State budget crisis threatens College Football Hall
By Maria Saporta and J. Scott Trubey
Friday, February 19, 2010 | Modified: Tuesday, February 23, 2010
The state’s budget crisis is threatening funding for the College Football Hall of Fame, which could jeopardize Georgia’s claim to build the prized attraction.
Gov. Sonny Perdue included $10 million in bond financing for the shrine to college football greats in his FY 2011 budget proposal.
But the newly minted speaker of the state House of Representatives has said the cash-strapped state legislature will have to make tough choices to get a balanced budget.
“We are going to be doing things that are going to be unpopular,” House Speaker David Ralston said in a Feb. 11 speech to the Atlanta Press Club. “The toys are going to be postponed or eliminated.”
After the speech, Atlanta Business Chronicle asked the Republican from Blue Ridge whether the $10 million bond package for the College Football Hall of Fame was a toy.
“That is a toy,” Ralston answered without hesitation.
In September, officials with Chick-fil-A Inc., the Chick-fil-A Bowl, the city and the state announced a signed letter of intent with the National Football Foundation to move the college football shrine from its current home in South Bend, Ind., to Atlanta.
The hall of fame announcement was a coup for the state, and was seen as a major shot in the arm for Atlanta’s ailing hospitality industry.
During the announcement, which included Georgia business and sports elite, the state pledged support to help bring the shrine to the cradle of Southeastern Conference and Atlantic Coast Conference football.
State support has been seen by many in Atlanta’s sports and tourism community as the linchpin needed to entice private-sector sponsorships to the hall, which is projected to attract 500,000 visitors per year.
Backing for the hall of fame bonds appears to be stronger in the state Senate.
“We have a precedent of supporting these kinds of things,” said state Sen. Jack Hill, R-Reidsville, who chairs the Senate Appropriations Committee, referring to the state’s previous bid to land the NASCAR Hall of Fame.
“It’s an overall enhancement for the state,” Hill said.
The immediate hit to the FY 2011 budget would be the debt service on the bonds, probably in the range of $872,000, not the full $10 million in pledged support.
The budget process is by no means complete. Lawmakers have still not approved the mid-year amendments to the FY 2010 spending plan.
Any difference in the budgets produced by the House and Senate would be reconciled in conference committee before the spending plan would hit Perdue’s desk later this year.
State tax revenues have dwindled over the past few years, and lawmakers have taken extraordinary steps to balance the budget. And with unemployment remaining in the 10 percent range and consumer spending down, the worst of Georgia’s budget woes may lie ahead.
The General Assembly is still wrestling with a $1.4 billion shortfall in this year’s $17.4 billion budget. Later in this session, lawmakers will take up an $18.2 billion fiscal 2011 budget that will feature less federal stimulus money and other one-time revenue than is available in fiscal 2010.
But the worst is looming a year from now, when all of the stimulus money is due to run out. Perdue warned legislative budget writers on Jan. 19 that the fiscal 2012 funding gap is expected to hit $2.6billion.
The letter of intent signed in September required Chick-fil-A Bowl officials to raise $50 million and build a 50,000-square-foot facility. There is also a sunset provision in July after which both sides could conceivably walk away if the deal is not finalized.
Officials from the Chick-fil-A Bowl, which will operate the hall of fame, and the hall’s owners, the National Football Foundation (NFF), had hoped to reach a definitive agreement by Dec. 31. But it is not clear if such an agreement was reached.
Chick-fil-A Bowl President and CEO Gary Stokan, who spearheaded the five-year effort to win the shrine, did not respond to repeated messages seeking comment.
Messages left for NFF President and CEO Steve Hatchell also were not immediately returned.
The NFF has the right to terminate the letter of intent without penalty after Dec. 31 if a definitive agreement has not been reached. Both sides may break off negotiations at any time before July 1 for a penalty of $1 million under certain conditions.
The NFF also can opt out if Chick-fil-A Bowl officials are unable to complete the project or if Atlanta officials abandon negotiations.
Of the $50 million in commitments, Stokan has previously identified pledges of $6 million from Chick-fil-A (including a five-year, $1 million sponsorship), and $5 million from the bowl.
The Atlanta Development Authority has pledged $1 million from the city’s economic development fund and $10 million in new market tax credits, plus non-financial assistance. That puts cash commitments at $12 million, with $10 million in tax credits firmly in hand.
According to sources in the Atlanta sports community, Stokan has maintained that the college hall has received additional pledges of support from other donors. But it is unclear who those corporate sponsors are and how much has been pledged.
It is also uncertain if those pledges are for cash.
Major corporate support from Atlanta business beyond Chick-fil-A might also be a challenging prospect.
Fundraising for the shrine comes at a time when three other major philanthropic groups are beating the bushes for corporate support.
The Atlanta Symphony Orchestra, the Center for Civil & Human Rights and the National Health Museum are each deep in capital campaigns that have struggled to meet funding goals amid a deep global recession.
Officials also had hoped to identify land near Centennial Olympic Park for the hall of fame by the end of the year. It is unclear if in fact that has happened.
The South Bend hall will close in December 2010 and officials expect to open the new college hall in September 2012. Enshrinement for the Hall of Fame class of 2011 is slated to take place in Atlanta.
Earlier this month, the Atlanta team announced the hiring of Steve Ethier as chief operating officer. Ethier, currently the executive director of the Minneapolis Convention Center, is expected to join the team Feb. 26.
— Staff writer Dave Williams contributed to this report.