Copyright 2014 The Atlanta Journal-Constitution
The Atlanta Journal-Constitution
State officials are prepared to spend more than $30 million to buy land and build parking for the new Atlanta Falcons stadium, despite balking last year at state involvement in issuing construction bonds for the $1.2 billion-plus project.
Gov. Nathan Deal is expected to approve a budget this month that includes a $17 million parking deck, a project only made public days before the legislative session ended. Records obtained by The Atlanta Journal-Constitution show state officials also could spend $16.3 million on land needed for the site. And a tax break on construction materials for the stadium could cost tens of millions more.
The disclosures anger critics who have hammered at the "hidden costs" of the stadium and blasted the use of public funds to help a wealthy owner build a gleaming new facility. Public officials and Falcons executives defend them as a crucial piece of enhancing the state-owned Georgia World Congress Center campus, where the new stadium will be built. The deck will be used for other events, and the GWCC will share in parking revenue.
"The state's contributions help us achieve our goal of building a new stadium downtown on a site preferred by the partners involved in this project," said Kim Shreckengost, the chief-of-staff to Falcons owner Arthur Blank. She said it was a sign of a "strong public-private partnership."
Watchdog advocates say the new details show the state is trying to slide public spending for the stadium past the public. Wyc Orr, vice chair of Common Cause Georgia, said voters should reject the "backroom deal-cutting" and call on Deal to veto the parking deck spending. "Active citizens must reject such anti-democratic oligarchy," said Orr.
Snapping up land
Even before the debate over the Falcons' desire for a new stadium heated up, the legislature in 2010 passed a law authorizing the city of Atlanta to extend its hotel-motel tax to help fund a replacement for the Georgia Dome.
But by last year, when discussions turned to whether the state would issue bonds backed by the hotel-motel tax to pay a share of construction costs --- the Falcons would still pay the large majority --- legislators wanted no part of it.
Deal backed a plan for the city of Atlanta to shoulder responsibility for issuing the bonds. The city eventually agreed and plans to issue bonds this summer that will raise about $246 million for construction and other costs. All told, it will cost $451 million in public money to repay the bonds with interest over 30 years, according to recent city projections.
All of those funds, as well as potentially hundreds of millions more toward maintenance and operation of the stadium for three decades, will come from Atlanta's hotel-motel tax. But the agreements with the Falcons also required the GWCC Authority, a state agency, to buy land for the stadium. That proved easier said than done.
After lengthy negotiations, the GWCCA agreed to pick up a $6.2 million share of the purchase of Mount Vernon Baptist Church's property --- the Falcons picked up most of the tab --- and another $2.73 million for four small parcels from private landowners. The GWCCA said the land purchases are being made with money appropriated by the legislature for that purpose in 2012.
Court records show some of the most heated wrangling involves a final parcel that doesn't even stretch a half-acre and holds a billboard and game-day parking lot.
The state initially offered co-owner Larry Zaglin $1.26 million for the land, but Zaglin, outlining visions of a potential hotel development there, sought $12.5 million.
In condemnation hearings, a court-appointed special master awarded Zaglin and co-owner Laura Fetko $6.9 million --- a sum the state has appealed. The special master also awarded $467,000 to firms that have leases with Zaglin, making the total cost of the parcel almost $7.4 million.
More legal fighting could complicate the process. Zaglin's attorney, Charles Pursley, wants the court to rule that the state began condemnation proceedings based on an "incorrect" position that the law bars it from offering more than appraised value for property.
"There's no question that to build the stadium this property has to be taken," Pursley said. "Fair compensation is what we're trying to find."
A new parking deck
As state officials tried to lock up the needed land, the Congress Center quietly worked to build political support for a project to expand parking.
The agency initially came to Deal and other political leaders with a proposed $35 million expansion of the Red Deck to provide hundreds of new parking spaces for Falcons fans and other events, but records show they scaled back their plans after being rebuffed.
By early March, as lawmakers cobbled together Georgia's $20.8 billion annual spending plan, records show that GWCCA executive director Frank Poe made a new push. In a letter to state leaders, he argued that the deck is crucial for the new stadium and the "future development of a convention center hotel" on the site of the Georgia Dome, which will be demolished after the new stadium opens in 2017.
Top legislative leaders included $17 million in bonds for the expansion in the budget proposal. When it came to light in the final days of the session, though, watchdog groups and other opponents unloaded on the plan. Some of the harshest words came from Debbie Dooley, a prominent tea party organizer, who viewed it as a "shakedown."
"This is the government picking winners and losers, and true conservatives don't support this," she said.
Records obtained under state sunshine laws show that the proposal seemed to catch even a member of the Congress Center's board off guard. Greg O'Bradovich sent a note to Poe on March 19 saying he did not recall any discussions about a new bond package for parking expansion, and noted he was getting calls about the move from Republican operatives.
"I had not expected to see such an early development" of the parking deck expansion, O'Bradovich said in one note. He didn't return calls or emails seeking comment.
Deal said in an interview that he was only swayed to support the project after campus officials scaled back the cost and returned in March with a broader argument for the deck, saying it could also be used for conventions, the College Football Hall of Fame and the hotel that's envisioned for the site.
Under the deal, the Falcons will get revenue from the new parking at NFL games, while the GWCCA will get it from other events, including the new Major League Soccer franchise that's in the works.
"We're in the business of providing what's needed for our World Congress Center campus and this would all be a part," Deal said in a recent interview. "And they tell me that parking is not adequate now. I think the need is justified. We believe this first step is a critical step."
The biggest expenditure
The costliest state expenditure could prove to be a tax break aimed at helping massive new developments. The Congress Center sent a letter to state officials in July 2013 seeking to land a sales tax exemption on construction materials for projects of "regional significance." These deals are awarded on a case-by-case basis, normally with approval of the governor and the state economic development commissioner.
State officials didn't have an estimate on how much the tax break could save the team, though estimates range well into the tens of millions of dollars. In the letter, the GWCCA's Poe notes that Falcons officials threatened to leave downtown if public funding didn't come through. "If you combine the potential loss of economic stimulus for our capital city with any number of possible alternatives, including the loss of our state's only NFL property, the significance of the project is made clear," Poe wrote.
In a statement, Poe said the state's overall investment is well worth the benefits, which include thousands of new jobs during the three-year construction period and a chance to lure premier events like the Super Bowl and the World Cup.
The project's critics plan to ratchet up the pressure on Deal as he nears decisions on the tax break and the parking deck. Orr, of Common Cause, urged voters to show outrage over state funding for the project.
"If we do so often enough and loudly enough, including calling for gubernatorial line-item vetoes of such opprobriously obtained appropriations for the stadium, we can make the promise of democracy, instead of public cynicism, self-fulfilling," Orr said.
$17M Parking deck expansion
$6.2M State's share of the purchase of Mount Vernon Baptist Church's property (Falcons paid an additional $8.3 million for a total purchase price of $14.5 million)
$2.73M Four small pieces of property purchased by state from private landowners
$7.37M A special master's ruling on the amount to be paid for a final piece of property the state is in the process of acquiring by use of eminent domain, including $6.9 million to the property owners and $467,000 to leaseholders. (The state is appealing.)
$33.3M Potential total
(Note: Falcons paid for the $19.5 million cost of purchasing Friendship Baptist Church's property.)
Get an update on the challenges facing the new Falcons stadium, including residents' concerns with the diversion of MLK Drive.