AthleticBusiness.com has partnered with LexisNexis to bring you this content.

Copyright 2014 The Atlanta Journal-Constitution

An effort to block the partial public financing of the new Atlanta Falcons stadium resumes in Fulton County Superior Court today, when a judge could decide whether to green-light the city's plans to help finance the stadium.

A group of residents from Vine City and English Avenue filed a legal challenge in February against issuing bonds worth more than $200 million for the billion-dollar project, with hundreds of millions more in hotel-motel tax revenue funding operations and maintenance over 30 years.

The Rev. William Cottrell, Mamie Lee Moore, Tracy Bates, Joe Beasley and John H. Lewis III allege a long list of legal flaws in the stadium financing plan and ask for the proposed bond issue to be rejected and declared unconstitutional.

They say they don't want to stop the stadium, but question the financing plan. Chief among their concerns, the group believes the 2010 state law authorizing extension of the existing Atlanta hotel-motel tax for the purpose of replacing the Georgia Dome is unconstitutional because it morphed a "general law" with statewide applicability into a "special law" applying only to one situation.

"This lawsuit isn't about anything other than the city of Atlanta and Georgia to have the proper information and process (before funding the deal)," Bates said at a press conference Wednesday near the Georgia Dome.

The challenge to the bonds isn't stopping the Falcons from moving forward with construction of the stadium set to open in 2017, though it could tie up the city's contribution for months at the very least.

Falcons owner Arthur Blank, speaking to the Rotary Club of Marietta Wednesday, said the cost of the stadium has risen to nearly $1.3 billion --- up from original estimates of $948 million for a retractable roof stadium and the team's more recent figure of $1.2 billion.

The Falcons have set a May groundbreaking ceremony, though work has already begun. Roadwork has long been underway and crews are dismantling Mount Vernon Baptist Church, one of two historic black churches that sold to make way for the stadium.

Blank said the challenge to the bond issue involves Atlanta and Georgia World Congress Center Authority officials, but not the team.

"We are observers to it, and we feel like it's a process that has to play out and will play out," Blank said.

Pressed whether the team was preparing for a worst-case scenario should the judge rule in favor of the challengers, the billionaire owner replied: "We don't have a worst-case scenario."

Today's hearing is the second in the bond validation proceedings. Fulton County Superior Court Judge Ural Glanville could hear arguments, toss out the challenge or make a ruling.

The use of bonds backed by hotel-motel taxes is critical to the stadium deal. An agreement reached last year by the Falcons, the city, the development authority Invest Atlanta and the GWCCA calls for $200 million in bond proceeds to go toward construction.

The city expects the total bond issue to be about $246 million, according to latest estimates, including costs of issuing the bonds, interest payments during construction and a debt service reserve fund. All told, the bonds would cost an estimated $451 million to repay with interest over 30 years.

Hundreds of millions of dollars in additional hotel-motel tax funds could go toward the costs of maintaining and operating the stadium during the same time period.

The effort to block the financing is led by John Woodham, an Atlanta attorney who has built his career on bond validation challenges, and retired Fulton County Superior Court Judge Thelma Wyatt Moore.

The stadium deal calls for bonds to be issued by July 31. However Glanville rules, the losing side is likely to appeal, which means the Falcons won't see city tax dollars for many months longer.

Staff writer Tim Tucker contributed to this report.

 

April 10, 2014

 

 
Copyright © 2014 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
Terms and Conditions Privacy Policy