The real numbers behind a new Falcons stadium | News
ATLANTA -- With so much noise developing about the potential for a new Falcons stadium, and who it would benefit, we decided to cut through to what's really at stake: the big business and big numbers behind the big deal.
Negotiations have been going on for nearly two years between the Falcons and the Georgia World Congress Center Authority, which owns the Georgia Dome and would own a new stadium as well.
The following breakdown is to serve as both an update and a clarification for those who have seen many different numbers flying around.
According to the most recent estimates, the stadium will cost slightly more than $1billion.
At the end of August, the Georgia World Congress Center Authority released the latest analysis from the Barrett Sports Group. The analysis put the overall cost at $1.032 billion; it estimated the public contribution to be roughly $331 million. Most of the public money would be from the hotel/motel tax.
The hotel/motel tax is not a tax on residents... but does affect them.
This tax places an 8% surcharge on all those who stay in hotels in both Atlanta and unincorporated Fulton County. In theory, these would be visitors to the area, not residents. This is why stadium proponents argue that residents' taxes will not be raised to make the deal happen. Instead, they say, they will only be taxing out-of-towners.
However, while the money doesn't necessarily come from residents, it can still be spent however the legislature and various parties choose -- meaning the state doesn't need to sign off on spending roughly $300 million on a stadium. Opponents argue the money would be better spent on more pressing needs for the region.
So when people talk about "taxpayer money" in this case, it's a somewhat ambiguous term. Residents don't pay the taxes, but they do receive the benefits of them -- depending on how that money gets spent.
That $300 million figure? It's actually higher than that.
Those on all sides of the deal agree that the public will likely need to pay roughly $300 million from the hotel/motel tax. However, that's not the whole story.
The Georgia World Congress Center Authority will have to borrow, likely taking out bonds, in order to cover the $300 million up front. This means the Authority will have to pay interest, as well. Think of it like a home mortgage; you wind up paying far more than the principal cost.
This means the public cost will wind up being substantially higher than $300 million. No one can give exact terms yet.
Compared to other stadium deals, this is actually a good one for taxpayers.
Since 1995, 20 NFL teams have built new stadiums; on average, the public paid for 48% of the costs. In fact, take out the two most recent and most expensive stadiums -- Cowboys Stadium in Dallas and the Jets' and Giants' MetLife Stadium -- and the public contribution rises to an average of 62%.
By those numbers, the potential Falcons' deal looks far more favorable. The public, under the Barrett Sports Group's analysis, would pay for 32% -- less than a third of the cost.
The Falcons stand to gain a whole lot of revenue.
So why would the Falcons spend at least $700 million? Because, as any sports economist will tell you, they stand to make a whole lot more back.
Right now the Falcons are basically a tenant; the GWCCA runs operations at the Georgia Dome. The latest term sheet says the Falcons "will have the rights to all revenues generated" from a new stadium "and will pay all related costs."
This will enable the Falcons to control revenue streams that don't have to be shared with the NFL or the GWCCA -- streams like adveritising, personal seat licenses, concessions, and luxury boxes.
On the whole, the debate has gotten much more public in the past few weeks, and it will intensify further when the state legislature votes on whether to approve the public spending by the GWCCA. That will have to take place in either the 2013 or 2014 sessions in order for the Falcons to open the new stadium by their target of 2017.