Falcons stadium to break ground in May as judge weighs legality of Atlanta’s $200 million fundingJack Falls at work on the Olympic Stadium (AJC photo by Joey Ivansco)
By David Pendered
The groundbreaking for the future Falcons stadium has been postponed more than a month as the legal battle continues over the $200 million in construction financing to be provided by Atlanta.
The original schedule envisioned the ceremony would place the last week of March. Now the target is an unspecified date in May, according to a report on bloomberg.com. It’s unclear if the delay is related to the court case.
Fulton County Superior Court Judge Ural Glanville said he expects to rule on the case no earlier than April 21.
Glanville conducted a hearing Thursday to consider motions and other matters that have arisen since he agreed in February to allow a group of Atlanta residents to intervene in the bond validation process. In this process, the state files a lawsuit that typically results in the bonds being approved for sale. The intervenors have challenged the legality of the hotel/motel tax that is to repay the bonds.
Glanville said at one point that he has to consider 22 motions that have been filed in the case.
John Woodham, an attorney for the intervenors, said he had two additional motions to file that day. The new motions included supplemental objections to the bond validation, and the resubmission of a previous document under a new headline.
The Falcons have not said publicly what impact the delay in getting the city’s funding will have on the construction project. The sum represents more than 16 percent of the overall cost that’s projected at $1.2 billion.
The clock is ticking on a termination clause in the contract.
Atlanta has until Sept. 30 to sell $200 million in bonds and deposit the money into a certain account, according to the contract signed by the football club, Georgia World Congress Center, and Invest Atlanta (the city’s development arm).
The city’s cannot use any source of funds to provide this amount other than the hotel/motel tax, according to the transaction agreement.
There’s no reason to suspect the Falcons intend to walk away from a project the team has worked on for nearly a decade. There’s also the issue of a major league soccer team possibly selecting Atlanta as the site of its 22nd franchise, which would play its games in the Falcons stadium. Team owner Arthur Blank has said a deal is pending.
However, the transaction agreement does provide an exit strategy for the Falcons and its partners:
- All three can agree at any time to terminate the project;
- The GWCCA can terminate by Sept. 30 if StadCo. (the team) has failed to fulfill its obligations;
- StadCo. can terminate by Sept. 30 if Invest Atlanta hasn’t deposited into an account the proceeds of at least $200 million in revenue bonds backed by the city’s hotel/motel tax;
- Either the GWCCA or StadCo. can terminate if the final closing hasn’t occurred by Dec. 31, 2014.
Another term states the Falcons can terminate the deal if the old Herndon Homes public housing community is not made available for use as surface parking. The Georgia World Congress Center Authority is to exercise “good faith efforts” to lease or license the land.