number is between 100 million and 150 million (dollars).

“The total project would be anywhere from 200 million to 300 million (dollars),” he said.

Reed said the sources of funding haven’t been determined, but rental car taxes are likely to be part and he did not rule out funding from the Westside Tax Allocation District.

So… wait, what? The city can comfortably finance $100-150 million, but doesn’t know where the money would come from? I thought that $150 million figure was supposed to be from money available after the city sells Turner Field? Now it’s just a big ol’ number that Reed is offering Hawks owner Tony Ressler because that’s just what Atlanta does, even though the team can’t move anywhere without paying massive penalties? Come on, Atlanta Journal-Constitution, I’m counting on you to raise your eyebrows at least a little more at this.

 

Hawks owners to seek public cash for arena and practice space, because Christmas is about giving

Atlanta Hawks CEO Steve Koonin dropped a few hints last week about what he and his fellow team execs are seeking in a renovated arena and new practice facility, though most of it comes down to “we’re working on it”:

  • Arena renovations would take place in phases so that the Hawks could keep playing there throughout the process. No word on how much it would cost, but Koonin made clear he’s expecting public money, saying, “We want the city to do its fair share, and we plan to do ours.” (Atlanta Mayor Kasim Reed previously floated $150 million as the city’s share, but that was a while ago now, before the new owners even bought the team.)
  • There’s no one site being targeted for the practice facility, but it’s planned to open for the 2017-18 season, which is soon. And Koonin said team execs are “talking to public officials about collaboration,” so expect more taxpayer cash there as well.

It’s all pretty nebulous for now, but will likely get more concrete in the coming weeks and months. And it makes even clearer that asking for separate practice facilities is becoming a thing for team owners seeking new ways to ask cities to buy them crap: We just saw this with the Washington Wizards, and Koonin said not having a separate practice space puts teams at “a competitive disadvantage” — which on the face of it sounds pretty silly (really, free agents won’t sign with your team if they have to practice where they play games?), but certainly sounds better as a reason to ask for public cash than “all the other kids are getting them this Christmas.” Though why being at a competitive disadvantage should be Atlanta taxpayers’ problem and not the Hawks’ owners is another question that isn’t asked often enough.

New radio series explores WTF is up with all those new Atlanta stadiums

WABE radio in Atlanta kicked off a week-long series yesterday on the metro area’s multiple new stadium and arena deals for the Falcons, Braves, and possibly Hawks, and I had the honor of being one of the first guests, pointing out that while there are certainly cities that got worse deals (hello, Indianapolis!), that’s not really something to brag about. You can listen to the whole interview here.

More interesting to me (since I know what I was going to say already) is Thursday’s upcoming appearance by Cobb County Commission chair Tim Lee, who will try to explain why it made sense to throw $300 million at the Braves to get them to move to a new stadium in the suburbs, plus maybe what’s up with that pedestrian bridge that won’t be ready in time to get fans from their cars to games, plus maybe the soaring ticket prices planned for the new place, plus even maybe why he secretly hired a lawyer with county funds to negotiate the Braves deal without even telling his fellow commission members, then lied about having done so. Come to think of it, I would have rather skipped my appearance yesterday and instead gotten to interview Lee. Now that would be some must-see radio.

Atlanta mayor offers Hawks public money to replace 16-year-old arena, but only if it’s “reasonable”

Atlanta Mayor Kasim Reed says he’s met with the new owners of the Hawks about their stated desire for a new or renovated arena, and any hopes you may have had that he was going to tell them, “Fine, you want to replace your 16-year-old arena, do it on your own dime,” you can forget about that:

Reed said he’s met once with the team’s new owners and repeated his willingness to consider a deal involving the use public funds. The mayor first indicated that option last year in the wake of controversy involving the team’s previous leadership.

“What I’m willing to do is come to the table with a plan that makes sense and is fair to the people of Atlanta,” Reed said. “I’m not closed to participating in a reasonable plan to make sure that the Hawks remain in the city and that’s what I expressed in our meeting.”

