By Maria Saporta
Atlanta officials and the Atlanta Falcons reached a deal to build a new $1 billion stadium that addresses most of the concerns raised by the Atlanta City Council and the surrounding communities.
The tentative agreement was announced at a press conference Thursday afternoon at Atlanta City Hall with Atlanta Mayor Kasim Reed flanked by Atlanta Falcons owner Arthur M. Blank, Gov. Nathan Deal and 10 members of the Atlanta City Council.
The agreement would include $50 million investments in infrastructure improvements around the new stadium as part of the actual costs of constructing the project.
In a separate development, the Arthur M. Blank Family Foundation and Invest Atlanta have each committed to provide $15 million, for a total of $30 million, towards the redevelopment of the English Avenue, Vine City and Castleberry Hill neighborhoods.
The agreement follows several weeks of negotiations between city officials and the Falcons. It was built on a framework negotiated by the Georgia World Congress Center Authority and the Atlanta Falcons for a new stadium on GWCCA’s campus.
The city took a central role in the negotiations after the governor and the state decided not to try to get the General Assembly to increase the GWCCA’s bonding capacity to $300 million after controversy arose over the public funding piece for the stadium.
The new agreement must still be approved by the City Council, GWCCA and Invest Atlanta.
“We love Atlanta,” Blank said, adding that Atlanta has been his home since 1978 when he co-founded Home Depot. “We are excited for the opportunity to participate.”
The agreement includes several major elements that surfaced in public meetings hosted by the city council with local residents, neighborhood groups and business owners concerned about job creation, minority and woman-owned business participation in the construction, infrastructure improvements and economic development in the neighborhoods surrounding the proposed stadium.
City Council President Ceasar Mitchell did caution that the Council “still has to vote on this.” But he added: “I’m very encouraged that the input that has been given to the mayor and the Falcons has been heard.”
The mayor also wasn’t taking the City Council vote for granted despite 10 members standing by the podium. “I just don’t prejudge votes,” he said.
The financial agreement would include $50 million in infrastructure costs related to stadium construction — such as traffic mitigation and pedestrian improvements.
The Blank Family Foundation would commit to investing $15 million in private funds in the English Avenue, Vine City, Castleberry Hill and other neighborhoods contiguous to the new stadium to address overall needs as part of a cohesive plan; accelerate quality-of-life improvements; improve health, education and welfare of current residents; address equity and social justice issues associated with new residential and commercial development; and attract new investment, new jobs and new residents.
Invest Atlanta, the city’s economic development agency, would also commit $15 million in tax allocation district dollars for economic development projects that would leverage private sector and philanthropic investment in the English Avenue, Vine City and Castleberry Hill communities, pending approval by its board.
Gov. Deal, who was the last person to speak at the City Hall press conference, called the new stadium agreement “truly a public-private partnership” with the state contributing the land.
Blank and the mayor officially disclosed at the press conference that the preferred site for the stadium the one directly south of the Georgia Dome. But that would require the state acquiring Friendship Baptist Church.
Reed has been meeting with officials from Friendship to try to reach an agreement. “It’s very important to me that Friendship be treated in a manner that’s in keep of its 150-year-old tradition,” Reed said. “That’s the caveat” of the south site. An alternative site is about a half-mile north on Northside Drive.
To promote full and equal business opportunities in connection with the design and construction of the new stadium, the Atlanta Falcons and the GWCCA have agreed to develop an Equal Business Opportunity Plan that will ensure at least 31 percent participation by women and minority business enterprises. The construction of the stadium is expected to create more than 1,400 full-time equivalent jobs in Atlanta and more than 4,500 full-time equivalent jobs across Georgia over a three-year period, according to a study completed by Georgia State University Associate Professor Dr. Bruce Seaman.
The public contribution for stadium construction is capped at $200 million, which would come from the hotel-motel tax collected by the city — almost exclusively (more than 85 percent) from visitors and tourists, not residents of the city. Invest Atlanta would be asked to issue the bonds using the hotel-motel tax that currently supports the Georgia Dome. The existing hotel-motel tax revenue stream is the sole public funding source for the stadium construction and any risk associated with repayment is carried by the bond holders, not the city.
