Back in 2015, when the Atlanta Braves owners were working on getting $300 million from Cobb County for a new stadium, they promised that they would build a surrounding development out in the suburban wastes without any additional tax breaks. Look, here’s team development president Mike Plant saying so at the time:
“We do not ask, nor do we intend to ask, for any incentives for the mixed-use part,” he said.
Jump forward to yesterday, when Plant appeared before the Cobb County Development Authority to ask for tax breaks on a $200 million office tower to be built in the mixed-use development known as The Battery. Awk-ward! Board member Karen Hallacy, according to the Atlanta Journal Constitution, specifically noted that back in the day the Braves promised they “would not come back and ask for additional abatements beyond what was already being provided to the ballpark. How does that fit into this coming in and the Braves basically asking for tax abatements on the property?”
Plant thought of an answer, and he thought it up quick:
“We’re not asking for them (the tax breaks),” Mike Plant, the president of the Braves development arm replied. “Truist is.”
Okay, so a little explanation on the Rube Goldbergian nature of this tax break request. The plan on the table is actually for Cobb County to sell $200 million in bonds, which the team’s development arm would then buy, saving on interest rates. The Braves owners would then use the cash to build out the office tower (estimated cost: $140 million) and furnish it ($60 million — no, I don’t know if they plan to buy all gold-plated sofas) and rent the whole thing to Truist, the bank that already owns the Braves stadium’s naming rights. Meanwhile, the office building — which would be owned by the Braves and sit on land owned by the Braves — would get out of paying property taxes for 10 years. So Truist wouldn’t actually be getting the tax breaks, the Braves would be, but the Braves would spend the money on buying crap for Truist so really it’s Truist’s tax break and stop confusing me with logic, okay?
Neither the Braves nor the Development Authority said how much the property tax rebate would be worth, and Cobb County doesn’t appear to publish its commercial property tax rates, but we can do a little guesstimating detective work here. If the Braves were building a $140 million house in Cobb County, a full tax rebate would be worth more than $1 million a year. So, that’s a maybe $10 million tax break? Though the Braves also own the land under the building, which is worth something, so maybe more than $10 million? Anyway, it’s a lot less than the $300 million they got for the stadium, but also a lot more than the $0 they promised to ask for back in 2015.
The Development Authority voted 5-2 to continue negotiations with the Braves over the tax break, with the two no votes coming from Hallacy and J.C. Bradbury, who knows a thing or two about the Braves stadium financing. Hopefully there will be more details released before the authority actually has to vote to finalize this damn thing, but it seems clear that the Braves are trying to move their stadium subsidy into “gift that keeps on giving” status.
Many jurisdictions have legislation that explicitly prohibits government agencies from selling, loaning or otherwise providing their preferred credit or borrowing facilities to third parties.
The reason for this must now seem entirely obvious… while some applicant might want to access the state or municipal government’s low cost financing for general public interest projects (low income housing or other public use infrastructure), it is really only a short legislative step to providing this same credit facility to someone who is just trying to obtain a competitive advantage over other commercial landlords by effectively eliminating the requirement to account for property taxes or market rate interest on mortgages.
Which is precisely what appears to be happening here.
Makes me wonder if the folks at Truist might not have had this sort of delayed benefit agreement in mind when they outbid other naming rights candidates for the stadium.
There is literally no reason to approve this request. And doing so would undermine market rate commercial landlords everywhere in the greater Atlanta region. It would also open the floodgates for every other bank (or commercial tenant of any kind) to seek to access the same sort of shady deal.
Just more welfare for the rich. In this case it’s an actual corporation rather than an individual sports franchise owner.
Cue “give us the $$ or we will move…”!