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Ga. Supreme Court ruling casts pall over Cobb County funding of Braves stadium

Atlanta Braves, SunTrust Park The Georgia Supreme Court has cleared the way for Cobb County to help fund construction of the Atlanta Braves' SunTrust Park. Credit: ballparksofbaseball.com

By David Pendered

In a ruling Monday that validated the sale of bonds for the Braves stadium, the Georgia Supreme Court said the deal “may push the law as far as it can go.” The order also raised the question of political ramifications of the transaction.

The 43-page ruling written by Justice David Nahmias concludes:

Atlanta Braves, SunTrust Park

The Georgia Supreme Court has cleared the way for Cobb County to help fund construction of the Atlanta Braves’ SunTrust Park. Credit: ballparksofbaseball.com

  • “While aspects of the deal structure at issue may push the law about as far as it can go, it does not cross the line into illegality
  • “In so holding, we do not discount the concerns appellants have raised about the wisdom of the stadium project and the commitments Cobb County has made to entice the Braves to move there. But those concerns lie predominantly in the realm of public policy entrusted to the county’s elected officials for decision, not in the realm of constitutional or statutory law. And to the extent the concerns affect whether the bond proposal is sound, feasible, and reasonable, we defer to the trial court’s findings on those factors, which were supported by evidence in the record. …
  • “If the stadium deal does not fulfill the high expectations that have been set for it, there may be a significant political price to pay for those who negotiated and signed onto it. But under the law of Georgia as construed in the precedents of this court, we cannot say that the trial court erred in validating the bonds or that the validation process was deficient. Accordingly, we affirm the trial court’s judgment.”

Cobb County Commission Chairman Tim Lee released a statement Tuesday that focused on the fact that the ruling clears the way for Cobb to issue up to $397 million in revenue bonds to help pay for the stadium’s construction.

Lee wrote in an email:

Tim Lee

Cobb County Chairman Tim Lee

  • “The Georgia Supreme Court voted to uphold a local ruling that authorized nearly $400 million in bonds to build SunTrust Park – the future home of the Atlanta Braves.
  • “As you know, SunTrust Park is expected to generate more than $100 million in annual economic activity and will ensure Cobb County as the “Home of the Braves” for 30 years.  Construction is well underway and has already generated thousands of construction jobs and more than $250 million in contracts to businesses in Cobb County.
  • “The high court’s unanimous decision is another step in the right direction for Cobb County and paves the way for progress as we prepare for Opening Day in 2017. …
  • “As always, thank you for your continued support of our community.  It is because of people like you that Cobb County remains the best place to live, work, and play ball!”

The court’s ruling recognized the county’s ambitions for the stadium, which were specified in an operating agreement between Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority.

According to the ruling, terms call for the authority to sell the bonds. The county is to pay the authority amounts necessary to cover the difference between licensing fees paid by the Braves and annual debt payments. The county agrees to pay up to $25 million a year for 30 years, with proceeds derived from the county’s hotel/motel tax, car rental tax, and general funds.

The ruling states:

Georgia Supreme Court Justice David Nahmias

Georgia Supreme Court Justice David Nahmias

  • “The Operating Agreement states that the county and the authority ‘believe that the development and construction of the stadium will provide a significant and much needed catalyst for revitalization and continuing redevelopment of the property in the vicinity of the Stadium.’
  • Further, in approving the bond resolution, the authority determined that “the financing, acquisition, construction, and equipping of the project will be in furtherance of the authority’s public purpose,’ and the county determined that the project will provide its citizens ‘continuing recreational benefit and other benefits’ and ‘will promote tourism, promote the economy, and bring other benefits to the county and the state.’”

The lawsuit was filed by three Cobb County residents who contended the bond validation approved by a Cobb Superior Court judge was incorrect. The appellants are Larry Savage, Richard Pellegrino, and T. Tucker Hobgood.

In its most recent rating action on the coliseum authority, in 2013, Moody’s Investors Service provided an investment grade rating of Aaa, with a stable outlook. Moody’s cited Cobb’s, “sizeable and diverse economic and employment base, a sound financial position supported by conservative fiscal management and satisfactory fund balance levels, and a low debt burden.”


David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow.


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1 Comment

  1. Real World July 7, 2015 3:07 pm

    As lead plaintiff in this action I can assure you this was not simply an angry rant. There was and remains a very serious Constitutional question regarding the ability of the County and the Authority, individually or together, to incur this debt. The County’s position traces back to a GA Supreme Court decision from 1952. I contended and still believe that the 1952 decision was erroneous and deeply flawed. The Supreme Court offered some defense of the 1952 decision but also argued for the value of respecting long-standing legal precedent, even if flawed. Had the Court simply affirmed the lower Court without comment, the door would be open to unrestricted bond financing with no referendum and no limits for any local government in this state. All they would need would be a cooperative Authority with ability to issue revenue bonds. I understand there are about 400 such Authorities state-wide. Hopefully the added comments in this opinion will chill the mood for future adventurous revenue bond deals.
    Larry Savage
    East CobbReport


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