No property taxes or new taxes of any kind would be paid by or levied on city residents or businesses to fund construction of the new stadium. The city will not serve as a backstop for any debt associated with the construction of a new stadium and this agreement will not affect the city’s bond capacity or credit capacity.
“I am pleased that we reached an agreement that will ensure the Atlanta Falcons remain in the heart of our city for many years to come and will lead to revitalization of some of the city’s most historic neighborhoods,” Reed said. “Equally important, a new stadium will lead to the creation of well-paying jobs during its construction at a time when many of our friends and neighbors are seeking employment. This new stadium will also keep the city of Atlanta at the forefront of the hospitality industry in America as we pursue our goal of attracting 40 million visitors annually. It will strengthen the viability of the more than 200,000 jobs that support our tourism and convention business every single day.”
Atlanta attracts more than 39.7 million visitors annually, according to the latest data from the Atlanta Convention and Visitors Bureau. In 2011, tourism generated $12 billion in visitor spending. The hospitality industry is responsible for more than 229,000 jobs for Atlanta residents. In addition, 12 million visitors traveled to metropolitan Atlanta for business purposes in 2011 and spent an estimated $5 billion.
“We appreciate the mayor and his staff’s diligence in moving the agreements for a new stadium toward completion,” Blank said. “We are grateful to the members of the Atlanta City Council who have given us the opportunity to address their questions or concerns, and we will continue to work with the Mayor, City Council, Invest Atlanta and our partners at the Georgia World Congress Center in reaching final agreements.”
The city council would vote on the extension of the hotel-motel tax to 2050 and other key agreements among the city, GWCCA and the Atlanta Falcons. The memorandum of understanding for the development, construction and operation of the new stadium would require GWCCA Board approval. Invest Atlanta would need to approve resolutions to issue the bonds necessary to move forward with stadium construction.
Reed became directly engaged in the negotiations in January. The city council also played a role in the process.
With the support of the Reed administration, council members engaged their constituents and in several public meetings, some of which lasted for more than five hours and included detailed presentations from Rich McKay, president and CEO of the Falcons; Frank Poe, executive director of the GWCCA; Duriya Farooqui, chief operating officer of the city; and Brian McGowan, president and CEO of Invest Atlanta
As the process continues, Invest Atlanta will lead community engagement with the English Avenue, Vine City and Castleberry Hill neighborhoods.
The new stadium is estimated to cost $1 billion. About $800 million for the cost of construction of the new stadium will come from investments contributed by the Falcons and other private sources. The $200 million public contribution from hotel-motel tax revenue has been specifically dedicated by the Georgia General Assembly for the Georgia Dome or a successor stadium on the Georgia World Congress Center campus and cannot be used for other purposes, such as for Atlanta Public Schools, infrastructure needs or transportation improvements.
As previously agreed, the GWCCA and Falcons would try to minimize negative effects on businesses, traffic and neighboring properties and businesses surrounding the new stadium site during construction, development and operation of the new stadium, and will further seek to identify reasonable opportunities to enhance the area surrounding the new stadium.
A new stadium would allow the city to remain nationally competitive for major events that are currently held at the Georgia Dome and have a significant annual economic impact on the city, including the SEC Championship ($29 million-$32 million); Chick-fil-A Bowl ($24 million-$35 million); Chick-fil-A Kickoff ($25 million-$36 million) and the Bank of America Classic ($21 million-$30 million). The total annual economic impact of these four events is between $100 million and $133 million, according to data reviewed by Seaman.
A new stadium also would enhance the city’s ability to attract new marquee events that would have a positive economic impact on the city and create and retain jobs in the city. Seaman estimates the potential citywide economic impact of a Super Bowl at between $125 million and $203 million; FIFA World Cup at $100 million-$200 million; a new BCS Championship at $110 million-$185 million; and a Major League Soccer franchise at $25 million-$36 million annually.
In the next two years, more than $1.5 billion in new development will open in Atlanta, including the Atlanta Streetcar, Porsche Cars North America Inc. headquarters, the National Center for Civil and Human Rights, the College Football Hall of Fame, Buckhead Atlanta and Ponce City Market.
For more information about the City of Atlanta, please visit http://www.atlantaga.gov or watch City Channel 26. Follow the City of Atlanta on Facebook and Twitter @City_of_Atlanta. Follow Mayor Reed on Facebook and Twitter @Kasim Reed