Mayor Reed has a bit of a weird history with sports subsidies, being a prime mover behind giving hundreds of millions of public dollars to the Falcons for their new stadium, then declaring offering the Braves money to keep their from moving to Cobb County to be too rich for his blood, then offering $150 million for the Hawks to extend their lease when they weren’t even threatening to break it. There’s also the little matter that the Hawks couldn’t leave without paying off about $100 million in remaining bonds on the Philips Arena (and couldn’t leave before 2018 without paying an additional $75 million in penalties), but that’s apparently not going to stop Reed from leading with his wallet.

Possible sites for a new arena would be the Atlanta Civic Center (the current filming site for Family Feud, according to Wikipedia), a rehab of the existing Philips Arena (which the Hawks own), or a third, undisclosed site. Total cost: Who knows?

Prediction: This is not going to end well.

 

New Atlanta Hawks owner introduces self, immediately complains that 16-year-old arena sucks

The Atlanta Hawks have a new owner, because the old one got caught complaining too many black fans were going to games and had to go. What do you have to say to your new team’s fans, leveraged buyout king Tony Ressler?

Ressler allowed that there were three things the new owners could do about Philips Arena, which opened in 1999: Nothing, remodel or rebuild. And the first, Ressler said, “isn’t an option.”

(Ressler also described Philips as being “not in the upper quartile of arenas.”)

Now, I know we’re in an age where sports venues are declared defunct after only a couple of decades — especially in Atlanta, for some reason — but declaring that your arena is obsolete because it’s 16 years old and there are seven nicer ones elsewhere is pretty ballsy.

And upping the ballsy quotient: For his reported $850 million purchase price, Ressler (and his co-owner, former NBA star Grant Hill) go not just the Hawks, but Philips Arena itself. So he’s not actually in a position to threaten anything if he doesn’t get a new arena, unless he’s prepared to attach his old one to balloons and fly it to Seattle. (Which, come to think of it, would defeat the point.) [CORRECTION: Ressler only bought operating rights to the arena, which is owned by the state stadium authority. So, sadly, no balloons.]

The hope is that Ressler won’t be looking for any public subsidies (ha ha ha!), and if he decides a new arena really is needed, will just spend his own money on building a new one. This time one that won’t start to look obsolete to its owner as soon as the shrink wrap is off, okay?

Hawks for sale, winning bidder must buy arena too, NBA says they’re not moving anyway, so there

Bill Simmons’ invisible friend may or may not be right that some rich guys are interested in buying the Atlanta Hawks and moving them to Seattle (okay, he’s right about Chris Hansen, because Chris Hansen would buy his own grandmother and move her to Seattle if he could clone her four times and get her to suit up for NBA games), but the Hawks are indeed for sale, as announced yesterday by the team’s owners. And not only that, but the lucky winner will be buying not just the team, but operating rights to Philips Arena, which was built way back in 1999 when the team was still owned by Ted Turner. (The county paid most of the construction cost, though most of that the team is paying back in rent; though the county owns the building, so Turner got a tax break … I’m not going to start calculating subsidy totals for a 16-year-old arena deal, sorry, not on a Friday.)

Anyway, the interesting bit here is: Does including the arena in the deal make it less likely that a new owner could try to move the Hawks? (The NBA actually released a pretty strong statement on Wednesday that the team isn’t going anywhere, but it’s a sports league’s prerogative to change its mind.) After all, if Hansen, let’s say, were to buy the team and move it to Seattle, he’d have to pay a premium to get the arena as well, then would have to figure out what to do with it with no sports team to play in it. (I guess it would still have the Dream, which is separately owned by two women who share the same hair.) They could try to fill dates with concerts, I suppose, but even a guarantee of 41 sparse Hawks crowds a year might be better than starting from scratch with empty dates and hoping that Ariana Grande has a sister.

Without seeing how the internal finances of the Hawks/Philips Arena management structure look, there’s no way to tell, and don’t hold your breath waiting to see that. Unless … I bet they’d have to open their books to qualified bidders, right? So if we said we wanted to buy the Hawks… Quick, who has a few hundred million dollars free on their AmEx?