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Hotel-motel revenue at heart of latest stadium backlash


Ink on the Atlanta Falcons’ stadium deal with the city and state has long dried. Two churches have sold in its wake. And the Martin Luther King Jr. Drive bridge is already a memory as roadwork is in full swing.

But that hasn’t deterred a small and diverse group of metro Atlantans from launching a quixotic quest to halt the stadium project that’s well underway.

Atlantans for a Fair Deal, composed of tax watchdog groups such as Common Cause Georgia, The Atlanta Tea Party Patriots, and religious and civic leaders from the stadium communities of Vine City and English Avenue, are calling on the Atlanta City Council to revise the agreement it approved with the state and Falcons last March.

The unlikely after-the-11th-hour pitch is largely focused on just how much of the city’s hotel-motel tax revenue will be used to build, maintain and operate the retractable roof stadium, a figure based on estimates of how well Atlanta’s hotel industry will perform over the next three decades.

Under the deal, 39.3 percent of annual collections from a 7-cents-per-dollar tax will go to the new stadium — the same percentage that currently goes to the Georgia Dome. A 2010 state law authorizing extension of the tax, collected from guests at Atlanta hotels, required that the percentage stay the same for a new stadium as for the Dome.

The city plans to generate about $246 million from the sale of bonds backed by the hotel-motel tax revenue to cover $200 million toward construction, as well as the costs of issuing the bonds, setting up a debt service reserve fund and putting aside money for interest payments during construction.

All told, those bonds will cost about $451 million to pay back with interest (roughly $16.7 million per year from 2017 through 2043), according to the city’s latest projections.

Any money remaining from the stadium’s 39.3 percent share annually will go toward maintaining, operating and even improving the venue.

And that, Atlantans for a Fair Deal say, easily could be hundreds of millions over the life of the project.

“We are in bad economic times. People are struggling to put food on the table and clothe their children,” said Atlanta Tea Party head Debbie Dooley, who recently joined the stadium fight. She said the city is giving public tax dollars to “a billionaire who can afford to build it himself.”

Kim Shreckengost, executive vice president of Falcons parent company AMB Group, said estimates of how much hotel-motel tax money will be available for other stadium purposes after debt service are “guesswork.”

The Falcons are taking on the risk, she said, because they will be responsible for funding stadium costs that exceed available hotel-motel tax revenue.

“It is safe to say that the portion of stadium operations, maintenance and capital expenses that must be funded by (the Falcons) are expected to always be substantially higher than any excess hotel-motel tax revenue,” Shreckengost said. “Any amount of excess hotel-motel tax proceeds from year to year is not guaranteed.”

In fiscal 2013, which ended June 30, the Dome’s share of the tax proceeds was a record $20.45 million — versus $18.8 million the year prior. That would come to about $613 million if repeated every year for three decades in the new stadium.

But the tax proceeds are expected to rise over time as hotel rates and, presumably, the number of hotel rooms rise.

Atlantans for a Fair Deal cite one projection that the tax revenue could yield $882 million for the stadium over 30 years, assuming continued growth. That would direct more than $400 million to the stadium beyond the costs of covering the bonds. Of course, costs of operating and maintaining the stadium also will rise with inflation.

The group says the city should have negotiated a cap on just how much hotel-motel tax revenue will go to the project and redirect remaining funds to other city uses, such as building schools or addressing the city’s infrastructure needs.

That would have required a change in the state law specifying the 39.3 percent figure, something Common Cause’s William Perry believes the city should have pushed for.

The percentage was established in 1989, when the Georgia Legislature approved the Georgia Dome funding plan. The same 39.3 percent was simply kept in place when, in 2010, the Legislature authorized the city to extend the tax for three decades to fund a replacement stadium.

Like many council members, Councilman Ivory Young isn’t receptive to rehashing the deal.

Young, whose district represents the stadium communities, said the council is far more concerned with actually implementing the project. Specifically, the council is concerned about roadwork underway on MLK Drive, which has inflamed tensions there as proposals call for the road to become more of a zigzag than a boulevard.

“We’re not talking about renegotiation for the deal,” Young said. “The state Legislature defined how we use that money. The city doesn’t define that. Arthur Blank doesn’t define that.”

The Falcons’ position is that they have binding contracts with the city and state based on City Council approval a year ago.

“Any efforts to have the tax resolution rescinded would not undo the contracts already in place,” Shreckengost said.

Councilwoman Felicia Moore, who voted against the agreement last year, said it is hard to see how a majority of members will change their minds now, much less the legal ramifications of such a move. The Atlanta City Council passed the deal by an 11 to 4 vote last March.

“Some of the points they bring out are certainly worth exploring. … But I don’t know if there’s going to be enough motivation from the majority of council,” she said.

Moore said she expects challenges to the project to continue.

“We said we’d have a deliberate process and a public input process once we got the deal,” she said. “We didn’t do that and so I think we’re still going to deal with these challenges.”




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