Copyright 2014 The Atlanta Journal-Constitution
The Atlanta Journal-Constitution
Cobb County commissioners will be asked Tuesday to authorize borrowing of close to $400 million for the new Atlanta Braves stadium --- an amount that is higher than the public has been previously told.
The county has emphasized for months that it would borrow $368 million and dedicate that money toward stadium construction.
But the amount actually borrowed could be as much as $397 million, because the county will build into the loan about 15 months of interest payments, all of the borrowing costs and funds to fight potential legal challenges to the bond issue.
Commissioners will also be asked to approve a maximum annual payment amount of up to $25 million, or $1 million more than the public has been guaranteed as the county's maximum annual payment toward the stadium. The bond resolution was released to the public Friday night after 6 p.m., without even a full business day before commissioners will be asked to approve it.
County Chairman Tim Lee says the amounts listed in the bond resolution are a worse-case scenario, and part of the normal legal steps that the county must go through to issue debt. He said the county's maximum commitment to the stadium project remains $300 million under the bond resolution.
"We're not going to exceed $24 million annual costs," Lee said.
Lee added that he anticipates the borrowing costs to be lower than $24 million a year when they issue bonds, probably in the fall. One scenario released by Cobb to the AJC Saturday showed $397 million borrowed with annual payments of roughly $22 million a year with current interest rates.
The AJC reported last month that the county would have to borrow more than the $368 million committed to stadium construction. That report was based on the county rolling all of its borrowing costs along with 12 months of initial interest into the loan, increasing the amount of debt by $18 million --- to $386 million.
During a press conference two weeks ago, Lee called the report inaccurate.
Commissioners Tuesday will also be asked to approve several other agreements related to the Braves stadium, including major contracts that define the county's role during stadium construction and operations. The final drafts of those documents were not made available to the public until late Friday.
Lee was criticized last fall for the timing of the commission's vote on a preliminary agreement with the Braves, made public just two weeks before the vote that committed tax dollars to fund the stadium. Afterward, he vowed transparency as the project moved forward.
The late Friday release of the bond documents and final drafts of contracts related to the stadium, renewed criticism that he was not living up to that pledge. Some community activists said releasing the bond information after hours on a holiday weekend, just days before a critical vote Tuesday, was similar to how the county handled the initial Braves agreement approved two days before Thanksgiving.
"To me it's just another example and the pattern of trying to go around the people," said Rich Pellegrino, a leader with Citizens For Governmental Transparency, which has been critical of the county's handling of the Braves deal.
"It fits in with the same pattern. Chairman Lee has not learned his lesson at all in terms of working with people and giving a fair amount of time to review documents," Pellegrino said.
Common Cause Georgia board member Terry Taylor, who lives in Cobb, agrees the timing of the bond documents' release prevents the public from fully examining the details of a complex financial deal before Tuesday's vote.
"Making a document available late Friday before a holiday weekend with a vote to be taken on the first business day following the release is not acceptable," Taylor said. "Late Friday releases of information is typically what's done when an organization hopes the public is not paying attention. It should have surfaced earlier, and it should certainly be given time for an airing."
Even some commissioners, who will have to cast votes Tuesday, weren't aware the documents had been made public when contacted by the AJC on Friday night.
"With us moving into the holiday, it seems quite reminiscent of when we approved the" preliminary agreement, said Commissioner Lisa Cupid, who cast the only vote against the stadium proposal last fall.
Even Commissioner Bob Ott, who expects to vote for the bond resolution, said he would have preferred to "have it out sooner." He doesn't think the final issuance will reach $397 million.
"I don't think that's where it's going to be," he said.
Lee said the way the 143-page bond document released met his pledge for transparency. When asked how releasing the document after hours on a holiday weekend was transparent, Lee responded: "How is it not?"
Lee said Friday's release provides ample time for the commissioners and the public to review the document before Tuesday's vote.
Cobb officials, in a conference call interview Saturday morning, tried to beat back any suggestion that the resolution represented a departure from what had previously been planned or disclosed.
"It's a maximum not to exceed amount," Pehrson said, adding that the county would re-evaluate their options if the average annual bond payment exceeds $24 million, as they budgeted last fall. "I don't think that would happen," he said.
The AJC will continue to follow the Atlanta Braves' new stadium in Cobb County and what's next for Turner Field. Follow along at MyAJC.com/bravesmove to see coverage about the deal, questions and issues about the costs, maps, renderings and plans for Cobb County and Turner Field, and images of ballparks designed by the company picked to build the new stadium.
NEW BRAVES STADIUM CONSTRUCTION BUDGET: $622 million
* $392 million: Public contribution
* $397 million: Bond issuance *
* $14 million:
Transportation sales tax
* $10 million: Businesses in the Cumberland Community Improvement District
* $230 million: Braves contribution, which can be increased to $280 million at the team's discretion.
County's annual payment:
County annual revenue sources for bond payments:
* Renewal of county-wide property tax levy: $8.6 million
* Braves rent: $6.1 million
* New property tax from Cumberland-area businesses: $5.1 million
* New nightly hotel room fee: $2.7 million
* Existing hotel-motel tax: $940,000
* New rental car tax in unincorporated Cobb: $400,000
*This is the maximum amount the county would borrow. The bond issuance is larger than the public contribution because the county is also borrowing money to pay the first 15 months of interest on the debt, and all of the borrowing costs. The interest rate at the time of the issuance will determine the exact amount borrowed.
**This is the maximum annual payment the county could make. The exact amount will depend on interest rates at the time of the bond issuance.
If you go
What: Cobb County commission meeting
When: 7 p.m. Tuesday
Where: 100 Cherokee St., Marietta
On the agenda: Agreements with the Atlanta Braves, the Cumberland Community Improvement District, the Cobb-Marietta Exhibition Hall Authority and a pledge to borrow up to $397 million for a new ballpark in the Cumberland Mall area. Commissioners also will approve hiring a construction manager to oversee the project.
How to speak: The sign-in sheet is available about 10 minutes before the start of the meeting. Twelve people will be permitted to speak for 5 minutes each at the beginning of the meeting.
How we got the story
Reporters for The Atlanta Journal-Constitution have been digging into all aspects of the Atlanta Braves stadium proposal in Cobb County since the deal was announced last fall. We were the first to report on additional public safety costs and additional financing costs that will impact taxpayers over the life of the deal. Late Friday, the county released bond documents, which the commission will be asked to ratify Tuesday, that allow borrowing of up to $397 million, and up to $25 million in annual repayment. The AJC conducted exclusive interviews with county commissioners for insight into the borrowing plan.