The proposed deal for a new Atlanta Falcons stadium will cost hundreds of millions of dollars more in public money than the $200 million slated for construction, an analysis by The Atlanta Journal-Constitution shows.
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$1 billion: Estimated cost of new Falcons stadium
$200 million: Public’s up front contribution to construction cost, generated from bonds backed by Atlanta hotel-motel tax
$448 million: Preliminary estimate of total principal and interest payments on the bonds over 30 years
$90 million: Under law that earmarks 39.3 percent of hotel-motel tax receipts for stadium, this is the approximate additional tax money over 30 years that would go to stadium expenses other than debt service, if tax collections remain at current level
$450 million: Additional hotel-motel tax money for stadium expenses if tax collections increase by 2.65 percent annually
FUNDING STADIUM EXPENSES
The latest draft of the proposed Falcons stadium deal spells out the ways in which hotel-motel tax money not needed for debt payments could be spent, if available, on other stadium needs:
—- Up to $3 million per year (increasing 2 percent annually) into a “refurbishment and maintenance reserve account,” which would be used for “preventative or routine maintenance and … replacements of equipment parts.”
—- Up to $1 million per year (increasing 2 percent annually) into a “renewal and extension account” for capital improvements.
—- Up to $3.5 million per year (increasing 2 percent annually) into an “other events staging expense account” to reimburse the Falcons, who would run the stadium, for expenses related to staging Georgia Dome legacy events such as the SEC Championship game and Chick-fil-A Bowl.
—- Up to $8 million per year to the “operating and maintenance expense account” for any other items in the stadium’s annual expense budget.
—- And any additional funds into the “surplus account,” to be used for any “lawful purpose” related to the stadium.
(Note: Funds would be deposited into these accounts only to the extent they are available from the stadium’s 39.3-percent portion of the Atlanta hotel-motel tax after debt payments.)
Source: March 3 draft of memorandum of understanding
The Atlanta Journal-Constitution is closely examining the new Falcons stadium proposal at every step. For this story, staff writer Tim Tucker reviewed financial documents to determine how much public money will really go into the project. Currently the deal calls for $200 million of the estimated $1 billion construction cost to be raised through public bonds backed by hotel-motel tax revenue. Tucker found that related financing and interest costs would significantly boost the total – much like interest costs on a mortgage. He also found that, regardless of the bonding amount, 39.3 percent of hotel-motel tax collections in Atlanta over 30 years by law must go to stadium costs. Some of that would pay off the construction bonds, but the rest – potentially hundreds of millions, if tax receipts grow – could be used for operations and maintenance.