How the Falcons’ $200m stadium tax demand is actually worth $300m (or more)

When news broke last week that Atlanta Falcons owner Arthur Blank was considering accepting $100 million less in public money for a stadium in order to get quick approval of a deal, it seemed … “too good to be true” is probably pushing it, but a welcome surprise, anyway. In any case, it apparently was too good to be true: According to Atlanta business reporter Maria Saporta, Blank would still get $300 million worth of stadium subsidies, even as the city sold only $200 million worth of bonds.

Here’s how it works: In the Falcons’ original deal with the state George World Congress Center Authority, writes Saporta, any excess money collected from the hotel-motel tax revenue stream that would fund the public’s share of the stadium project “would go into a ‘waterfall’ fund that would go to pay for other debt on the project, or go into a refurbishment and maintenance reserve account, or go into a fund for capital improvements.” That remains the case in the new plan, which means that if enough tax money to pay off $300 million in expenses is collected as expected, Blank would get his $200 million in bonds plus a $100 million slush fund to spend on improvements to the stadium later on.

Saporta’s article isn’t clear on everything — for one thing, on what would happen if the hotel tax revenue fell short, under either the old plan or the new plan. (I just gave the Falcons term sheet a quick read, and didn’t find anything in there, though it does say the state wouldn’t guarantee the bonds if tax revenues weren’t sufficient.)

But the main point holds regardless: The Falcons deal isn’t actually a $200 million subsidy, or a $300 million subsidy. It’s a deal to take 39.3% of hotel-motel tax proceeds and hand it over to the Falcons for the next 30 years. How much that’s worth — $200 million or $300 million or, if suddenly everybody decides to spend all their vacation time at Atlanta hotels to avoid rising sea levels or something, far more than that — is entirely unknown, but whatever it comes to, Blank will get to spend it on his new toy, either now or later.

Last week’s announcement, then, appears to be a massive bait and switch, geared to avoiding a state legislative vote on raising the GWCCA’s bonding limit, without actually costing Blank a penny in subsidies. And if it hasn’t stopped all opposition to the stadium project — Common Cause Georgia is still vowing to fight any use of hotel taxes tooth and nail — it’s certainly muted it. I don’t know what Blank is paying his lawyers who drew up that term sheet, but they’re clearly worth every penny.