Georgia Aquarium’s financial support from Atlanta in 2009 led to soaring revenues
By David Pendered
After Atlanta provided the Georgia Aquarium with $80 million in financing at favorable terms in 2009 to build a dolphin exhibit, the aquarium’s revenues soared by 23 percent, compared to the year before the exhibit opened. The return on the city’s latest financial support for the aquarium – up to $7.5 million – remains to be determined.
The Georgia Aquarium used proceeds of the $80 million bond sale to build and equip a dolphin exhibit that was to add about 1 million gallons of water, according to terms of the bond.
The money for the Georgia Aquarium’s expansion was provided in the form of a revenue bond. The bond was issued in 2009 on behalf of the aquarium by the Atlanta Development Authority, the city’s development arm. The financing method provided favorable interest rates to the aquarium, according to terms of the bond.
Atlanta taxpayers are not responsible for repayment. The bonds are secured by the anticipated revenues from the Georgia Aquarium, and these revenues are used to pay off the bonds. Terms call for the bonds to be paid off by Oct. 1, 2033, according to a report by emma.msrb.org.
The dolphin exhibit was an overnight sensation when it opened in 2011.
Gross receipts from tickets and souvenirs went through the roof the year the exhibit opened, and have continued to increase, according to the aquarium’s tax returns as filed on guidestar.com:
- In 2010, before the exhibit opened, gross receipts were reported at $49.9 million.
- In 2011, the year the exhibit opened, gross receipts shot to $61.6 million.
- In 2016, the latest year with records on file, gross receipts were reported at $85.7 million.
Visitors seemingly couldn’t resist seeing an exhibit that scored glowing reports, such as this one from seattletimes.com:
- “It’s a Broadway-style show, complete with an ancient sailor named StarSpinner and a battle with a sea creature that can only be settled by dolphins leaping, twisting and spinning the audience out of captivity….
- “The 25-minute show includes professional actors in elaborate costumes, colorful animation on a giant screen at the back of the performance tank and original music by composer Tim Williams recorded by a 61-piece orchestra at Sony Pictures Studios in Los Angeles.”
The Georgia Aquarium’s $80 million financing package wasn’t mentioned in the public documents regarding its latest request, for up to $7.5 million.
Instead of citing revenue, the package touted increases in sales taxes that are to be spurred by a planned predator exhibit:
- “Currently, the Georgia Aquarium generates $5.5 million in sales tax. The expansion will generate an additional $1.3 million.”
This figure is relevant because of the source of funding for the upcoming bond package. The money is to be allocated from the Westside Tax Allocation District, which is to use proceeds to provide for public amenities that will spur further investment in the district.
The additional $1.3 million in expected sales tax revenues suggests the debt will be repaid within a few years. The money will then become available for another project.
The grant from the Westside TAD represents 7 percent of the total cost of the project, $108 million. According to the report from Invest Atlnata, other funding sources include a mix of public incentives and private financing:
- Bank debt, $40 million, 37 percent;
- Equity, $28.3 million, 26 percent;
- Other equity, $29.3 million, 27 percent.
- Westside TAD grant, up to $7.5 million, 7 percent;
- State tax credit equity, $3 million, 3 percent.
This report doesn’t seem to grasp that sales tax goes to the state, MARTA, schools, water-sewer etc. None of it goes back into the Westside TAD – no “debt will be repaid.”
The TAD is supposed to spur property tax growth, but a grant to the Aquarium fails to do that because the Aquarium is tax-free.
And you did not report that IA already gave the Aquarium a scarce tax credit in 2010 worth $25mm, that the powers that be forgot to mention when pushing the IA board into submission last week.
This grant was yet another Bucks for Boosters scheme. You guys love to talk a game on affordable housing, homeless support and police staffing, but when there’s a chance to spend money for those or for the latest Booster demand, you always seem to go with the Boosters. Wake-up call!Report
It would be great if the some of public funds invested for the expansion could also support options for providing low income families or seniors on fixed income affordable access to the Aquarium.Report
Thank you, Mr. Pendered, for raising the bar on bringing clarity and transparency to the public’s contribution to financial structures of the city’s “deals,” this time the Aquarium.
And thank you Mr. Bene, for raising the bar yet higher with your insider information, which is hard for reporters to even think about getting, as David has done, and even harder to gain access through case-hardened public agencies’ cultural and procedural firewalls.
Finally, thank you Mr. Hakim for pointing out, as Mr. Bene has also done, that these are our resources, and we should never commit them without a clear and enforced agreement to mitigate our greatest shame: our wealth gap and the inability for our kids born into poverty having any chance to get out.
Thinking of this project and, even bigger, the Gulch, concomitant linkages of our money should provide low wealth communities benefits from a menu of poverty-fighting measures, like jobs, livable wages, health benefits, training, housing support, child care, transportation assists, connecting to public schoos, to name a few. i
If the city is really serious about transparency, then this project is a good place to start, by acknowledging its earlier misrepresentations and then setting the record straight on the Aquarium’ s public funding history. . . , ,Report
What a shameful misuse of public moneys when there are so many higher uses, among them about $1 billion of decayed infrastructure that must be replaced.Report
The fun “25min., Broadway-style show” mentioned in the quoted reviews was scrapped & sorely missed. ????Report